Osborne declares class war

On the eve of today’s historic strike by public sector workers in defence of hard-won pensions, the unelected coalition ConDem government yesterday delivered a new, more vicious, sustained assault on living standards.

What chancellor George Osborne announced in his autumn statement was a blatant transfer of wealth from working people to the corporations and bankers who are responsible for the accelerating crisis of capitalism. In doing so, he effectively ushered in an unprecedented period of social conflict.

With imagined growth failing to materialise, the global economic crisis deteriorating rapidly, government borrowing soaring by a shock £111bn, and the credit rating agencies looking over his shoulders, breathing heavily, chancellor Osborne slashed his way through public spending.

Before the statement, ratings agency Fitch threatened that Britain's ability to absorb further economic shocks while keeping its top triple-A credit rating was "largely exhausted" unless the government took further steps to cut its deficit.

And so it has.

Public sector job losses will rise to 710,000 from an original estimate of around 400,000. Government spending will fall by 0.9 per cent in real terms for the period 2015-17. That is a bigger cut than in the period from 2011 to 2015. Public sector pay will be held well below the rate of inflation - a pay cut by another name.

The new, much bigger attack is certain to intensify the slow-burning anger over pensions that built over months into today’s strike by as many as two million trades unionists.

According to RMT transport union leader Bob Crow:

"George Osborne has ratcheted up the class war and has made it clear through his attack on pay and employment rights that he wants the workers to keep taking the hit while the rich get richer. After two years of a freeze, pay for millions of key workers will go up by 1 percent in the next two years.

With inflation over 5 percent, and the increase in pension contributions, that means nurses and the others we rely on will be around 25 percent worse off after four years of this ConDem government while top bosses pay goes up by 12 percent a year. That's a scandal."

After the statement, Fitch patted Osborne on the back, but warned further steps will be needed.

Former Conservative minister Michael Portillo also says it won’t be enough. Foreshadowing a much more brutal style of bankers’ government, like those recently installed in Greece and Italy he says:

“Britain will have to reduce welfare and public sector employment dramatically. The state will need to step back from education and health where it simply doesn’t do a good enough job. Such changes may be too draconian for a coalition, yet the public may find them too radical to accept from a single-party government. The only question, however, is whether we will tackle those big issues soon, or merely ensure prolonged stagnation by postponing the inevitable.”

The stark reality is that capitalist society can no longer sustain the public sector no matter how loud the protest. A series of general strikes in Greece have failed to stop repeated attacks on living standards demanded by the ratings agencies and imposed by the European Union, European Central Bank and the International Monetary Fund.

The conflict moved to a new stage with the sweeping away of the elected PASOK government and its replacing by a coalition (including an ultra-right party) led by an advisor to investment bank Goldman Sachs.

With the eurozone careering towards an apocalyptic collapse, the ramifications are being felt throughout the world. Late last night, ratings agency Standard and Poor downgraded the biggest banks in the US, including the Bank of America which is heavily exposed to euro loans.

The response to Osborne and the ConDems from rallies in towns and cities throughout Britain should be to support the worldwide occupy movement and form People’s Assemblies. These can become the power which will lead and shape a new democratically-owned and controlled, sustainable economic, social and political system. As someone once said, there is no alternative.

Gerry Gold

Economics editor

Militarized policing comes to America

The crackdown on the Wall Street occupation and similar actions around the country have prompted two authors to warn about an increasing militarization of America’s policing.

Tom Engelhardt, whose latest book, The United States of Fear is out this month, has dubbed the space in New York that police brutally cleared of occupiers as “Zuccotti Prison”. He says that there are no tents, no kitchen, no library left in the park.

Just 30 protesters and 100 police plus private security guards. Parts of the park are cordoned off with yellow police tape that would normally surround a crime scene. When he went there last week, a young protestor was being arrested, evidently for the “crime” of lying down on a bench.

Engelhardt writes gloomily about a “distinctly up-armoured, post-9/11 American world”, citing the example of the “police” who so notoriously pepper-sprayed non-violent, seated students at University of California Davis. They were, in fact, campus cops who in his days wore civilians clothes and had no real powers.

“Now, around the country, they are armed with chemical weapons,Tasers, tear gas, side arms, you name it. Meanwhile, some police departments, militarizing at a rapid rate, have tank-like vehicles, and the first police surveillance drones are taking to the air in field tests and capable of being weaponized.”

He warns: “In the United States, increasingly, those in power no longer observe the law. Instead, they make it up to suit their needs. In the process, the streets where you demonstrate, as (New York’s mayor keeps telling us) is our ‘right’, are regularly transformed into yet more fenced-in, heavily surveilled Zuccotti Prisons. This may not be a traditional police state (yet), but it is an increasingly militarized policed state in which the blue coats [police], armed to the teeth, act with remarkable impunity.”

William Hogeland, the author of the narrative histories Declaration and a collection of essays, Inventing American History writes how the crackdowns around America “have brought a military level of combativeness” to the scene.

It's not as if officers have been resorting to battle gear under otherwise unmanageable pressure or initiating violence only as a last resort. They've been arriving in battle gear. They've been construing noncompliance as potential attack. They've moved pre-emptively to disable attack where none existed, not just trying to evict but seemingly hoping to inspire fear, to punish and defeat. The mood these operations convey is that failure to achieve police objectives must result in something awful for the body politic. In reality, leaving citizens sitting around a park or campus a few more days, even possibly illegally, might be frustrating for police and others; it's hardly the end of the world. Sometimes taking a few deep breaths is the only thing to do. But military training, tactics, and weaponry seem to inspire the idea in civic strategists that failure to achieve an objective is tantamount to fatal defeat by a hostile enemy. Intolerable. Not an option.

He shows how creating a clear distinction between the police and military is fundamental to American constitutional law, history and ideology. Hogeland's article reviews tendencies both toward and against police militarization that go all the way back to the country's founding.

Some like Naomi Wolf see a conspiracy by the federal state to galvanise local authorities into action (see a sound demolition of her argument by Alternet’s Joshua Holland) against the occupation movement. No conspiracy is required, however. There is a nervousness within the state at all levels as the economic crisis worsens and the American dream looks more like a nightmare. The result is a lashing out by authorities whose legitimacy, not to say democratic credentials, is seeping away at federal and state level. Time for another American revolution to protect, enhance and advance democracy in new ways.

Paul Feldman

Communications editor

Corporate body snatchers at work

The patenting of human genes is going on at a terrifying rate. And most people don’t even know that their bodies are being used to generate vast corporate profits.

Harriet Washington has researched major changes in United States law which have legalised the “corporate takeover of life itself”.

In an interview with AlterNet, she outlines how a crucial piece of legislation, the Bayh-Doyle Act of 1980, unleashed the granting of 40,000 patents over the past 30 years.

Before the legislation, universities that did the gene research were not allowed to sell their patents to private corporations, on the grounds that the discoveries had been developed with public money or “tax dollars”.

The US Supreme Court, in the 1980 landmark case in Diamond v Chakrabarty, went much further than the researcher (Ananda Chakrabarty) and the patent office expected. Rather than patenting Chakrabarty’s invention of process of creating bacteria which could “eat crude oil”, the court decided that living things themselves could be patented.

More recently, the ruling has allowed not only genetic sequences in our bodies to be patented but even entire living creatures, such as the OncoMouse which “is guaranteed to get cancer”, developed by Harvard University.

Washington points to the cases of two patients whose cells were used to make millions of dollars in profits for the medical-industrial complex. The patients concerned were never consulted or compensated. Adding insult to injury, the family of African-American Henrietta Lacks were lied to. They believe that researcher Dr George Gey of the prestigious John Hopkins university “did not want the world to know that this was a black lady helping science”.

In the case of leukaemia patient John Moore whose spleen was used to create a lucrative cell line, Dr David Golde of the University of California got a contract for $3 million in 1980 with generic drug manufacturer, the pharma giant Sandoz, a subsidiary of Novartis.

Many hospitals ask unsuspecting patients to sign consent forms before surgery which hand over the rights to any tissues of cells taken from the body to private corporations.

The gene/body-part sell-off is even more widespread after someone dies. Medical examiners laws or presumed consent laws allow coroners to take tissues and then sell them on to brokers who transfer them to surgeons or hospitals. “At each step, there is a hefty fee paid,” Washington says.

What about the argument that companies are saving lives through medical research which would otherwise not be carried out? The reality is that corporations like Myriad Genetics, which hold patents on the genes that predispose women to breast cancer, do not allow researchers to work on the genes without their permission. The American Civil Liberties Union and a patent body have mounted a legal challenge.

Washington’s accounts of how companies use and abuse the African continent for cheap drugs trials are even more shocking. During a meningitis epidemic in Nigeria, Pfizer set up tents directly next to those operated by Doctors Without Borders to draw in desperate parents.

As Washington notes: “Maximising the profit on the patient is the focus, not curing the maximum number of people.” Of the 1,233 new drugs devised by Big Pharma between 1975 and 1997, only four were designed for people in the developing world.

Attempts by benevolent capitalists like Bill Gates to bring vaccines to the developing world are problematic. His initiative, called GAVI, is already $3 billion in debt.

In case we lull ourselves into seeing this as American madness, in the UK things are possibly even more dangerous. Over a decade ago, New Labour drove through legislation allowing private companies to claim plant and animal genes and even human organs.

The UK Supreme Court overturned an earlier decision so that the Nasdaq-listed Human Genome Sciences corporation now has greater patent rights in the UK than under current US law.

Corinna Lotz

A World to Win secretary

Don't let the ConDems off the hook

Seldom has a government looked in such disarray as the ConDems do in the countdown to what is effectively a mini-general strike in defence of public sector pensions. All that keeps them from crumbling is the weakness of the opposition ranged against them.

In past industrial confrontations, Tory governments have succeeded in mobilising state forces, middle-class volunteers (1926 general strike) and in dividing strikers (miners’ 1984-5).

Such is the contempt in which this Coalition is held that even normally-reliable parts of the state are in revolt while volunteers are in short supply. Middle-managers who were expected to take over immigration points at airports on November 30 – as they did in June – instead plan to join the walk-out.

They are undoubtedly acting in revenge for the way home secretary Theresa May recently scapegoated Brodie Clark, the head of the Border Agency, in a row over immigration checks. He quit his job after 30 years as a civil servant following his suspension by May.

In desperation, the government is offering volunteers £450 to break the strike at Heathrow and elsewhere and is bringing in the contractor Serco. Meanwhile, prime minister Cameron has made himself a laughing stock by suggesting mothers take their children to work because teachers are walking out next Wednesday.

Fortunately for the ConDems, November 30 is restricted to a one-day action against plans to cut pension entitlements for public sector workers while telling them they have to pay higher contributions for longer periods.

There are no plans for further co-ordinated strikes. Instead, the leaders of unions like Unison and the GMB are planning a guerrilla campaign of what are being called “smart strikes” at local level.

This is a recipe for grinding the struggle into the dust, leaving the government the option of imposing the changes over the winter or union leaders signing up to some rotten compromise deal such as protecting present staff at the expense of future generations.

Urging caution, naturally, is the Labour leadership under Ed Miliband. This week’s shadow cabinet declined to endorse the pensions’ strike. Instead, Michael Dugher, the shadow cabinet office minister, called for a settlement “fair to low-paid workers and taxpayers alike”.

Clearly, the last thing Labour wants is to return to power a) on the back of industrial action against the government b) when the economic and financial crisis is worsening by the day.

Miliband acknowledged once more yesterday that Labour would also cut the public spending deficit, and attacked the government’s policies – but only because they might leave his party with more to do if they were re-elected in 2015.

That’s alright then. Of course we can wait another three-and-a-half years for a general election to oust this reactionary, destructive government that is busily building on New Labour’s “achievements”. Then Miliband will sweep into Downing Street to build the “prosperous capitalism” he is promising us – and carry on cutting.

Put like that and it reads like the nonsense it is. The UK economy is going to hell in a handcart and is about to be hit by what one commentator is calling the “biggest mass default in history”.

Investors are pulling out of euro bonds, including Germany’s, because they sense that the single currency is on the verge of collapse, overwhelmed by the debts of member states. No one wants to be left holding euro-dominated bonds when the music stops. UK banks were warned this week to prepare for a disorderly break-up of the euro.

So the November 30 strike coincides with a government looking out of its depth as it faces a perfect storm blowing in from Europe and with the loyalty of parts of the state in question. You can be sure, however, that less public sides of the state are paying great attention to the building crisis and have contingency plans. The Coalition was thrown together to appease the financial markets. Who is to say that Labour itself won’t yet find itself part of a grand coalition to act in the “national interest”?

Paul Feldman
Communications editor

Kyoto II abandoned as corporates call the shots

Any attempt to reduce the risk of runaway climate change with a new international treaty to limit carbon emissions is off the table for the foreseeable future as corporate profits take precedence.

The next round of UN climate talks in Durban next week will be a waste of time, since the richest countries have already made clear in private they are not ready to even make a start on negotiating a binding agreement to replace the Kyoto protocol before 2016.

As former Bolivian UN climate change representative Pablo Solon says: “The Kyoto Protocol has many weaknesses, but to turn it into an empty shell or make it disappear in Durban would be suicide. The only responsible alternative is to preserve the Kyoto Protocol with an emissions reductions goal that allows us to avoid incinerating the planet.”

The Alliance of Small Island States, which represents countries that would disappear in a “business-as-usual” scenario say the delay is "reckless and irresponsible". Fatih Birol, chief economist at the International Energy Agency (IEA), warned that without an international agreement working by 2017 the chance to hold a rise in global temperatures below 2ºC “will be closed forever".

The failure to make a serious start on cutting emissions means global output of CO2 has already jumped again, rising by the biggest amount on record in 2010. The world pumped out about 564 million more tons of carbon than it did in 2009.

That's an increase of 6% a "monster" rise that is unheard of, says Gregg Marland, a professor of geology at Appalachian State University, who has helped calculate the figures for the US Department of Energy.

As a result, the scenario for climate change is beyond than the worst case scenario outlined by scientists working with the Intergovernmental Panel on Climate Change only four years ago.

At the last round of talks in Cancun, developed capitalist countries promised to pledge emissions cuts (to be achieved between 2012-2020) that would limit warming to 2ºC. This rise in itself would mean millions of deaths from drought and flood, and putt some 20-30% of animal and plant species at risk of extinction. Many coastal zones and island states would sink below the waves and glaciers disappear entirely.

But the actual pledges made since Cancun would lead to an average increase in global temperature of around 4°C or more – a catastrophic level which it seems likely the ecosystem could not survive.

The complex impact of global warming on weather was highlighted this week in a new IPCC report. It warns that in a high emissions scenario “it is likely that the frequency of hot days will increase by a factor of 10 in most regions of the world” and that “heavy precipitation will occur more often, and the wind speed of tropical cyclones will increase while their number will likely remain constant or decrease”.

No measures are being taken to prepare for these problems – quite the opposite. More fossil fuels – the major contributor to global emissions – are being burned than ever before. No attempts have been made to support serious development of renewables. Air travel has contributed to the leap in emissions measured by the US Energy Department, and as far as manufacturing is concerned “from an emissions standpoint, the global financial crisis seems to be over,’ says Tom Boden, who chairs the US Energy Department’s carbon dioxide information analysis centre.

And that’s the heart of the matter: Capitalism and its political proxies at state level will pay any price to achieve growth. The only diplomacy that will achieve the kinds of cuts in emissions needed to halt climate change is the open discussion and debate taking place between global assemblies of free peoples. Liberated from the drive for profit, they will shift to a system of planned production for need, and start to try to repair the damage.

Penny Cole
Environment editor

An economic system beyond reform

Some 170 economists have issued a statement in support of the occupation movement in the United States and put forward policies which they say will “liberate the economy from the short-term greed of the rich and powerful one percent”.

The predominantly American grouping calling itself Econ4 is opposed to the market fundamentalists whose theory has failed, they say. Instead, they want an economy that works for the people, for the planet and for the future. They are concerned about human health, the consequences of pollution and fairness.

It is stirring and attractive stuff and their support is welcome because it shows that the hostility to the present economic system demonstrated at Occupy Wall Street and throughout America is hitting home.

But with calls to end capitalist rule bubbling up from occupations around the world, in reality Econ4’s policies will only confuse those searching for a really new start because in practice they are a variant on the status quo.

The four principles of Econ4’s “profound departure from the orthodox economics of the past” hardly differ from the aims of the social democratic, welfare-supported parliamentary democracies which emerged in the wake of the Second World War: equality of opportunity, an economy able to withstand unexpected shocks, prices determined by full cost-benefit accounting, and “real” democracy.

These are aims which have long been buried under the rubble left by the capitalist credit-fuelled push for growth which took over the world in the process generally known as globalisation. For the capitalist system there was no alternative, and it was this growth imperative that forced the deregulation needed to allow credit to expand.

In a table in their mission statement, Econ4 set out their differences with “orthodox” economics, and it is there that you’ll find the only reference to capitalism in the whole document. They want to replace “managerial capitalism” with “shareholder democracy”.

That too is an old-fashioned look back to the even earlier days of capitalism when the issue of shares enabled the formation of joint-stock companies providing the additional capital needed to fund the investment needs of competing manufacturers. Shareholders had rights. The richer you were, the bigger the share you could buy, and the more rights you had. Something to aspire to? I think not.

Econ4 say they are not starting from scratch. They’re putting together a programme built around the funds of billionaire speculator George Soros who has committed $50 million to the Institute for New Economic Ideas, the Schumacher Society, and the UK-based New Economics Foundation. All accept the capitalist system of production – they just want it to operate more fairly. No doubt they would endorse Labour leader Ed Miliband’s call for a “responsible” capitalism.

But the crash of 2011 is ensuring that the orthodoxy of market fundamentalism is giving way to something much more brutal and a far more profound struggle is under way. The economic crisis has created and now coincides with a political crisis. In attempting to prevent economic collapse, bankers are replacing elected governments.

Agencies like the IMF and the European Central Bank act on behalf of the tight network of global corporations. They have their men in power in Athens and Italy and have put the new Spanish government under notice.

On the other side, the 99 per cent are rising up against capital and finding their voice in occupations throughout the world. The takeover of the long-empty UBS building in London and its transformation into an Ideas Bank is far more inspiring than half-baked plans for a more decent capitalism. And from the global spread of occupations can come a global network of People’s Assemblies as the democratic framework for a new economy.

Gerry Gold

Economics editor

Time to sack the watchdog

Two advisors have resigned from the community group set up by the Independent Police Complaints Commission after the police killing of Mark Duggan in Tottenham last August.

The move marks a serious breakdown of relations between the black community and the body that is supposed to monitor police behaviour.

A statement by Stafford Scott reveals the IPCC’s complicity in a process of deliberate disinformation. Scott, who has engaged with the police since the Macpherson report, says that police removal of the vehicle that Duggan travelled in shortly before he was shot has so tainted the investigation that “we will never be able to have faith in their final report into the killing.”

Scott says the IPCC broke its own guidelines “by giving out erroneous information to journalists regarding the 'shoot-out' involving Mark Duggan and police that didn't actually happen.”

Both the Met and the IPCC are now threatening to report the Guardian to the Press Complaints Commission for stating that Mark Duggan was unarmed at the time he was shot by a police marksman.

Scott, who was an advisor to the Met, now believes the IPCC suffers worse flaws than the force it is investigating.”

But the police killing of Duggan is, human rights campaign group Black Mental Health UK, says, is not simply an isolated example of cover-ups. It forms part of a pattern and a “hidden history” of black people in Britain.

Matilda MacAttram, editor of the BMH’s Solution Magazine , told A World to Win that “a very important part of the black experience is marked by deaths in custody. This is something as live today in the recent cases of Kingsley Burrell-Brown and Mark Duggan as it was over 42 years ago when police hounded David Oluvale to death and threw him into a river.”

The second-ever edition of the on-line magazine, produced during Black History Month, has Oluwale and five other black men on its commemorative cover. Oluwale, Orville Blackwood, David Bennett, Mikey Powell, Sean Rigg, Kingsley Burrell-Brown - none of them over 40 years of age - all died in custody between 1969 and 2011.

“It is a pattern, which is the same whether or not you are a mental health user. The deaths of these men may not seem linked, but for their families, a fit and healthy man, their loved one, no longer exists,” MacAttram says.

The Solution Magazine highlights the long-term effect of deaths in custody or during police raids on the children left behind, by interviewing the sons of Orville Blackwood and Cherry Groce.

African Caribbeans are 50% more likely to enter the psychiatric health system, 44% are more likely to be sectioned, 29% more likely to be forcibly restrained, 50% more likely to be placed in seclusion. Detention rates for people from the UK African Caribbean community has doubled over 2005-2010 and over half the deaths of people in police custody are mental health users.

Stafford Scott and his fellow adviser John Noblemunn should be commended for refusing to serve on the community reference group set up by the IPCC. Scott has courageously broken the confidentiality agreement he signed when agreeing to serve on the group. He is now calling for “a body truly willing and able to investigate the police,” which he says, “is the only way to ensure that they will learn from their mistakes; and that, when mistakes occur, communities do not believe the one route to justice lies in taking matters into their own hands.”

But the lack of progress in the treatment of ethnic minority and black people in custody, whether directly by police or in mental health institutions, shows that existing institutions are far more than just flawed. It is a powerful argument for the disbanding not only of the IPCC, but of the police and the prison system and their replacement by bodies under the control of communities they are intended to serve.

Corinna Lotz

A World to Win secretary

Arab Spring leads to winter revolution

The prospect of Egypt’s second uprising inside a year is more than a challenge to continuing military rule; it also poses the transformation of the democratic into the social revolution.

Many had hoped, wrongly, that the army which facilitated the removal of Hosni Mubarak by standing aside from the January revolution, would step aside once parliamentary elections had been held. "The army and the people are one hand," many chanted when Mubarak quit.

But there was too much at stake for the Supreme Council of the Armed Forces (Scaf) to allow that to happen. They are part of the Egyptian ruling class in the most literal sense, owning large chunks of the economy.

As much as one-third of Egypt's economy is under military control through a host of government-owned service and manufacturing companies, at least 14 of them under the auspices of the Military Production Ministry. El Nasr Co. for Services and Maintenance, for instance, has 7,750 employees in such sectors as child care, car repair, and hotel administration.

In a secret cable dated September 2008 signed by U.S. Ambassador to Egypt Margaret Scobey, the embassy in Cairo told Washington that the Egyptian military was "becoming a “quasi-commercial” enterprise itself.

Other military companies produce small arms, tank shells, and explosives — as well as exercise equipment and fire engines. These companies add up to "a very large, unaccountable, non-transparent Military Inc.," says Robert Springborg, author of Mubarak's Egypt: Fragmentation of the Political Order.

The generals "will try to massage the new order so that it does not seek to impose civilian control on the armed forces," he said in February. "It's not just a question of preserving the institution of the army. It's a question of preserving the financial base of its members."

And that is just what has happened. Next Sunday’s scheduled elections would result in a powerless parliament and a military that is exempt from political oversight and control, according to a protocol that the generals got the interim government to sign up to.

The army has been tightening its grip on power since Mubarak was overthrown. They have processed 12,000 civilians through military tribunals, more in 10 months than the former president managed in his 30 years of rule.

Outspoken critics are in jail while blogger Maikel Nabil has been on hunger strike for almost three months in protest against military trials. There are official bans on strikes and demonstrations and the army provoked sectarian violence against Coptic Christians as part of its divide and rule strategy.

Some activists now realise that the euphoria of January masked the tasks that still lay out ahead. “We handed power to the military on a silver platter," said Ahmed Imam, a 33-year-old activist, of the January uprising. "The revolutionaries went home too soon. We collected the spoils and left before the battle was over."

The removal of the army from power will require a strategy that goes beyond the creation of a parliamentary democracy. In itself, that would not be able to deliver on the needs of the Egyptian people in terms of jobs and a better standard of living.

A parliament that leaves economic relations unchanged would, be at the mercy of global banks and the International Monetary Fund, as is patently the case already in countries like Greece, Italy and Spain.

As the November revolution gets under way in Egypt, it can inspire the rest of the world by going beyond capitalist-army economic ownership and handinf over the productive resources to people in the cities, towns and countryside. That is something the Egyptian people could unite around and the people’s assemblies created in January can take on the job of achieving this transformation.

Paul Feldman
Communications editor

London banks in doomsday planning

Reports that London-based global banks are playing “war games” to work out what to do if a country quits the eurozone or the currency collapses, is a stark indication that the financial crisis is out of control. Survival is the only item on the agenda as meltdown looms.

The scenario planning coincides with rising political tensions across Europe, with the Franco-German alliance seeking to sideline Britain. Der Spiegel has dubbed Britain the “sick Empire” in advance of today’s meeting between chancellor Merkel and prime minister Cameron. Other right-wing papers and members of her ruling party have stoked up old enmities between the two countries.

Merkel and French president Sarkozy want, it seems, to make Frankfurt and not London the pre-eminent financial centre in Europe. It is hard to see how that squares with the deepening crisis of the euro itself, with Spain and other countries facing unsustainable interest rates on new loans.

Traders are selling bonds (fixed-term loans) as fast as they can. No one wants to be holding Spanish, Italian or anyone else’s debt when the music stops. And stop it will, with

Terry Pratt of IG Markets remarking that Spain’s difficulties are “the latest blow to the common currency, which is now looking ever more moribund as each day passes”.

According to the Bank of England, UK banks do about half their lending outside Britain, with Europe accounting for about a third of the total. But it’s their ability to absorb large losses that is in the spotlight. Their exposure to France and Germany alone is equal to 130% of their core capital. At least one lender has Italian exposure equivalent to 54% of capital, according to the Financial Times.

And then there are indirect exposures which no one seems to be able to total up. A UK-based bank may have lent to an overseas hedge fund which in turn is tied up in Greek or Italian bonds. Hence the “war games”, with the FT reporting:

It is Friday night, after stock markets have closed across Europe, and there is some shocking news: Greece has pulled out of the euro. By the time markets reopen on Monday morning, UK banks must be prepared for the worst. How dangerous could this be for other eurozone governments and banks? What would it mean for customers? Investors? Would funding markets freeze instantly? These are some of the war-game scenarios UK bankers are acting out – often in real time over a weekend – as they plan for some grim possible consequences of the eurozone debt crisis.

A new credit crunch is well under way, with inter-bank lending crucial to sustaining the financial system, drying up. As in 2008, the fear is of lending to another institution and then finding they can’t pay it back. This only adds to growing liquidity problems and the UK authorities are apparently monitoring funding levels twice daily.

Not all the FT’s readers are sympathetic about the plight of the banks, with one writing: “Looks like the bank's bonus pools are finally under threat owing to the destruction of the real economy through excessive leverage, reckless mortgage lending based on fraud and deceit, financial speculation and looting. The sooner the banks are nationalised, bonus pools used to invest in the real economy and bank management put in jail the better.”

The question is, how do we achieve that goal? Ed Miliband, the Labour leader, has again committed his party to building a “responsible capitalism” and the parliamentary system is a proxy for corporate and financial power. While the bankers do doomsday planning, a strategy for a new political and economic democracy ought to be top of our agenda.

Paul Feldman

Communications editor

Unions should block sanctions against unemployed

Thousands of unemployed young people are working for supermarkets without pay for months on end, with the constant threat of losing their measly benefits if they leave, while others are on enforced “mandatory work activity” schemes.

The ConDems, building on New Labour’s regime of withholding benefits from the unemployed, have created a reserve army of young people simply to boost employers’ profits and cut public spending.

More than a million aged between 15-24 out of work. That is 20% of economically active people in that age group. Unemployment, which has been rising since 2007, is as high as in the early 1980s and now stands at 2.62m, the highest since 1994,

Of course that does not include many formerly self-employed, who wait a long time to qualify for benefits, people on disability benefits who are looking for but can’t find appropriate work, and women at home with small children prevented from finding work by soaring childcare costs. The real figure is closer to 4 million.

The unemployment figure includes 286,000 students looking for part-time work to get them through their studies. Some 80% of teachers surveyed earlier this year said they were encountering students in schools and colleges who did not get enough to eat, or to buy clothing.

Many good job and training schemes for young people have had their funding cut. So far the Coalition’s main contribution is a scheme where young people work for companies like Sainsbury, Poundland, Tesco for up to six weeks with no pay. It is meant to be voluntary, but if they even express a slight interest in the scheme, and then withdraw, they lose their miserable £53 a week job seekers allowance for up to six months.

It is suggested that some retailers are exploiting this scheme to get ready for the Christmas rush, instead of taking on temporary workers as they would normally. According to the Institute for Public Policy Research, employers are using government subsidies for apprenticeships to train people aged over 25 they would have hired anyway. Only 37,000 of 126,000 apprenticeships went to 16-24 year olds.

Under the new “mandatory work activity” scheme, young people are given no choice from the moment they sign on and can be sent to work for private firms or the voluntary sector for months on end. Lawyers say this is a modern form of slavery and are challenging it in the courts.

Brendan Barber of the Trades Union Congress says the Coalition must “stop the risk of losing a generation to unemployment and under-achievement by guaranteeing a job or high quality training to every young person out of work for six months”. Pathetic! What about: “The TUC will organise every unemployed worker into a mass movement to remove the Coalition government.” You won’t hear that any time soon!

Young people have done everything asked of them. The number without a qualification has decreased dramatically, and more and more make sacrifices to stay on at college or university. In 2004, 33% of 19-year-olds lacked a basic qualification; by 2010 that figure was down to 18%. Though almost half of young adults do not have a Level 2 qualification (such as GCSEs) at age 16, by the time they reach 21, most have remedied this and the proportion is down to one fifth.

Young people were the driving force of the movements that toppled regimes in Tunisia, Egypt and, before NATO intervention, Libya. They have everything to gain from political and social change and nothing to lose. With the economy heading for recession and more spending cuts on the way, it is clear that capitalism isn’t working and we should make it history. Offering young people the opportunity to join a people’s assemblies movement to transform society is the most important thing we can do.

In the meantime, the trade unions should instruct their Jobcentre Plus members to refuse to impose sanctions on young people looking for work, training and decent pay. Carrying out government orders which turn people into slaves is unacceptable.

Penny Cole

Spain's voters disenfranchised by markets

There can be only one winner in Sunday’s general election in Spain. And it won’t be the voters, many of whom are so disillusioned with the country’s political system that they seem set to stay at home in droves.

Even though the discredited Socialist Party (SP) looks likely to hand over the reins of state power to the right-wing People’s Party (PP), the financial markets are closing in. They know that the PP has no policies to tackle the country’s budget deficit or the growing debt crisis in the regions and is winning with anti-SP rhetoric.

So yesterday, the effective interest rate on Spanish government borrowing soared beyond 6% into what is considered the danger zone. Mariano Rajoy, the PP leader, will find himself in the firing line next Monday morning when Moody’s, Standard and Poor, Goldman Sachs and the other predatory operators in the financial markets move in.

In a mass sell-off of government bonds on Tuesday, investors’ fears spread beyond Italy and Spain to triple A-rated France, Austria, Finland and the Netherlands. Neil Williams, chief economist at UK fund manager Hermes, said “Markets are losing patience so they are going for the jugular, which is the core countries and not the periphery.”

In dealing with the crash of 2008 governments, central banks and global agencies added many trillions to the global accumulation of credit and debt, yet the growth the system needs to pay it off has not been forthcoming.

The “recovery” has now given way to a contraction. So the interest can never be paid, let alone the inflated capital, at least while forms of parliamentary democracy – however enfeebled – stand between the corporations, financial markets and living conditions of ordinary people. These must all be swept away in futile attempts to minimise the impact of the crash of 2011 on profits.

After a weekend of frenetic activity, two non-elected US trained economists have been appointed to spearhead the next round of assaults on the population of Europe. Mario Monti has been installed as replacement for the odious Berlusconi, and Lucas Papademos is the new prime minister of Greece, which includes anti-Semitic, far right LAOS – the Popular Orthodox Rally Party in its provisional government.

They’ll all be getting their instructions from the “Frankfurt group” which includes the International Monetary Fund, Germany’s Chancellor Angela Merkel, France’s President Nicolas Sarkozy, a bevy of European Union officials, with Barack Obama, USA and Hu Jintao, China’s President lurking threateningly in the background.

Every one of the now 7 billion occupants of the 200 or so states is directly and immediately affected by the unfolding of the interacting social, financial, economic, political and ecological crises of humanity and its planetary home. In Britain, youth unemployment has hit a record high of 1.016 million, as the overall jobless total rises to 2.62 million in the midst of a recession deepened by spending cuts.

The ruling classes everywhere fear any challenge to their rule, concerned that they might inspire others into revolt. Peaceful protests claiming the authority of the 99% find themselves confronting the forces of the state in its many forms. The brutal clearance of Zucotti Park won’t be the last to be seen of Occupy Wall Street. The Corporation of London has restarted legal proceedings against Occupy LSX, and its maturing programme of discussions on the economy, democracy and the state.

Amongst the most recent, but shortest-lived of the occupations, Cardiff, delivered one of the clearest objectives so far: “The monetary market system itself must be replaced with a resource-based economic model where everyone’s needs are provided for free.”

The collapse of the eurozone, the appearance of mass unemployment, the attacks on pensions, services and welfare, demands the alternative called for in Cardiff. On November 30, millions will strike in Britain against the government’s attack on public sector pension rights. To maintain the momentum, trade unionists should seize the initiative and create people’s assemblies in every community to carry the struggle forward towards a new political and economic democracy.

Gerry Gold

Economics editor

The invasion of the commons

One of the transformations in London over recent decades has been the opening out of the Thames embankments to the public. You can now meander from Vauxhall Bridge in the west to beyond Tower Bridge in the east, along the city’s historic riverside.

Stunning views of the Houses of Parliament, St Paul’s, the Tower of London, Tower Bridge and Tate Modern - are unobstructed by traffic. Unlike Rome and Venice, where architectural gems like the Spanish Steps and the Doge’s Palace are often spoiled by garish corporate logos, there are no jarring advertising hoarding. This entirely free pleasure in Europe’s largest city is one of the success stories of Ken Livingstone’s eight-year mayoral stint.

But now, the process is going into reverse. London’s bridges and its squares and open spaces are being appropriated and privatised. And increasingly, under the false flag of the 2012 Olympic Games, vast schemes are being devised which will subvert past gains.

So much so that architectural writer Rowan Moore has coined the words “publoid, publate, privlid” to describe the sinister process by which corporate owners convert areas once open to the public into “managed and controlled spaces with uniformed wardens”.

This is what happened in Broadgate, Canary Wharf, City Hall and Paternoster Square. “Ultimate control”, as Moore notes,“ is in the hands of private landowners”.

That’s why the protesters who sought to occupy the space outside the London stock exchange found all entrances to Paternoster Square sealed off by police cordons and they ended up at the foot of St Paul’s at the mercy of the church fathers. This was despite the redevelopment of the square being billed as a “public space”.

Now, a £50 million proposal by the Singaporean asset-management company Venus for a floating park to run from the Millennium Bridge to Tower Bridge is currently under scrutiny. Under the shiny corporate-speak it is the latest and insidious move of a widespread hybrid beast that has reared its head in the last decade. This is “the pseudo-public space, in which the City of London and its satellites are world leaders”, as Moore notes.

English Heritage and the Commission for Architecture and the Built Environment are voicing disquiet. English Heritage says the view of St Paul’s would be affected by “flashy and corporate” features of what is fundamentally “a gigantic hospitality suite with a fairly nice walkway threaded through it”.

And it is not only the high property value City part of the Thames that is being threatened. Further down river in Stratford, locals are worried about a plan for an “experiential, hospitality and entertainment” venue. Former accountant Lance Forman hopes to bring 8,000 visitors a day to a tiny island on the Thames, day and night. Olympic corporate guests will be comfy on a gigantic sofa and watch the games on a 30x 7 metre screen.

Like the Olympics themselves, this proposal is promoted as “building a lasting legacy for the area”. But those who live and work there say it is a disaster waiting to happen.

The invasion of the “commons” is not a new process and not unique to London. The turbo-charged hey-day of globalisation saw the entire planet subjected to this process. With the growing resistance to the crisis, to the banks and corporate power, the state is showing the mailed fist in favour of the owners of private property. Out go security guards, in come riot police with tasers, tear gas, pepper spray and batons.

The clearing out of occupiers in New York’s Zucotti Park and the arrest of several St Paul’s activists outside the Guildhall in the last 24 hours makes it crystal clear that not only the right to protest, but simply to live, breathe and look at the world around you in a relatively free way is rapidly becoming a thing of the past.

Corinna Lotz

A World to Win secretary

Goldman Sachs adds Italy and Greece to its portfolio

When trader Alessio Rastani told the BBC that "governments don't rule the world, Goldman Sachs rules the world", jaws dropped in the news room at his brazen candour. Seven weeks later, Rastani is looking more right than ever.

The global investment bank’s advisors have in the past week taken control of the Italian and Greek governments, replacing elected administrations with faceless economists, academics and bureaucrats.

These events are nothing less than corporate-driven coups in the heart of Europe, through which the financial markets have demanded and got the heads of government on a platter.

George Papandreou and Silvio Berlusconi were what they were, politically speaking. Their mistake was to try and ignore the European Central Bank (ECB), International Monetary Fund (IMF) and the leading lights in the European Union, Germany and France, in dealing with their respective debt crises.

So they had to go.

In Italy, Mario Monti, former EU competition commissioner and advisor to Goldman Sachs for the last six years, was appointed prime minister by the ageing president Giorgio Napolitano, who undoubtedly got his marching orders from somewhere in the Brussels region. Monti is planning a cabinet entirely made up of unelected appointees.

In Greece, prime minister Papandreou was ousted by Lucas Papademos, yet another advisor to Goldman Sachs and former vice-president of the ECB. Both men are going to try and impose savage cuts in living standards to keep the international loan sharks – aka the bond market – at bay, temporarily.

Normally, when governments collapse, a date is set for a general election. But this right is also being denied the Greeks and Italians. Chancellor Merkel and President Sarkozy, together with the markets, have declared that elections will take too long and may not even lead to a conclusive outcome. As for Papandreou’s plan for a referendum, don’t even go there.

Just in case you think this process doesn’t apply to Britain, let’s not forget that weekend in May 2010 after the general election here produced a stalemate. The Tories and Lib Dems were literally propelled into a shotgun marriage by the cabinet secretary, Gus O’Donnell.

He made it perfectly clear that the financial markets would not tolerate weeks of political instability in Britain. The ConDem coalition – a government without a mandate and for which no one voted - was the result.

The financial markets have effectively “bought” capitalist democracy, turned it into a commodity. They demanded and got deregulation from the politicians. And when they went bust, they demanded and got bail-outs. When governments have proved incapable of imposing the debt crisis on their people, an out-and-out takeover is the result in Athens and Rome.

So the democratic achievements of past generations in terms of the right to vote and influence course of events through parties committed to reform are negated. There is even less meaning to voting than ever before, as the people of Spain will discover next Sunday.

The corporate coups should drive us to renew the struggle for democracy. The global occupation movement, the revolutions in North Africa and the real democracy movement in Spain point the way forward.

As the present political system is ossified, alienated and generally in someone else’s pockets, then it follows that entirely new forms of democracy are needed. The assemblies that have been a feature of 2011’s uprisings are an experiment in democracy that actually works.

Democracy here is not an add-on, to obscure some other power relations but a conscious effort to do things better. The general assemblies have the potential to go further than the spaces they currently occupy. People’s Assemblies can become not just the voice but also the power of the silenced, disenfranchised 99%

They could reach out to neighbourhoods and communities and offer new forms of representation, participation and direct democracy. A network of assemblies could begin to draw up strategies and plans for a democratic alternative to the power and rule of the market capitalist economy.

Utopian? Yes. Possible? Undoubtedly. Necessary? Absolutely!

Paul Feldman
Communications editor

The great 'deception' that killed millions

Perhaps it is fitting on the day that the slaughter of World War One finally ended, the Treasury is said to be preparing for “economic Armageddon”.

Vince Cable’s admission refers to the consequences for Britain of a disorderly (it can’t be orderly) break-up of the euro as a currency and the resultant depression that will sweep not just Europe but the global economy.

But there’s no hiding the connection with the world wars of the 20^th century that cost tens of millions their lives. They were essentially the product of inter-imperialist conflict over trade, empire and markets.

Let no-one claim otherwise, although the political establishment tries might and main to do so every November when the official line is that millions went off to fight “for their country” in 1914.

Wearing a poppy becomes almost compulsory in official circles. Everyone on TV wears one. Those called in for an interview are asked to wear one, whether they want to or not. Of course, it is not wrong to honour the dead but we have to cut through the hypocrisy.

What is never up for discussion is that within months, soldiers on both sides realised that they had been trapped, even duped into a conflict from which they could not escape. A war which was not of their making exacted an intolerable price.

With the first global conflict unresolved, another one arose out of the break-down of the capitalist economy in Europe and the United States. And less than 70 years after its conclusion, with the mass murder of Japanese civilians, the storm clouds are gathering again.

The European Union, which was designed in part to prevent a repeat of 20^th century wars by bringing nations together, is in disarray. Governments in two member states were brought down this week by the economic crisis.

In Greece, the unelected former vice-president of the European Central Bank is to become prime minister of a national government. In Italy, the financial markets are demanding a government of technocrats. In both countries, early general elections were ruled out by the financial markets because they would take too long! Democratic procedures are now considered dispensable.

Now the talk is of a core of richer countries like Germany and France ganging up to exclude the poorer economies within the EU as well as Britain. So the seeds for conflict of all kinds are being sown. A system driven by the need to access and grow markets has no other direction to travel.

So perhaps the best way to mark armistice day is with the letter that the great war poet Siegfried Sassoon wrote to his commanding officer in July 1917, declining to return to duty after recovering from his wounds:

I am making this statement as an act of wilful defiance of military authority because I believe that the war is being deliberately prolonged by those who have the power to end it. I am a soldier, convinced that I am acting on behalf of soldiers. I believe that the war upon which I entered as a war of defence and liberation has now become a war of aggression and conquest. I believe that the purposes for which I and my fellow soldiers entered upon this war should have been so clearly stated as to have made it impossible to change them and that had this been done the objects which actuated us would now be attainable by negotiation.

I have seen and endured the sufferings of the troops and I can no longer be a party to prolonging these sufferings for ends which I believe to be evil and unjust. I am not protesting against the conduct of the war, but against the political errors and insincerities for which the fighting men are being sacrificed.

On behalf of those who are suffering now, I make this protest against the deception which is being practised upon them; also I believe it may help to destroy the callous complacency with which the majority of those at home regard the continuance of agonies which they do not share and which they have not enough imagination to realise.

Paul Feldman

Communications editor

Triple whammy of warming planet, high prices and energy insecurity

In the most comprehensive study yet of the global energy market, the International Energy Authority (IEA) has warned that within five years the planet will be on course to breach the limit of 2ºC of global warming which is said to be a “safe” level.

Of course, it is just the only level that supine corporate-serving politicians would agree at the UN's climate talks. Millions of people are already feeling the effects of global warming - ferocious rainfall causing floods in Thailand, Sindh province in Pakistan, the United States, Spain and Italy – and at the same time widespread drought. With 2ºC higher temperatures, such extreme weather will be commonplace, along with rising sea levels.

Over the last decade most of the world's growing energy needs have been met by burning coal; now not only China but also the United States is committed to building new coal power stations. The IEA projection shows that keeping to this course, the use of coal will increase by 65% by 2035.

Four-fifths of the CO2 emissions that would keep to the 2ºC limit are already locked in. Even if governments deliver on their weak, non-binding, greenwash targets, the cumulative CO2 emissions over the next 25 years will likely create a long-term average temperature rise of 3.5°C. And if, as seems likely, they fail to meet their targets, we are looking at a catastrophic 6ºC rise.

"As each year passes without clear signals to drive investment in clean energy, the ‘lock-in’ of high-carbon infrastructure is making it harder and more expensive to meet our energy security and climate goals," said Fatih Birol, IEA chief economist.

This week's BBC Panorama programme, made a crude attempt to blame soaring energy bills on the government's modest (to put it politely) efforts to promote alternative energy from wind, tide and solar.

The programme was a complete fraud. According to Ofgem, recent fuel price increases, which have left hundreds of thousands in fuel poverty, are due to the energy companies passing wholesale market price increases on to consumers, whilst never reducing them when the market falls.

Panorama tried to argue that because renewables require investment, and because the government is making some of that investment, consumers are being hit by subsidies.

But why are subsidies needed? Surely it is in the nature of an industry that if changes to new technology are required, these are paid for by investment by the companies that will profit in the long term.

Not on your life! In reality, the big six energy companies in Britain, and others throughout the world, are on an investment strike. They will go on dragging profits out of old-style power stations as long as they can, adapting them to dirtier and dirtier fossil fuels and they will never put a penny into developing the alternatives.

Their goal is NOT a clean, secure energy supply - it is profit, and that's a fact!

And where there is an increase in world market prices for gas and oil - and these will be ever-steeper as fossil fuels become scarcer and harder to extract - the consumer must pay.

We are left with a triple whammy of a warming planet, high energy prices and growing energy insecurity.

"Without a bold change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system," said Birol, adding that there is still time to act but the window of opportunity is closing.

The only action open to us is to achieve such a transformation is to take energy generation and supply out of private ownership and place it into a not-for-profit social trust, with raw materials becoming part of a new global commons.

A democratic network of People's Assemblies could then agree, with the help of experts and the collectively-owned power generating firms, a transitional plan to reduce, and then replace, fossil fuels. That is the only way to cut emissions, end fuel poverty and ensure that the lights stay on.

Penny Cole

Environment editor

Pay to work and cheap interns future for young workers

During the 40-or so months since the crash of 2008 a new wave of caring, sharing philanthropy has risen slowly to the surface, culminating in the Bellagio “summit” now under way on Lake Como.

The summit’s origins are traceable back to Standard Oil’s profits in the 19th century, so it’s hardly a new idea. But it seems it’s time has come, at least for those extremely rich entrepreneurs trying big time to salve their consciences, and save their skins whilst finding a new way forward for the capitalist system.

Bill Gates, the one individual with the highest public profile, made his mark with his wife by establishing the Bill and Melissa Gates Foundation, and in 2010 launchin “the Giving Pledge”. This encourages the world’s richest to give much of their accumulated wealth to good causes. And it’s all of a piece with the turn to self-reliant, “resilient” communities.

Their good work is clearly a big part of the inspiration behind the Big Society of David Cameron (who yesterday refuted the idea put to him by a parliamentary committee that the occupation of St Paul’s was an example of communities taking on more responsibility).

As economic growth gives way to contraction and austerity bites, the softer edge of services that can no longer be afforded like libraries, luncheon clubs for the elderly and infirm, rural shops and post offices, are being offered to those that value them to run them for nothing as the charitable acts of philanthropic volunteers.

But with the crisis biting ever harder, things are moving on apace. Capitalist society is at the crossroads. Not only are (some of) the already rich giving away their money (well, at least some of it), but those who are still hoping to get rich are breaking the wage labour contract or inverting the direction of value that traverses it.

For some years, young people have been first encouraged, then more or less obliged to seek “work experience”, either unpaid or at the minimum wage, in order to make themselves attractive in the jobs market.

More recently the Coalition has been promoting the wider use of internships as part of its drive to improve social mobility, but government lawyers have warned that growing numbers of companies may be breaking the law, turning to interns to carry out work that lasts far longer than traditional work experience placements, yet refusing to pay them.

Entrepreneurs have seized upon young workers as a source of low cost and enthusiastic labour. Steve Lowy, founder of three-star hotel brand Umi, has used 100 interns since he set up his business in 2007, from one week slots for GCSE pupils on work experience to year-long placements for hospitality students.

Of the arts internships advertised on the Department for Business Innovation and Skills-sponsored website, 92% were unpaid. Almost 80% of advertised fashion internships were unpaid, and 76% of PR internships were unpaid. Half of the media internships were unpaid.

According to Chartered Institute of Personnel figures, there are between 50,000 and 70,000 internships a year. Between 10,000 and 15,000 of these are unpaid. And in the largest online UK internship survey to date, carried out by Interns Anonymous, out of 594 respondents 87% said they were paid below the national minimum wage.

And now it’s becoming a case of pay to work. Selling internships has become a business in itself. The Tories auctioned off internships at City hedge funds at its Black and White ball in February to raise thousands of pounds for party coffers. Start-up company Etsio has made selling internships its business model. They charge interns up to £100 a day to get work experience in small, specialised businesses.

Nice work if your parents can pay to get it.

Gerry Gold

Economics editor

Bond dealers put a price on democracy

The financial markets that have forced out the Greek government and are on the verge of bringing down Italy’s, now instinctively prefer to sideline what is left of the democratic process if it means they have a better chance of getting their money back.

Not only that, they would rather have a non-government of so-called technocrats in place of politicians in some cobbled together coalition. So whatever you think of Berlusconi or Papandreou's wretched politics, their impending demise is a sinister development with echoes of past European history.

Politics, even of the bourgeois variety, increasingly stands in the way of capital’s interests because it is a time-consuming process. Putting together governments of national unity, agreeing a strategy for spending cuts, holding referenda – all this takes too long when time is not on capitalism’s side.

So Papandreou’s call for a general election in Greece is off the agenda. It would only result in more uncertainty, the markets declared. France and Germany’s leaders agreed and so that was that. A national government without a mandate will take over in Greece.

In Italy, Reuters, the financial sector’s news agency, writes that Berlusconi's departure would offer "no speedy solution to a debt crisis threatening the whole euro zone”.

A “worst-case scenario” could see weeks or months of instability and continued “reform inertia”. The answer? “Markets want an unelected technocrat government appointed to pass unpopular reforms needed to improve growth potential in one the world's most chronically sluggish economies.”

So that’s alright then. If the markets want it – and today they were charging an unsustainable 6.73% to lend to Italy – who are ordinary people to deny them their wish? Elections in January? Far too long to wait. And what would they resolve? Nothing!

In one sense, of course, the markets are right. Elections can’t solve the crisis. Debt reduction requires so much pain through spending cuts, unemployment, lower living standards and rising prices that it can’t be achieved with popular consent.

Which means, logically, that some kind of authoritarian rule, a 21st century European dictatorship, is necessary. Dispensing with politicians, even if they are as obnoxious as Papandreou and Berlusconi, is the first step on a slippery road.

Even the right-wing press is getting the frighteners. Janet Daley, the former left-winger turned commentator for the Daily Telegraph, has noted: “Last week, the European Union effectively undermined the democratically elected government of one member state and put another one [Italy’s] on notice.”

In line with Tory anti-EU sentiment, she blames the “Eurocracy” led by Germany and France for denying Greece a referendum and telling Berlusconi that his time is up, adding:

“All those quaint assumptions about the legitimacy of government coming from the consent of the governed must be cashed in for the ‘economic stability’ that the rules of euro membership will provide.”

Interestingly she contrasts the achievements of the Arab Spring with the decline of democracy in the West, “the wilful dismantling of its political inheritance” with the loss of the “right to choose who governs you”.

While her target in the shape of the EU bureaucracy rather than financial markets and capitalism, smacks of small-time nationalism, Daley is perceptive enough to acknowledge that an historical turning point has arrived.

Capitalism and democracy are not natural bedfellows but in conflict with one another. At times of emergency – and that’s what we are in now – the niceties of elections, parliaments etc come under strain. The next step, to outright dictatorship, is a massive one to take. But don’t for one moment think that the ruling elites are not capable of going down that road.

Paul Feldman

Communications editor

Their morals and ours

Teaching a fish to ride a bicycle. That’s how even a Daily Telegraph reader describes the pipedream of making the City of London, bankers et al act in some kind of “ethical” way.

And that is a lot more down to earth than Labour leader Ed Miliband, who says that the campaigners at St Paul’s and Finsbury Square reflect “a crisis of concern for millions of people about the biggest issue of our time: the gap between their values and the way our country is run”.

In a patronising and devious way, Miliband implies that the protesters have nothing better to do than camp outside St Paul’s. He opines that the problem is “a system of irresponsible, predatory capitalism based on the short term, rather than productive, responsible behaviour which benefits business and most people in the long term”.

Using the word “values” no fewer than nine times, he calls for “big changes in the way our country works”. But in case anyone is deluded into thinking that Labour has suddenly become hostile to capitalism, he proposes – sharp intake of breath – to “tell the top CEOs that if they are unwilling to justify their rewards – they will not get it”.

So, for the Labour leader, the problem is NOT that there is a huge divide in society between a tiny minority of super rich and the rest of us. The rich have just not worked hard enough to prove that “they are worth it”!

Miliband is simply trying to cash in on the widespread support for the occupations in the City of London and around the world – and to channel it into the safe vehicle of Labour electoral politics. In his dreams!

Along with the CEOs and some bankers, many of whom have admitted they are overpaid, he is worried that things are spinning out of control, ideologically speaking.

The conflicting views amongst those who are supposed to look after morals and values are deepening by the day. On Saturday former St Paul’s Canon Giles Fraser, who resigned over the cathedral’s lack of support for the occupation, said:

"St Paul's Cathedral is built on a deep theological fault line. On the one hand it's set within the boiler room of global capitalism, and on the other it proclaims a theological story that has some pretty fierce things to say about money and wealth.” He was joined by the Archbishop of York of York in denouncing the super rich and unbridled greed.

The history of capitalism in Britain has seen the established church, politicians and the heads of finance and industry working together to keep the lid on discontent and maintain at least a semblance of control over things.

And that is why the church and the City are working might and main to “bridge the differences between the protesters and the City”, as Ken Costa, former chair of Lazards International, puts it.

Costa claims that “the market economy has shifted from its moral foundations with disastrous consequences. I cannot recall when public feeling worldwide has run so high.”

Costa has been asked to work on a “form of ethical capitalism”. He has come up with a far more shocking proposal than Miliband could ever align himself with.

The ex-banker says that “maximising shareholder value” cannot continue to be the sole criteria or object for all companies.

But making profits is the very basis – the bottom line - of capitalism as an economic system. These are the system’s actual “moral foundations”, its heart. A kinder, more caring, not-for-profit ethical capitalism has never existed – and never can.

Yes we need a moral compass and a set of values. But we should reject as hypocritical and compromised those the ruling elites constantly try to impose on us. An alternative set of values and a progressive moral outlook is to be found in the growing numbers of people around the world who seek a democratic future free from corporate power. It really is a case of their morals and ours.

Corinna Lotz

A World to Win secretary