Older people victims of a market failure

The threatened collapse of Southern Cross, Britain’s biggest care home company, is the latest episode in a crisis that leaves up to a million older people without support, or with care that is often of appallingly poor quality.

Southern Cross, which runs homes for 30,000 people, is on the verge of financial collapse as a result of property deals that went belly up as a result of the credit crunch. The company has until tomorrow to persuade its landlords to cut its rents or go under.

The private sector controls 70% of the £14 billion care homes “market” created in the early 1990s, with the remainder shared by local councils, the NHS and not-for-profit housing associations. In all sectors, there are numerous reports of low standards, including abuse of residents, with homes run by poorly-trained, low-paid staff. One investigation suggests that between 2005 and 2009, 667 died of dehydration and nearly 160 of malnutrition.

Inspections have virtually ceased as a result of spending cuts at the Quality Care Commission (QCC). But the latest figures show that the quality of care in one in seven privately run homes in England was rated “poor” or “adequate” compared to one in 11 homes run by non-profit organisations or local authorities.

“Fundamentally, it’s now got to a point of being dangerous [for residents] – and it’s going to get worse,” said one CQC inspector, who spoke to the Financial Times on condition of anonymity. “If I had a relative who needed to go to a care service, I’d be ­concerned.”

Government spending cuts have intensified a crisis in the sector that was well under way in 2009. The recession led to several companies going under, with a result that provision fell. Since then, councils – which pay the private sector to care for local residents - have reduced spending on adult social services.

This means that those who could be supported in their own homes are either going without or having to pay hugely increased charges. Age UK estimates that Out of 2 million older people in England with care-related needs, 800,000 receive no formal support from public or private sector agencies. With spending cuts under way the figure is likely to pass one million between 2012 and 2014, the charity say in a damning new report.

Real spending on older people’s care will be £250 million lower in 2014 than in 2004. Over the same period the number of people over 85 has risen by two-thirds (630,000 people). In 2005 half of councils provided support to people assessed as having “moderate” needs, but in 2011 the figure has fallen to 18%.

As a result the number of people receiving local authority funded care at home has been slashed from 489,000 in 2004 to 299,000 in 2009.

Southern Cross has been the subject of a campaign by the GMB trade union. Paul Kenny, general secretary, said: "These care homes are not factories that are failing from lack of demand but are an essential part of every community and now face ruin due to the combination of privatisation and private equity."

Well, this is not a new story. Kenny and his union colleagues had 13 years of New Labour government to try and end the capitalist market in care which puts profits before the needs of older people. Nothing of the kind happened, of course. Instead, New Labour built on the public-private partnership approach in care as well as the NHS.

Now the spending cuts are adding to a systemic market failure, with older people increasingly the victims of a callous disregard for their wellbeing by the state as well as the private sector. A social system that cannot look after its older people with dignity and real care is both callous and unsustainable and, moreover, beyond reform.

Paul Feldman

Communications editor

Reclaim democracy now!

Just because global elites are always harping on about “democracy”, claiming it as the ideal political system, doesn’t mean that we abstain from the question. The challenge is to fight for a more advanced democracy than society has achieved so far.

We shouldn’t accept the present democracy as the last word on the subject but see in its historical and social context. While the Russian Marxist and revolutionary Vladimir Lenin considered bourgeois democracy, a “great historical advance in comparison with medievalism”, he qualified this by adding:

But this democracy is always hemmed in by the narrow limits set by capitalist exploitation, and consequently always remains, in effect, a democracy for the minority, only for the propertied classes, only for the rich… in the ordinary, peaceful course of events, the majority of the population is debarred from participation in public and political life.

Before him, Fred Engels, who collaborated with Karl Marx to produce ground-breaking analysis, wrote his seminal work on the origins of private property, family and the state. In it, Engels explained that however democratic the modern representative state was, its function was to maintain the rule of one class over another.

And that remains the case today in the democracies like Britain, the United States and France. Since Engels and Lenin, however, the fusion of capital with politics, particularly in the last 30 years, has further emasculated representative democracy. The Real Democracy Now movement that has flowered in Spain immediately and correctly identified the merging of the political system with corporate and financial power as the source of the problem.

So what should we struggle for? What about replacing democracy for the rich with a democracy for the dispossessed, the poor and the disenfranchised? What about extending democracy in new ways, by freeing people from the rule of the corporations and the banks, not to say the reactionary media? What about bringing democracy to the workplace, the school and the university through co-ownership and self-management?

Achieving these objectives will without doubt require the dismantling of the present state which in innumerable ways maintains and sustains the status quo. The is because, as others have shown, the present limited democracy is the political form that capitalism has assumed for itself.

It is both democratic and undemocratic at the same time, allowing certain freedoms while denying access to real power itself. You cannot imagine an advance in the nature and content of democracy within the present state because the two stand in contradiction to each other.

Opportunities for resolving this apparent puzzle are emerging through the movement of society itself in countries like Tunisia, Egypt and now Spain. We have to go beyond demands for participation and transparency. Important as they are, they sidestep the question of the nature of the state itself.

Arguing for and building people’s assemblies is a way forward in Britain and internationally. They can build on the growing resistance to the ConDem government on a range of issues and practice democracy by seeking to represent the widest range of social and political interests. They will challenge sectarian behaviour and undemocratic practices and discourage closed committees and pre-planning fixed agendas.

Assemblies established on a permanent basis can discuss the nature of the present democracy and what could be better; the nature of power – who’s got it and how do ordinary people win it. They can encourage sovereign decisions and direct action. They are both a means to bring people together across sectoral lines as well as the potential means by which we can democratically transform society and replace the state with a network of assemblies. Let’s reclaim democracy!

Paul Feldman

Communications editor

No local democracy on nuclear issues

The government has given the go-ahead for Augean Plc to dump nuclear contaminated waste in an ordinary landfill site outside the village of Kings Cliffe near Peterborough, despite massive local opposition.

Community Secretary Eric Pickles overruled Northamptonshire County Council, which turned down the company's application, and ignored a local referendum where 96% of local people opposed this dangerous move. This is the same man who is piloting the Coalition's Localism Bill through Parliament, leading Kings Cliffe Wastewatchers to express “surprise and disappointment that the wishes of local people appear to have been ignored”.

Augean, which has no experience of handling nuclear waste, is now permitted to transport 250,000 cubic metres of the stuff each year, by road, from the UK's original nuclear research plant at Harwell in Oxfordshire. Local people fear now the precedent is set, waste from other sites, for example Bradwell nuclear power station in Essex, will follow. They point out that the landfill site is above an aquifer that serves cities like Peterborough and Milton Keynes, but Pickles insists the risk of “actual harm is low”.

The mis-named Environment Agency recently made a similar decision allowing waste from Sellafield to be dumped at a landfill at Lillyhall in Cumbria. Allerdale Borough Council, Cumbria County Council and Copeland Borough Council all objected, but were overruled. The county council claims the decision does not follow the Agency's own rules, and "may have significant implications for future waste policy issues".


Councillor Tony Knowles said: "My fear is that this decision opens up the market for this waste to be disposed of at wherever offers the best deal on costs, rather than factoring in the wider environmental and economic concerns.” He is dead right there.

The coalition government has clearly decided that the only way to keep their commitment to nuclear power on track is by completely ignoring any local objections and forcing the programme through. More evidence of this came when environment and energy secretary Chris Huhne made clear that the UK, unlike other countries, will not allow the post-Fukushima concerns to halt, or even slow down, the building of new nuclear power stations.

Having considered a report from Dr Mike Weightman of the Office for Nuclear Regulation, which said it was unlikely that the UK would suffer an earthquake like the one that hit Japan, Huhne claimed that he report provided the government with the “basis to continue to remove the barriers to nuclear new build in the UK”.

Of course, nobody thought there would be an earthquake, but Weightman did identify a range of other issues that should be reviewed. These included

international and national emergency response arrangements, public contingency planning, communications and the review of flooding studies, site and plant layouts, electricity and cooling supplies, multi-reactor site considerations, spent fuel strategies and dealing with prolonged accidents.

But none of this stopped Huhne from declaring: “We want to see new nuclear as part of a low carbon energy mix going forward, provided there is no public subsidy. The Chief Nuclear Inspector’s interim report reassures me that it can.”

So the government will bring forward Energy National Policy Statements for ratification. These provide a framework allowing the state to overrule local objections to major energy infrastructure projects and to shorten the planning enquiry process. They could be implemented not only for new nuclear stations, but also coal-fired, and shale gas exploitation (which by the way also got the go-ahead yesterday).

The government is driving through this profit-driven energy policy at whatever cost, including riding roughshod over local democracy. In practice, the Localism Bill means centralised decision-making on behalf of the energy corporations, as the people of Kings Cliffe have discovered.

Penny Cole

Environment editor

Obama's spending cuts target the poor

While President Obama is enjoying his European tour, which is essentially a PR trip to boost his chances of re-election next year, his administration is preparing to bear down hard on the most vulnerable in a bid to cut the country’s soaring national debt.

A group of Democrats and Republicans in the US administration are hard at work on a life-support deal for the capitalist economy that will slash $1 trillion from the Federal budget, which is a cut of about 30% on current spending levels.

They are hoping to agree on a tit-for-tat exchange that will allow an increase in the total debt limit of $14.3 trillion which has already been reached. This is equivalent to a whole year’s national output and is forecast to rise to $20 trillion.

America’s debt was recently downgraded by a credit agency for the first time since the attack on Pearl Harbour in 1941.

Failure to increase the debt limit before its expiration date of August 2 would force the United States to miss interest payments on its debt, risking devastating fallout for global financial markets and the US economy. The Treasury Department is tapping pension funds and other pots of money now that the country has reached its debt limit, but has warned that it will exhaust those measures before August.

Even with an unwarranted optimistic view of a growing economy, and divided over the use of tax increases, Democrats and Republicans agree that the United States needs to reduce budget deficits by $4 trillion over the coming decade to ensure its debt remains at “a manageable level”.

In their third round of talks, the group homed in on the Medicare and Medicaid government health plans for retirees and the poor, which represent nearly a quarter of all federal spending. These areas are expected to eat up a growing portion of the budget in coming decades as the population ages and medical costs continue to outstrip inflation.

But the coalition for capitalism has a big problem on its hands: the American people. About 80% of registered voters, including 70% of right-wing Tea Party supporters, strongly oppose cutting the programmes, according to surveys.

Medicaid is a federal-state partnership that mostly covers low-income children and parents and disabled people. It also covers two-thirds of nursing home residents. Only 13% of Americans say they would support major reductions in Medicaid spending and just 10% back major reductions in Medicare and social security.

"If you watch the debate about the deficit and entitlements, you would think that almost everyone has a problem with the Medicaid programme and wants to change it, or cut it – or both," Kaiser Family Foundation president and CEO Drew Altman said in a statement released with the poll. "The big surprise in this month’s tracking poll is that one group who does not want to cut Medicaid is the American people."

Meanwhile, the crisis continues to mount at state level as the recession cuts into revenues. Yesterday in San Jose, Wisconsin, councillors set a date of June 21 for a vote on formally declaring a fiscal state of emergency and slashing pensions for public employees.

Today in Madison, the Wisconsin Wave is mounting a rally against Governor Scott Walker who will sign into law one of the most restrictive voter ID laws in the country, disenfranchising students, senior citizens, rural residents, low-income earners and homeless people.

Throughout the world millions of ordinary people are clashing with governments intent on slashing spending and raising taxes to repay debts accumulated on the now failed expectations of future economic growth. But the only thing growing is the number of countries like Greece on the verge of bankruptcy and default.

The slash and burn policies of Obama and the Coalition in Britain are the road to social disaster. The global resistance to capitalist crisis measures point to the need for new kind of a much wider democracy, based on the social ownership of the world’s productive resources and, not forgetting, financial systems.

Gerry Gold

Economics editor

Power is not a dirty word

The occupation of Puerta del Sol in Madrid and actions in other Spanish cities organised by the Real Democracy Now/M-15 movement, openly challenges the country’s economic and status quo.

Where the movement heads next, its likely ambitions and aspirations, are hotly contested and debated in Madrid, Barcelona and outside Spanish embassies in other countries where solidarity camps have been established.

Some have designated the movement as the start of the Spanish Revolution and reject the mainstream political process, urging people “not to vote for them” in last Sunday’s elections. In London, one debate is between those who view it as primarily a Spanish question and others who favour a more global approach.

An open debate and struggle over ideas, orientation, strategy and tactics is fundamental. The M-15’s manifesto embraces this approach and the way the Puerta del Sol occupation is run encapsulates in microcosm how a future society could work more democratically than the present capitalist one.

For some, engaging in an alternative democratic, transparent process is a victory in itself and the movement should more or less leave it there. On his Beyond Clicktivism blog, Tim Hardy endorses philosopher John Holloway’s view that “the quest for power with the aim of transforming society sets us up for perpetual disappointment”.

Hardy claims the Spanish protests “don’t hope to seize power” and seek “instead to transform existing power relations” allowing “participants to directly experience the possibility of a better world through participating in assemblies and consensus decision-making.”

Well, yes and no dialectically speaking. The M-15’s manifesto says, for example, “the current status of our government and economic system… in many ways is an obstacle to human progress.” While the manifesto does not explicitly demand a new system, the implication is clear:

“The will and purpose of the current system is the accumulation of money, not regarding efficiency and the welfare of society. Wasting resources, destroying the planet, creating unemployment and unhappy consumers.”

In Holloway’s outlook, all power is alienating and is to be avoided; only consciousness developed in the struggle is positive. In his book Change the world without taking power (here’s an excellent critique of it by Phil Sharpe), Holloway focuses on human spontaneous activity because, he claims, it alone has the quality of overcoming alienation. Why it has not done so yet, despite countless mass struggles, is not explained.

As Sharpe notes: “In strategic terms Holloway can only postulate an endless repetition of struggle as being able to ultimately transcend alienation. This glosses over the tendency of spontaneous struggles to have alienating limitations and qualities that undermine the possibility of universal human emancipation. These embrace the tendency to gravitate towards reformist aims and restricted trade union type demands and the related acceptance of capitalism.”

The fact remains, whether we like it or not, that capitalism organises itself through state structures. The state is not some neutral body that can be won over to the side of ordinary people. Corporations and banks express their power over ordinary people through this state, which has physical force available to uphold its authority.

The state creates laws and practices that relate to property and share ownership, employment, working conditions, education, social rights, welfare and so on. It is in essence a capitalist state. Everything working people have gained is the result of a struggle AGAINST the state in each country.

What is new is that the political parties like the PSOE in Spain and Labour in Britain that once mediated between capital and labour through their access to the state’s political system, no longer pretend to do so. Corporate-driven globalisation has meant these parties’ effective integration into a market state.

In this context, making use of the existing state structures, including the political system, to shape human society in a progressive fashion is no longer a viable option. The present state has to go and power has to change hands, from the minority to the majority, in revolutionary practice. Corporate and financial power could be co-owned and controlled and exercised through a network of people’s assemblies.

Creating “real democracy now” demands nothing less.

Paul Feldman

Communications editor

Obama's warning to Israel falls on deaf ears

President Obama’s latest speeches on Palestine, like his visit to Ireland and to London, are arousing a whole range of emotions and reactions.

Anti-war protesters will gather tomorrow outside Buckingham Palace against the three wars currently being fought by the United States under Obama’s leadership – Iraq, Afghanistan and Libya.

As the Stop the War Campaign points out, Israel continues to enjoy unflinching support from its US Big Brother – large scale arms sales, aid and political support.

But simply to note this would be to miss out on new realities unleashed by the revolutions of the Arab Spring and its effects on the struggle of the Palestinians for self-determination.

Thousands took part in the May marches throughout the Occupied Territories to mark the Nabka, "catastrophe" in Arabic, that refers to the destruction of Palestinian villages and expulsion of their residents that accompanied Israel's declaration of independence.

Israeli border police troops fired on protesters in an attack which drew international condemnation. Despite 11 fatalities and scores of injuries, Palestinians are continuing to prepare a large-scale march for June 5.

This, combined with the demand for statehood which the Palestinians are taking to the United Nations in September, is the tumultuous background to Obama’s call on Israel to “make the hard choices”.

After meeting with Israeli prime minister Benjamin Netanyahu last week and the American-Israel Public Affairs Committee (AIPAC), Obama refused to back down from his insistence that peace negotiations must focus on Israel’s pre-1967 war borders.

While this is not a new position for US presidents, with Obama proposing “mutually agreed land swaps” in support of a two-state solution, it has nonetheless aroused fury in the Zionist camp.

A US official described Netanyahu’s arrogant, hostile response to Obama as “over the top” while in the United States itself, Zionists and the Republican right have launched a ferocious tirade. Some, suggested one website, consider Obama a “pro-Palestinian Marxist, Islamophile, anti-white bigot, anti-American Marxist and a tyrant in the making”.

While Obama is desperately trying to adapt to the Arab Spring, at the same time fearing its consequence in countries like Syria where he wants Assad to lead changes rather than go, his reference to pre-1967 borders is already looking decidedly shaky.

Palestinian leaders from Hamas and Fatah do not themselves agree on the proposal to return to the 1967 borders. And they currently face a boycott against their monopoly of politics by eight Palestinian groups affiliated to the PLO who have withdrawn from the negotiations to form the unity government recently agreed in Cairo.

The head of Fatah’s press office, Issam al-Halabi has rightly noted: “Politicians are following the people. They don’t have much say, the people are doing everything and this is a turning point in the Palestinian struggle to return, which has recently surprised everyone.” Palestinian negotiators should take advantage of these popular movements to “back up their stance during negotiations”, he believes.

Two things need to be said. One is that Netanyahu’s immediate rejection of Obama’s reference to pre-1967 borders killed off negotiations before they began. Secondly, exploiting the sacrifices of Palestinian youth in Gaza, the Golan Heights and throughout the Occupied Territories as a negotiating ploy is quite treacherous and cynical.

When Obama told the AIPAC that “we cannot afford to wait another decade, or another two decades, or another three decades to achieve peace” because the world “is moving too fast”, he was actually keenly aware of the truth.

He was, in effect, warning the Israeli ruling class that its days – similar to the position that the apartheid regime in South Africa found itself in - are numbered. The renewed Palestinian uprisings, like the incredibly courageous movements in Syria and Yemen, are part of a global movement against the status quo. It is mobilising countless youth from Tunis to Tahrir and now in the Spanish May 15 occupation movement. It is impossible to imagine this process succeeding without an independent Palestinian state.

Corinna Lotz
A World to Win secretary

Madrid echoes the spirit of Tahrir Square

The Real Democracy Now movement that has sprung up across Spain, with a main square in Madrid under occupation since Sunday, is a key moment in the developing global struggle against the failure of the political and economic status quo.

Drawing their inspiration from Tahrir Square in Cairo – where the Egyptian revolution began – thousands have organised themselves into a people’s assembly in Puerta del Sol to discuss a way forward. The movement, which is independent of political parties and the trade unions, used social networking sites to mobilise for the occupation.

A pamphlet distributed by organisers said they "do not represent any political party” and that "we want a new society that prioritises life over economic and political interests. We advocate a change in society and social consciousness. "Fabio Gándara, the spokesman for Democracia Real Ya, a 26-year-old unemployed lawyer who is studying to be a civil servant, said: "What we're denouncing is the lack of real democracy and the tendency toward a two-party system where corruption at all levels is simply scandalous.”

With tents, mattresses, a kitchen, a workshop and even a pharmacy, protesters have refused to budge, defying the decision of regional election officials that they should leave the square. They have also organised their own security teams to keep order in the square. There are at least 57 so-called "Sol campsites" that have popped up across the country in solidarity. Spaniards living abroad have also set up camps outside Spain's embassies in Berlin and London, and in Amsterdam's Dam Square.

In Spain – just as it was in Tunisia and Egypt, where the Arab spring began at the start of the year – the movement is driven by the “lost generation” of educated but unemployed young people. An estimated 45% of them are without work while average unemployment at over 20% is the highest in Europe.

They are the victims of a global capitalist recession which has devastated Spain’s economy which floundered when a gigantic property bubble burst in 2008. And they are casualties of the post-Franco dictatorship politics too.

The fascist regime was replaced by los señores Tweedledum and Tweedledee – aka the Socialist Party (PSOE) and the right-wing People’s Party (PP). Only fewer and fewer Spaniards can tell the difference between them. Both parties are endemically corrupt and have shared the role of integrating Spain into the global market-driven capitalist economy.

One result is that Spain is close to following Ireland, Portugal and Greece in seeking a bail-out from the European Union and the International Monetary Fund. That would spell not only the collapse of the eurozone but trigger a new global financial collapse.

That is why Real Democracy Now is saying “Don’t vote for them” – the PSOE and PP – in Sunday’s regional and local elections because neither represents the interests of ordinary people. This is an astonishing indictment of a parliamentary democracy that was only established in 1977 after Franco’s death two years earlier.

This, naturally, poses the question of if not this “democracy”, then what type of political system should replace it? The protests in Madrid, Barcelona, Seville and other cities, popularly known as M-15 as they began on May 15, have started that debate. In Sol Square there is a “democracy wall” where people have stuck hundreds of notes with their thoughts on them, declarations and statements.

In Egypt, the dictatorship was overthrown but power remains out of reach, resting in the hands of an army that owns a large chunk of the economy. In Spain, a 35-year-old parliamentary democracy leaves real power in the hands of the corporations and banks who use politicians as a front.

For a “real” democracy to work, it must involve the transfer of economic and financial resources into the hands of ordinary working people, alongside the replacing of the capitalist state by forms of popular power. Many took up the fight against Franco’s fascists in the Spanish Civil War in the 1930s with that aim in mind. The revolution was cruelly betrayed by Stalinism and then defeated. Puerta del Sol signals a chance to put history back on course.

Paul Feldman

Communications editor

Peak extraction of minerals spells disaster

Environmental damage and increased global warming are the direct result of a poisonous combination of commodity speculation, reckless overproduction and failing to recycle.

Parliament’s Science and Technology Committee highlight this deadly brew in the report of an enquiry into strategically important metals.

The price of metals and minerals is soaring, as hedge fund speculators move in. They are buying up vast quantities of copper on the London Metals Exchange – but also dealing directly in more obscure metals such as rare earths, lithium and tungsten.

The committee heard from the Royal Society of Chemistry that vast quantities of metals have been removed from the ground over the past 50 years (the period of corporate-driven globalisation more or less). There are still reserves but these are harder to get at.

“You just have to dig deeper,” the committee was told. But digging deeper uses more energy – contributing to global warming – and causes greater environmental degradation.

The Royal Institute of International Affairs confirmed that while there may be few short-term shortages, there is a growing pattern of metals being drawn into trade wars and political disputes. And in the long term, unsustainable consumption patterns will result in actual scarcities.

In other words, as with oil, there is a growing trend to higher metal prices, to resource wars and disputes, and to greater environmental degradation and global warming, up to and beyond the point of peak extraction.

The environmental impacts may be quite close to home. A Cornish tin mine is to reopen soon, as well as a tungsten mine on the edge of Dartmoor. They are extracting gold in Wales and the Grampian mountains.

The committee recognised that there is far greater scope for recycling and recommended “cradle to grave” models of production. However, since production of commodities largely takes place in other countries, the UK has no power to impose this approach.

And indeed the UK is guilty of exporting its recycling problems. Where cheap, but environmentally damaging processes are available, waste is often exported to other countries.

For example, insulated copper cable can be granulated and the plastic coating removed, so both materials can be reused. But the easy solution is just to burn off the plastic coating. “This creates environmental issues which, within the UK, would be expensive to overcome,” the committee heard.

Therefore the problem is being exported to places like India, China, Africa and the Philippines where the initial reprocessing is “crude and environmentally damaging”.

UK firms are also guilty of illegally exporting electrical and electronic equipment, labelled as second hand and for re-use, when in reality it is going to be dismantled by hand, with huge health risks for workers handling dangerous substances with no protection.

The committee also took the opportunity to refer practices on the London Metal Exchange to the Office of Fair Trading. They found that big trading firms were warehousing vast quantities of metals through wholly-owned subsidiaries, thereby benefiting twice from higher prices – as traders and as suppliers.

Sadly, the idea of a green economic miracle is impossible in a profit-driven capitalist economy. The majority of the money printed by the US and British governments in an attempt to fund a recovery has not been lent for green initiatives but drawn into commodity speculation. Governments have been entirely unable and unwilling to prevent this.

The contradiction is that the resulting rising prices will limit consumption. At this point more firms descend into bankruptcy and more workers are thrown on the dole. Whatever happens, it is ordinary working people – and the eco-system – that will pay. We need not only an economic, but first an enabling political revolution, to halt this crisis.

Penny Cole

Environment editor

How an IT programme became a licence to print money

Connecting for Health, the £12 billion national IT programme for the NHS launched in 2002, is in serious trouble according to the National Audit Office, and mighty have to be scrapped.

Billed as the world’s largest civilian IT infrastructure project, its primary objective was to provide an electronic care record for every patient. Since patients could find themselves being treated in a wide variety of different settings, by a growing number of clinical specialists, it was becoming increasingly important to ensure that they all had access to the record of care.

This would reduce the costs of repetitive examinations, and enable a much more effective collaboration between generalists and specialists. To those involved in population medicine, and public health specialists dealing with epidemics, access to an entire population’s health records promised a rich seam for research. Drug companies were hovering like vultures, awaiting new data on prescribing patterns and disease trends.

But now comes the NAO’s a stark conclusion: "The original vision for the national programme for IT in the NHS will not be realised. The NHS is now getting far fewer systems than planned despite the Department [of Health] paying contractors almost the same amount of money. This is yet another example of a department fundamentally underestimating the scale and complexity of a major IT-enabled change programme.”

But there’s a lot more to it than that. Before the programme was launched, hundreds of people across Europe and the USA, including clinicians and information specialists - those close enough to unravel the complexity of the project - had been working on the project for years. They were developing the standards needed to provide the development path that would ensure information could be shared across the multiplicity of systems that had been already installed in health care and those yet to be developed.

What the NAO doesn’t do is to judge the consequences of the decision by the New Labour government to hand the entire programme over to the private sector. Decades of work on standards were thrown away.

In 2003-04, the health department awarded five 10-year contracts totalling some £5 billion to four suppliers for the delivery of local care records systems: Accenture in the East and in the North East; BT in London; Computer Sciences Corporation (CSC) in the North West, and West Midlands; and Fujitsu in the South. The aim was for detailed care records systems to be delivered to all NHS trusts and GP practices (excluding GP practices in the south) by the end of 2007, with increased functionality and integration added until full implementation was complete in 2010.

The naïve expectation from the new project leaders was that the competing suppliers, with little or no knowledge of health care systems, would talk amongst themselves to develop the standards needed to enable records to be shared across all systems.

Now only BT and CSC remain in the game. Whilst the broadband communications infrastructure is up and working, and x-ray and other images are routinely transmitted, and many patients are offered a choice of where they go for hospital treatment, as the NAO says, the care record is unachievable.

After years of missed deadlines, incomplete and inadequate systems and adjustments to the specifications and contracts, the outcome is an indictment of both New Labour’s cosy relationship with the business sector and the failure of market-led solutions.

New Labour effectively gave IT contractors a licence to print money as part of the introduction of the market into health care. Next came foundation hospitals that were run like commercial organisations. You don’t have to be a genius to see where the ConDem government got its inspiration for NHS competition from.

Gerry Gold

Economics editor

Brown's short-term memory

So Gordon Brown is warning that the “world needs to act in concert” to avoid a re-run of the 2008 collapse of the financial system that, you may recall, happened on his watch.

The former New Labour prime minister is busily trying to reinvent himself as the man who saved globalisation from itself. He has written an apparently impenetrable book called Beyond the crash: overcoming the first crisis of globalisation.

Brown is also touted as a possible successor at the International Monetary Fund to that other alleged “socialist”, Dominique Strauss-Kahn who is currently in a maximum security prison in New York (not, unfortunately, for the crimes committed by the IMF itself).

Once Brown was a cheerleader for the global financial system that grew and grew to fund and drive forward globalisation. Who can forget his memorable speech to assembled bankers in June 2007, just before he replaced Tony Blair as prime minister.

The warning signs were already evident. Mortgage defaults were mounting in America, with home loan companies filing for bankruptcy. In Britain, personal debt had more than doubled inside six years, while people were being lent six, seven or eight times earnings by mortgage companies.

At the Treasury in Whitehall, studied ignorance was bliss. Brown’s speech praised his audience for creating an era “that history will record as the beginning of a new golden age for the City of London”. It was due in part, he said, to the City’s “deep and abiding belief in open markets” and noted how Britain was “a world leader in stability”.

No praise was too high for his audience, who heard: “The financial services sector in Britain and the City of London at the centre of it, is a great example of a highly skilled, high value added, talent driven industry that shows how we can excel in a world of global competition. Britain needs more of the vigour, ingenuity and aspiration that you already demonstrate that is the hallmark of your success.”

But a global economy driven by debt had reached and passed a tipping point. Within weeks of Brown’s speech, in August 2007, the credit crunch began as overnight inter-bank lending stopped. In September, worried savers started queuing outside Northern Rock branches to get their money out. The bank was nationalised by the end of the year.

Brown is admittedly more sanguine now. Writing for the US magazine Newsweek, he warns that “if the world continues on its current path, the historians of the future will say that the great financial collapse of three years ago was simply the trailer for a succession of avoidable crises that eroded popular consent for globalisation itself”.

Rest assured, Brown is not referring to capitalism as the problem here. He is worried that there is no system in place – despite the 2007-8 crash – to chart “volatile and unsustainable wave of speculative capital flows” and no global consensus on capital and liquidity requirements for banks.

He rues the fact that despite the euphoria of the G20 summit in London in January 2009, nothing came of its declaration. The summit, says Brown, “has given way to indecision, to vested interests, and to a retreat into national shells”.

This admission of failure says as much, if not more, about the nature of capitalism than it does about world leaders. Brown, Blair, Bush, Clinton, Reagan and Thatcher encouraged the deregulated growth of the financial sector. Only if people were provided with credit could they buy the commodities the corporations were churning out.

As finance became footloose and fancy free, transcending borders and nation states on the click of a button, and developing unfathomable “products” like collaterised debt obligations, it became impossible to re-regulate. Worse still, the indebtedness that ultimately brought down the banks is still present, an albatross that no one can get rid of. Brown’s fears of another great crash are absolutely justified.

Paul Feldman

Communications editor

IMF turmoil adds to sense of crisis

At another time, the fate of the head of the International Monetary Fund would not have mattered too much. But photos of Dominque Strauss-Kahn being led away in handcuffs by New York police have unsettled global markets.

And with good reason. The IMF, along with the European Union and the European Central Bank (ECB) is centre stage in a drama that has all the makings of an unravelling of the global financial system that would put the 2008 crisis in the shade.

Strauss-Kahn was due to hold talks in Europe today over the details of financial support to Portugal, which faces state bankruptcy, and about Greece, which is heading for default on its foreign debt despite a huge bail-out last year. Instead, Strauss-Kahn is due in court to face sex allegations relating to a hotel maid.

Most economists believe that Greece will default, with some loans having to be written off and longer repayments granted for the remainder. But the implications of such a move are so serious that Strauss-Kahn and European leaders like Germany’s Chancellor Merkel were desperate to find another solution.

Earlier this month, José Manuel González-Paramo, an ECB executive board member, said a Greek debt restructuring would be a disaster for the eurozone. There would also be knock-on effects on the balance sheets of banks in France, Britain and Germany that hold Greek debt. The risk premium demanded on Greek debt by international investors has rocketed.

"A restructuring would have legal and systemic consequences that are difficult to calculate right now but would in all probability be bigger than after the collapse of Lehman Brothers," he said. Just in case anyone needs reminding, when Lehman Brothers filed for bankruptcy in September 2008, it triggered a seizure at the heart of the global financial system and led to the deepest recession since the 1930s.

Greece’s predicament is just one of the consequences. Despite massive cuts in public spending - average pensions were cut by over 20% last year and civil servants wages slashed by 15% - the government’s deficit has actually risen because the recession has reduced tax and other revenues.

The country's debt has spiralled to 142% of national income. Portugal's total has reached 93% of GDP. Britain's annual debt of 10.5% last year pushed its total to 80%, compared with Germany's 83% and France's 82%. Greece’s Socialist Party government has announced plans to cut an extra €23bn in expenditure by 2015 and privatise €50bn in public assets, leading to threats of more strikes. There have been nine general strikes in the last 12 months.

At moments of crisis, the role of individuals like Strauss-Kahn – who played a key role in brokering help for Ireland, Portugal and Greece – is critical. So the enforced absence of the head of the IMF is not exactly what global capitalism was looking forward to this week.

As a former French finance minister, Strauss-Kahn personally knew most of the key leaders and officials managing the crisis. He was also due to challenge Nicolas Sarkozy for the French presidency next year on behalf of the country’s Socialist Party. That now seems improbable, leaving Sarkozy to walk home.

And if you think the financial crisis is confined to Europe, think again. President Obama has called on Congress to raise the upper limit on the federal deficit, which is currently running at $14 trillion a year. Yesterday he warned that if investors "around the world thought the full faith and credit of the US was not being backed up, if they thought we might renege on our IOUs, it could unravel the entire financial system".

If you’ve got any spare cash, it might be a good time put find a suitable mattress.

Paul Feldman

Communications editor

The great contraction

Signs of a great contraction of the global conomy are appearing throughout the world, pushing aside any lingering notions of the return to growth that capitalism requires.

Following six months of stagnation, the Bank of England said today that the near-term outlook for growth had worsened since February, while prices would rise, and that first-quarter growth had been slower than it had predicted. Governor Mervyn King also blamed the extra public holiday for the royal wedding, and disruption to supply chains from the Japanese earthquake, for the slowdown.

Since the recession started, the financial sector has shrunk by 9% - twice the 4.7% decline in the economy as a whole to the end of 2010. As big banks continue to offload loans and reduce balance sheets, the process is likely to constrain the economy’s growth rate for years to come.

In the United States, the independent Consumer Metrics Institute (CMI) presents a stark truth emerging through the clouds of delusional confidence. Last week it report that “after a week-long pause our Daily Growth Index resumed its movement into record territory, setting a new all-time low representing a 6.39% year-over-year contraction on May 3, 2011”.

Revised official figures from the US Census Bureau more than confirm the CMI’s more accurate grip on the reality of deepening decline. It reported that 2010 "furniture and home furnishings stores" sales were 3.6% weaker than previously reported, turning an 0.8% gain into a -2.4% contraction while "miscellaneous store retailers" dropped some 6.7%, nearly wiping out the earlier 7.6% alleged gain.

Japan, the world’s third largest national economy, is struggling to recover from the effects of the earthquake and tsunami which overwhelmed the inadequate and badly maintained defences of Tokyo Electric Power’s Fukushima reactors, forcing the closure of swathes of production across the world. Latest estimates from Goldman Sachs economists indicate a contraction of 0.2% in 2011 revised down from an 0.7% gain.

In the eurozone, Greece’s economy contracted by 4.5% in 2010 and is expected to shrink by another 3% this year. German consumers have been hit hard with a 2.1% monthly contraction in spending. The overall drop is 1.7% for the year, and it is now at the lowest level since November 2009. The German thrift is even more remarkable given that unemployment is lower there than anywhere else in Europe. In Spain the March 1.4% fall in retail sales extended the string of losses to twelve consecutive months. In bankrupt Ireland, house prices are down by at least 33% from their peak - the largest contraction in Western Europe since the global economic crisis began.

In Serbia, the International Monetary Fund, which provided a loan of €3 billion in 2008 are busy strong-arming the country’s government into revising its shrinking GDP figure for 2009 sharply downward from a contraction of 3.1% to over 6%As a result, Serbia’s debt – and the payments to be made by its increasingly unwilling population – will be sharply higher than previously thought. Tens of thousands have attended anti-government rallies.

Meanwhile, bonuses for chief executives at 50 major US companies bounced back by an average of 30.5% in 2010, the Wall Street Journal has reported. This was the biggest gain in at least three years. Goldman Sachs chief executive Lloyd Blankfein's total compensation, including a cash bonus, had been raised to $19 million in 2010. His pay package includes a salary of $600,000, a cash bonus of $5.4 million and stock awards of $7.65 million for 2010.

But while investment banks like Goldman Sachs prosper – having moved into commodity futures in a big way – the productive economy is going to hell in a handcart. The banks left over from the crash may be too big too fail – but the global economy itself isn’t.

Gerry Gold

Economics editor

A climate of suppression

Pre-emptive policing aimed at suppressing dissent and frightening people so that they will think twice about taking part in protests, is fast becoming the norm in a Britain more unequal and divided than ever before.

The student demonstrations last November against the stupendous rise in tuition fees imposed by a government with no mandate, was met with police violence not seen for some years. Since then, the tactics have shifted towards curtailing protests altogether.

On March 26, the day of the 500,000-strong TUC march against the cuts, some 138 peaceful protesters from UK Uncut were seized as they left Fortnum & Masons after an action designed to highlight the group’s campaign against tax avoidance. The aim of the operation was twofold: to get everyone’s name and address and to put the frighteners on. They face charges of aggravated trespass.

In the run-up to the royal wedding, a number of campaigners, including veteran activist Chris Knight, were seized from their homes by hordes of police. A total of 55 people were arrested on the day of the wedding and nearly 25 people were arrested before most planned demonstrations had even taken place.

The majority were either detained on conspiracy to cause a public nuisance, or were held under Section 60 stop-and-search rules on the day itself. Almost all of them were released without charge once the events drew to a close. Hannah Eiseman-Renyard went to Soho on the day of the royal wedding, dressed up as a zombie bride. She was talking to four friends when she was approached by more than a dozen officers and arrested for suspected breach of the peace.

Meanwhile, in Bristol recently, police launched a ferocious pre-emptive raid on a squat after protests about a new Tesco shop. Riot police were then brought out to deal with angry street protests. The courts have been “setting examples” by handing out jail sentences to protesters who may have damaged property.

Labour MP John McDonnell, one of the few parliamentarians to express solidarity with the protests, said today that these were examples of “a new climate of suppression of dissent that has emerged since the government faced demonstrations against its policies last November. Expressions of dissent are now met with heavy-handed policing tactics and example-making by the courts. It doesn't matter what the peaceful intent of your protest is, as members of UK Uncut discovered when they were sprayed with mace and arrested after a peaceful occupation of a shop in London.”

He added in an article in The Independent:

The government's new fear is that street demonstrations are about to be joined by large-scale co-ordinated industrial action. That is why further anti-union legislation is being increasingly mooted and the squatting laws are to be reviewed for fear of occupations. It is rational for a Government forcing deep cuts in public services and creating mass unemployment to protect itself by suppressing dissent. The dictat to the police after the attack on Milbank was clearly to do whatever is necessary to prevent this from happening again. For those who believe the government has no electoral mandate for its policies and refuses to listen, it is also perfectly rational for them to use the only mechanisms left open to them: strikes, direct action and the streets.

McDonnell is right and calls for an end to "political policing" and for them to facilitate protests, by some activists are sorely misguided. The police, as part of the capitalist state, are always the government’s boot boys in times of crisis. Under Thatcher, for example, they arrested and jailed thousands of miners in the 1984-5 strike.

The best way to defend the right to protest, and against planned new laws further curtailing the heavily-restricted right to strike, is through a mass movement aimed at removing the reactionary ConDem government from office. That would open up the possibility of transforming the present authoritarian state into a democratic, accountable body that serves rather than oppresses ordinary people.

Paul Feldman

Communications editor

The Palestinian street has spoken

Perhaps the most serious evidence that the reconciliation agreement signed last week in Cairo by Fatah and Hamas, the two main Palestinian organisations, upsets the global status quo is the chorus of denunciation by Israeli leaders.

The Arab spring – from Tunisia to Egypt – has inspired and driven on young Palestinians themselves and the speed of events has surprised everyone. And since Fatah and Hamas signed the deal, which was endorsed by 11 smaller Palestinian groups and brokered by Egypt’s new government, Israeli leaders from Prime Minister Netanyahu, Foreign Minister Avigdor Lieberman and opposition leader Tzipi Livni have all expressed their hostility.

The outbursts from Israel politicians and intelligence agencies, who have worked might and main to divide and rule, are backed up by the withholding of $89 million worth of tax revenues which the Palestine Authority needs to pay 170,000 civil servants and their dependents. This is an illegal act to undermine unity and economically starve the Palestinians, which even the ever-so-tame United Nations general secretary Ban ki-Moon has criticised.

Israeli leaders are terrified that the reconciliation deal that follows years of bitter conflict between Fatah and Hamas – one controlling the West Bank and Hamas the Gaza Strip – will gather momentum for a sense of real Palestinian unity and strength.

Their anger is in sharp contrast to the jubilant feeling in Palestinian refugee camps in the occupied territories and in places like the Ain al-Hilweh camp, the largest in Lebanon, where Fatah and Hamas flags fluttered together and people celebrated over the weekend.

The cessation of hostilities between Fatah and Hamas goes some way towards realising – at least on paper - the demands raised by thousands of Palestinian youth in the March 15 Movement. Two months ago, Palestinian youth under occupation in the Gaza Strip and the West Bank - who make up over 65% of the population there –as well as those living as second class citizens in Israel, took to the streets with 20 of them going on hunger strike. Via Facebook and other means, they issued a call to the governments of the West Bank and Gaza, demanding:

• the release of all political prisoners in the prisons of the Palestine Authority and Hamas
• an end to attacks by one organisation on the other
• the resignation of the governments of Haniyeh and Fayyad to re-build a government of national unity agreed by all Palestinian factions representing the Palestinian people
• the restructuring of the Palestine Liberation Organisation to contain all Palestinian factions and get back to its initial aim: Palestine’s freedom from illegal occupation
• the end of all forms of security co-ordination with Israeli occupation forces.

This new generation seeks national unity independently of political factions. Students and school children on the protest, said they were inspired by movements in other parts of the Arab world to initiate a political movement that would go on until unity was reached.

But as night fell, armed groups in civilian clothes were backed up by the Hamas authorities who then sent in the police. The peaceful youth and many women, journalists and photographers were beaten with sticks and clubs, facts backed up by the Palestinian Centre for Human Rights.

Nevertheless, their discredited leaders have been forced to respond to their “street”. And the Palestinian street, is, as rights campaigner Noura Erakat Erakat has noted, a global one. Perhaps the most significant factor, however, is the ongoing Egyptian revolution. The overthrown Mubarak dictatorship worked with the Israeli regime to turn Gaza into the world’s biggest prison camp. Now Egypt is preparing to open the Rafah border crossing into Gaza, which the Israelis have said they won’t allow.

Many Palestinians interviewed on the streets of Gaza after the deal was signed, are keenly aware that the reconciliation has been made out of a position of weakness by both Hamas and Fatah. Neither the pursuance of a two-state “solution” by Fatah, nor the militant Islam demonization of all Jews by Hamas, has paid dividends. A secular, one-state approach is required. For that to succeed, new leaders will have to come forward.

Corinna Lotz
A World to Win secretary

The break-up of old politics

The long-term break up of traditional party allegiances is confirmed by yesterday’s national and council elections. Last year’s general election stalemate may well prove the rule not the exception.

Neither the Tories nor Labour can command overwhelming support, especially as turn-out remains stuck in the low 60% range at general elections and much lower in other polls.

Labour’s loss of key seats to the right-wing populist Scottish National Party is indicative of the trend. Who would have thought that Lanarkshire, home of Keir Hardie, Labour’s first leader, would go over to the SNP? Once Labour could put up a donkey (and often did) and it would win in Scotland, enabling it to win at Westminster elections.

No longer. Labour’s bankrupt politics of embracing market capitalism has less and less appeal to working people in Scotland and elsewhere. New leader Ed Miliband’s appeal is so diffuse and undifferentiated from the Tories that he makes little impact. His support for the AV on the basis that it would force parties to broaden their appeal went down like a lead balloon.

The SNP’s demagogic populism even attracted the support of trade union leaders, according to party leader Alex Salmond. With half of Scots entitled to vote staying at home, it was hardly a resounding victory for the parliamentary democratic process or a vote for independence, which Salmond is now promising.

Political fragmentation brought the Lib Dems into a coalition with the Tories – and they took on the role of human shield for David Cameron and his “deficit reduction” plan – aka as massive public spending cuts. As a result, Nick Clegg’s party took a massive hit at the local elections and in Scotland while the Tories escaped relatively scot free.

This can only intensify tensions and contradictions at the top of the government, and even threaten Clegg’s position as leader. It is surely no more than 50-50 whether the coalition is able to stagger on for more than a year or so. Only a lack of organised opposition to its policies from Labour and the Trades Union Congress allows it to remain in office in any case.

The cuts in services and jobs at town hall level have been implemented by Labour, Tory and Lib Dem councils alike. Nothing will change as a result of yesterday’s elections, except that more Labour councils are ready to do the government’s bidding.

As they take control of town halls around the country, they will inherit cuts budgets and carry on with their implementation. Later this year, the new Labour councils will start work on budgets for 2012-13 which will involve further reductions in spending. Anyone who thought a vote for Labour was a vote against the cuts is sorely mistaken.

The elections solve nothing in that respect. Economic conditions continue to deteriorate, as the National Institute of Economic and Social Research pointed out this week. Its briefing said:

The weak recovery will feed through to lower tax revenues. That will mean that even if the spending plans are met over the next four years, public sector net borrowing will fall only to 3.6 per cent of GDP in 2015–16 rather than the 1.5 per cent projected by the Office for Budget Responsibility.



In plain language, it means that the government’s deficit is out of control and that deeper and deeper cuts are on the cards. The market capitalist economy has failed. Replacing it with a sustainable, not-for-profit economy is a political task that of necessity means going beyond the existing system and creating a real democracy.

Paul Feldman
Communications editor

The break-up of old politics

The long-term break up of traditional party allegiances is confirmed by yesterday’s national and council elections. Last year’s general election stalemate may well prove the rule not the exception.

Neither the Tories nor Labour can command overwhelming support, especially as turn-out remains stuck in the low 60% range at general elections and much lower in other polls.

Labour’s loss of key seats to the right-wing populist Scottish National Party is indicative of the trend. Who would have thought that Lanarkshire, home of Keir Hardie, Labour’s first leader, would go over to the SNP? Once Labour could put up a donkey (and often did) and it would win in Scotland, enabling it to win at Westminster elections.

No longer. Labour’s bankrupt politics of embracing market capitalism has less and less appeal to working people in Scotland and elsewhere. New leader Ed Miliband’s appeal is so diffuse and undifferentiated from the Tories that he makes little impact. His support for the AV on the basis that it would force parties to broaden their appeal went down like a lead balloon.

The SNP’s demagogic populism even attracted the support of trade union leaders, according to party leader Alex Salmond. With half of Scots entitled to vote staying at home, it was hardly a resounding victory for the parliamentary democratic process or a vote for independence, which Salmond is now promising.

Political fragmentation brought the Lib Dems into a coalition with the Tories – and they took on the role of human shield for David Cameron and his “deficit reduction” plan – aka as massive public spending cuts. As a result, Nick Clegg’s party took a massive hit at the local elections and in Scotland while the Tories escaped relatively scot free.

This can only intensify tensions and contradictions at the top of the government, and even threaten Clegg’s position as leader. It is surely no more than 50-50 whether the coalition is able to stagger on for more than a year or so. Only a lack of organised opposition to its policies from Labour and the Trades Union Congress allows it to remain in office in any case.

The cuts in services and jobs at town hall level have been implemented by Labour, Tory and Lib Dem councils alike. Nothing will change as a result of yesterday’s elections, except that more Labour councils are ready to do the government’s bidding.

As they take control of town halls around the country, they will inherit cuts budgets and carry on with their implementation. Later this year, the new Labour councils will start work on budgets for 2012-13 which will involve further reductions in spending. Anyone who thought a vote for Labour was a vote against the cuts is sorely mistaken.

The elections solve nothing in that respect. Economic conditions continue to deteriorate, as the National Institute of Economic and Social Research pointed out this week. Its briefing said:

The weak recovery will feed through to lower tax revenues. That will mean that even if the spending plans are met over the next four years, public sector net borrowing will fall only to 3.6 per cent of GDP in 2015–16 rather than the 1.5 per cent projected by the Office for Budget Responsibility.



In plain language, it means that the government’s deficit is out of control and that deeper and deeper cuts are on the cards. The market capitalist economy has failed. Replacing it with a sustainable, not-for-profit economy is a political task that of necessity means going beyond the existing system and creating a real democracy.

Paul Feldman
Communications editor

Peak oil is passed as renewable targets plummet

Peak oil has passed us by – it happened in 2006 according to Faith Birol, chief economist at the International Energy Agency. He made this astonishing statement in a number of interviews on television stations in the US and Australia.

Governments, said Birol, should have started thinking about all this ten years ago: “The time is running out, the oil is today our lifeline, it is everywhere in the economy, if the prices go up or if there’s a supply disruption this will be definitely very bad news.”

By 2035, three-quarters of the world’s oil production from existing fields will need to be replaced, according to the IEA’s World Energy Outlook report 2010. By then, crude oil output from fields that were in production in 2009 will have fallen from 68 million barrels per day in 2009 to 16 million per day, leaving a gap of 50 million barrels per day to be filled.

As production falls, prices increase – crude oil is currently over $100 a barrel compared to about $40 in 2009. The gap is being filled by a surge in new fossil fuels - shale gasification, extraction of oil from tar sands, and increased reliance on natural gas and coal.

The IEA’s first Clean Energy Report published in April states that surging demand for fossil fuels is “outstripping deployment of clean energy technologies”, adding:

“Coal has met 47% of the global new electricity demand over the past decade, eclipsing clean energy efforts made over the same period of time, which include improved implementation of energy efficiency measures and rapid growth in the use of renewable energy sources.”


In a hard hitting introduction to the report, the IEA states: “Less than three years after fossil fuel prices hit an all time high and the world plunged into its deepest recession since the Great Depression, geopolitical events are driving prices steadily higher.

“The short-term risks to political stability and economic activity posed by the world’s dependence on fossil fuels are again as manifest as its long-term threat to environmental sustainability. To break this dependency, the world needs a clean energy revolution.”

But no such revolution is in sight. In fact the opposite is happening. Renewable energy is being abandoned by governments, in the wake of the economic crisis.
EU Energy Chief Connie Hedegaard has spoken about ferocious lobbying by the European gas industry, representing themselves as a clean energy source. She expressed concern that when current European targets for renewable energy run out in 2020, the industry will simply stop growing.

And in any case states never could have invested, or subsidised, at levels to provide real competition to big fossil fuel interests. Only ecologically dubious bio-fuel can stand up to them to some extent, with processes that are only marginally more sustainable than fossil fuels themselves.

One estimate is that by 2030 renewables will have risen from their present 5% of the total to just 18%, and gas will be the biggest growth area. Oil and coal will fall slightly as a proportion of the whole but fossil fuels will remain the heart of the energy mix for the foreseeable future.

In 2009, the IEA set out the energy shift required to prevent dangerous climate change. By 2030, 60% of energy would need to be produced by low-carbon energy technologies – made up of renewable technologies (37%); nuclear (18%) and energy plants fitted with carbon capture and storage technology (5%).

That mix is not achievable if the current power structures – state power, corporate power and electric power – remain in place.

Penny Cole
Environment editor

One corporation's power over life and death

Until now the largest and wealthiest commodities trader in the world, notorious for tax avoidance, has managed its murky business in the shadows. But it needs capital to fuel its growth, hence its launch on the London stock market today.

Most people on the planet will not have heard of Glencore, but virtually all are only too well aware of the inflationary effects of its control of a wide range of commodities. Glencore controls 60% of the world’s trade in zinc and 50% in copper.

According to the World Bank’s Food Price Watch, since June 2010, an additional 44 million people fell below the $1.25 poverty line as a result of higher food prices. In March 2011, the food index remained 36% above its level a year earlier.

Even the notoriously right-wing Daily Mail is disturbed by Glencore’s power over life and death. A special investigation says:

“Its empire stretches from the jungles of Colombia to the plains of Australia. It makes its money from metals, minerals, oil, sugar, grain — commodities that form the very building blocks of world trade. And, armed with the best possible knowledge of global events, its traders buy these at the lowest possible price and sell at the highest possible mark-up.”

With its share issue – the biggest-ever in London – Glencore is now drawing together many more threads in the global web of capital consolidation that is driving food and fuel inflation and forcing tens of millions over the edge into starvation.

Everyone who is anyone in the exploitation of the planet and its people wants to get in on the game of building profit from starvation. Aabar, a unit of Abu Dhabi’s International Petroleum Investment Company is set to be its largest external investor, taking $1 billion. GIC, Singapore’s sovereign wealth fund, will take $400m. Fund managers BlackRock and Fidelity, are set to take $360m and $215m, respectively. Swiss banks Credit Suisse, UBS and Pictet will also take part. Zijin Mining, the Chinese group, will buy as well as several other institutional investors, including hedge funds Och Ziff, Eton Park and York Capital. The launch brings huge fees to the banks which underwrite it. The group is led by global co-ordinators Citigroup, Credit Suisse and Morgan Stanley.

Commodity speculation took off in a big way in the wake of the 2007/8 global financial meltdown. In a co-ordinated panic action, governments and central banks threw billions of every currency onto the world’s credit markets trying to stave off the inevitable recession. But with banks refusing to lend, a great deal of the money found its way into the commodity markets, driving price inflation way beyond the effects of demand and supply pressures.

In 2003, the commodities futures market amounted to just $13 billion. But when the global financial crisis hit, commodities – including food – seemed like the last, best place for hedge, pension, and sovereign wealth funds to park their cash. "You had people who had no clue what commodities were all about suddenly buying commodities," an analyst from the United States Department of Agriculture said. In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was rolling the markets. From 2003 to 2008, the volume of index fund speculation increased by 1,900%.

But speculation is not the only cause of inflation in food and fuel. Severe weather vents induced by climate change, increased competition for food and land especially from China, increasing costs of production as oil reaches its peak. And the switch to bio-fuel also contributes to the underlying pressures that Glencore and the other speculators feed upon.

A small, and now declining. number of global corporations driven by profit for the benefit of shareholders, have brought the planet to the limits of its ability to support life, and its people to the limits of their ability and willingness to endure its effects.

Gerry Gold
Economics editor