Tuesday, January 31, 2012

Whatever happens on bonuses, we lose out

For all the excitement generated over the reluctant decision by Stephen Hester, the chief executive of the Royal Bank of Scotland, to decline his near £1 million bonus, this is not a zero sum game.

Hester forgoing his bonus, which would have been paid in shares, does not mean, for example, that as a result there is more money in the public purse to offset against the ConDem’s austerity cuts programme.

Nor does it help hard-pressed RBS borrowers – from small businesses to home owners with mortgages. They will not be treated any more sympathetically by the bank when they struggle to meet repayments.

Will it prevent RBS from punishing hard-pressed workers struggling to make ends meet when they accidentally drift into the overdraft zone? I don’t think so.

Paradoxically, it seems that the shares, if they had been cashed in over the next couple of years, would have produced a tax take of around £500,000 depending on their market value at the time.

In other words, if Hester hadn’t taken home more than £11m in shares and cash since being brought in by New Labour to run the bailed-out bank in October 2008 (with a golden hello of 10.4 million shares), we in the shape of the 99%, would not be better off by the same amount.

As RBS bankers outside the boardroom form an orderly queue to share in a bonus pool worth an estimated £500 million in the next month or so, some are waiting to see how many shares they get under a scheme approved in 2009, when Gordon Brown was prime minister. John Hourican, head of RBS’s investment bank, could receive up to 21.3m shares in April – worth around £5m at last night's price – and options on another 7.4m shares.

What all this demonstrates is not only that the bankers hold the aces – there is clear evidence that the RBS board threatened to resign if the Treasury had tried to block Hester’s bonus – but that they also have absolute control over resources.

While the financial system continues to be run for profit to benefit shareholders and senior staff, no good can come of it. Quite the reverse, as we have discovered to our cost since the meltdown began in 2007. The state’s resources – aka taxpayers’ money - are despatched to bail out the system without delay so that things can stay as they are. The sums committed are then added to the deficit and result in more cuts.

All the remedies suggested by either the government or Labour leader Ed Miliband are designed to maintain the status quo of capitalist-owned banks that serve their own interest. Miliband, of course, was a member of a government that gloried the achievements of the bankers and financed large amounts of public spending from tax revenues from the financial sector.

Ed Balls, now shadow chancellor but then a Treasury minister, speaking to business figures in Hong Kong in 2006, remarked: “The UK’s financial tradition as a free, fair and open global market has resulted in tremendous growth in London’s international financial markets in the past decade – over-the-counter derivatives turnover up by 770%, foreign equities turnover up by 260%, cross-border bank lending up by 160% and foreign exchange turnover up by over 60%.”

Miliband is not opposed to bonuses – so long as they are “merited”! As for a one-off tax on bonuses – which Labour actually introduced in 2009 – that is hardly going to change what goes on.

As one comment on the Financial Times website noted: “What difference does Hester's bonus make to the billions already allocated to the rest of the banking community. Given the trillion the banks are now borrowing from the ECB [European Central Bank], I can only conclude that the banking community remains impervious to their financial reality. I wish someone would give me a bonus for defrauding my customers and still managing to go bankrupt!”

The real issue is about who owns and controls the country’s financial resources and what they are used for. Massive bonuses are a symptom of the problem – but not the problem itself.

Paul Feldman
Communications editor

Monday, January 30, 2012

A Britain divided by class and wealth

Sometimes it takes a comedian to tell it as it is. Rory Bremner just about summed up the real state of affairs as he mused in the columns of the Financial Times.

“I heard of a country where they are capping benefit payments and charging single parents for access to the Child Support Agency," observes. "And, there is also a country which plans to spend around £100bn on transport and the Olympics. I wonder, are these two countries related?”

He could have also pointed to the just-under £1m bonus payment offered to largely-state owned Royal Bank of Scotland head Stephen Hester. And while Hester has now turned it down, he won’t be short of money. He still has his salary of £1.2 million to look forward to. So he’s not likely to have to give up his chalet in Verbier, Switzerland or his 350-acre estate in Oxfordshire.

Bremner is right. There is the Britain inhabited by bankers, financiers, hedge fund owners and grandees of all kinds – and there is the rest. And as the dust settles, the only bleeping Labour can summon up is to claim credit for adding its voice to the complaints.

The reality is that the economy is deteriorating and that the issue of bankers’ bonuses will pale in comparison to what is coming up. Britain’s debt has now reached the £1 trillion and the UK economy shrank by 0.2 % at the end of 2011. Unemployment is rising fast, with one million 16-24 year-olds (22%) now out of work in the UK.

School leavers, students and other youth in the UK are joining the 23 million unemployed in the European Union, and some 200 million world wide. Spain has 50% youth unemployment while in the United States the figure stands at 23 %.

At the World Economic Forum meeting which has just ended in Davos, Switzerland, economic elites described youth unemployment as “a cancer in society”. The world is “sitting on a social and economic time bomb.... not a crisis but a disaster”, they said.

They are right. As around 40 million young people globally enter the workforce each year, it doesn’t take rocket science to work out that massive, long-term unemployment amongst young people will have explosive political results. Most people are aware knows that it was the lack of a real future – combined with years of political repression - which sparked the Arab Spring and the downfall of tyrants in Tunisia, Egypt and elsewhere during 2011. The lack of a future for an entire generation, globally is what is at stake.

For all their wealth and power, the bankers, company bosses and politicians, the truth is that the so-called masters of the global capitalist economy remain at a loss and are deeply divided. While the IMF is calls for austerity, financier George Soros said that the fiscal cuts, which Germany supports, could even lead to a "lost decade" of economic stagnation in Europe.

"This German insistence on austerity could destroy the European Union," he said. "This is reality, this is the harsh reality that we need to face. It is not written in stone, the future is not predetermined. We determine the future, so it would be well within the possibilities of the authorities to change it."

We have to agree, at least partly, with Soros. Austerity and cuts are not the answer and we can determine the future (albeit in a different way to what Soros imagines would happen if policy makers followed his ideas for reviving capitalism).

The top 1% rely on the rest to remain in their places and accept that the system is what it is and can never be transformed in a fundamental way. So developing an alternative outlook to that which views Britain’s class-based, class-divided society as impregnable is absolutely vital.

Corinna Lotz
A World to Win secretary

Friday, January 27, 2012

Turn anger over RBS bonus into action

The palpable anger over the £963,000 bonus in shares awarded to state-owned Royal Bank of Scotland chief executive Stephen Hester has to turn into some direct political and industrial action if society is to see an end to this kind of obscenity.

Hester is effectively a public servant, as 81% of the shares are owned by the state following a bail-out of the bank by the previous New Labour government. Since he took over as CEO in November 2008, RBS has sacked 33,000 staff.

The aim, as always with a capitalist concern, was to shed staff in a bid to return the bank to profitability. This Hester has done with the blessing of both the ConDem coalition and the Brown government that preceded it.

The mistake some people have made is to think that because the state owns a bank or two they would be run along different lines, perhaps more ethically or fairly. But the state nationalised the banks to prevent a collapse of the entire financial system – not to set up an alternative banking network.

The banks were allowed, nay encouraged, to continue along their usual profit-driven path. Recently-sold Northern Rock, for example, went about repossessing people who were behind with their mortgages and calling in loans while state owned.

As one of hundreds of angry comments on the BBC news website noted: “This is interesting, we own 81% of RBS and still the government and board of this bank show nothing but contempt for the general public and small business. RBS are about to repossess my brothers house for approx the same amount and close his building company putting people out of work and on the dole. Can anyone explain this madness?”

What is “madness” to some is sanity to others who hold the reins of a state that to all intents and purposes is a plaything of economic and financial elites. They call the shots – and not the government. Or as another sharp comment put it: “It's another sign the politicians aren't running the country, or at least not for the people. Their bonus is the cushy job their friends in finance offer them when they quit parliament.”

Robert Peston, the BBC commentator who broke the Northern Rock debacle, says he was “reliably told” that had the government blocked Hester’s bonus, it would have triggered mass resignation from the RBS board and the CEO’s departure. This financial blackmail clearly worked. Only a junior LibDem minister has demanded that Hester rejects the bonus – elsewhere there is silence.
So there you have it – the state is an extended arm of business. That has been the case since the modern state was formed in the early 19th century to facilitate the development of capitalism in Britain. For a period, this role was disguised by consensus politics, a welfare state, full employment and trade union rights.

The globalisation process produced transnational corporations and global financial institutions that more openly wagged the tail of the state. One consequence is that large numbers of people believe that traditional politics is corrupt, unrepresentative, undemocratic and a waste of time.

They are right. The state needs deconstructing and rebuilding with people’s assemblies and the like to create a real, functioning democracy.

Trade union leaders have reacted with outrage at the bonus for Hester, whose basic salary is £1.2 million a year. David Fleming, the Unite national officer, said: "What planet does Stephen Hester and his banking chums live on? Taking almost £1m from taxpayers' pockets as a bonus is utterly disgusting and offensive to every working person across the country.” Paul Kenny, the general secretary of the GMB union, said: "A bonus of nearly a million pounds looks to ordinary people like he has won the lottery – with a ticket they paid for.”

Public sector workers, by contrast, are facing a pay cut as a result of the government’s 1% pay limit (backed by Labour). If the union leaders are to be taken seriously about their desire to remedy gross inequality, they ought to be organising indefinite strikes against the pay limit (and pension cuts) with the aim of bringing down the ConDems. Otherwise it’s all hot air.

Paul Feldman
Communications editor

Thursday, January 26, 2012

'No' to war on Iran

With evidence accumulating that Iran is not actually building a nuclear weapon, the sanctions and oil embargo imposed by the United States and Europe looks increasingly like the provocation that it is.

Behind the rhetoric, all sorts of interests are involved, political and economic, many of them connected to divisions emerging in the wake of a global recession that worsens by the day.

America, for example, does not used oil imported from Iran but the rising economic power of China does. So Washington will undoubtedly use the embargo to exert pressure on Beijing amidst a brewing trade and currency war.

President Obama is seeking re-election with the country’s cities, towns and rural communities enduring mass unemployment, homelessness, food stamps and poverty. Talking tough against Tehran is a useful diversion while brushing up Obama’s image as a man prepared to use the country’s military muscle.

Throw in the wild card of a weak Israeli government (which has fallen out with Obama) facing waves of social discontent and looking for any excuse to attack Iran, the danger signs are there. A miscalculation by either side could easily lead a full-scale war.

What you won’t find widely reported is the fact that intelligence and military agencies in the US and Israel don’t believe that Iran has made a decision to build a nuclear weapon.

Ray McGovern, retired CIA analyst and co-founder, Veteran Intelligence Professionals for Sanity, says: “In recent days, that judgment has been expressed by high-profile figures in the defence establishments of the two countries – U.S. Defence Secretary Leon Panetta and Israel’s Defence Minister Ehud Barak.” He gives chapter and verse to back up his case. It is also a view shared by the Institute for Science and International Security.

But McGovern is concerned that the New York Times, which misled the world in the run-up to the invasion of Iraq, is playing a similar role: “In this up-is-down world, America’s newspaper of record won’t even report accurately what Israel (or the CIA) thinks on this important issue, if that goes against the alarmist conventional wisdom that the neocons favour.”

He adds: “If Iran is not working on building a nuclear bomb, then the threats of pre-emptive war are not only unjustified, they could be exactly the motivation for Iran to decide that it does need a nuclear bomb to protect itself and its people.”

There is rhetoric on both sides. Iran doesn’t have the military capability to shut the Strait of Hormuz, as it has threatened. Its navy is made up of a handful of small ships and would be obliterated within minutes of a confrontation with the American fleet on standby in the region.

The Islamic government is facing real economic difficulties as a result of the sanctions already in force. Unemployment and inflation have soared in recent months, while the currency, the Iranian rial, has lost 40% of its value against the US dollar within a year.
A huge black market is dominated by the Revolutionary Guards, who used wanton violence in the crackdown on street protests over the last couple of years.

Iran is surrounded by nuclear weapons in the shape of China, India, Pakistan and the American fleet. And, of course, Israel. The hypocrisy in the official denials that the Israelis have an arsenal of nuclear weapons is overwhelming. If all this was about the proliferation of nuclear weapons, where are the sanctions against Israel?

Mossad, Israel’s spy agency, is undoubtedly behind the murder of Iranian nuclear scientists over the past year. And prime minister Netanyahu doesn’t give a fig for Obama’s re-election prospects and could defy Washington with a pre-emptive strike this year.

In the end, the Iranians have a right to defend themselves. If nuclear weapons are a deterrent, and Israel has them, it is natural Iran should want one. The Iranian regime is reactionary and oppressive but is not an imperialist power. That’s why we have to say, no any attack on Iran by the US, Israel, Britain and France.

Paul Feldman
Communications editor

Wednesday, January 25, 2012

UK heads for recession as '1930s moment' nears

Greek debt is but one black hole among many in the eurozone crisis which threatens to tip the world into a ‘1930’s moment’ according to IMF managing director Christine Lagarde. But the problems facing global capitalism are far deeper.

Even Lagarde had to acknowledge that there is “little margin for manoeuvre” and that the real problem is "America's debt and deficit - the lack of a medium-term plan to reduce it”. Even that doesn’t begin to get to the heart of the matter.

Only yesterday the worst-case expectation was that the UK’s Gross Domestic Product – the key measure of growth - fell by 0.1% between October and December. But today’s official figure from the Office for National Statistics reveals that the UK economy actually shrank by 0.2% in the last quarter of 2011, and is heading for recession.

Accumulated UK government debt broke through the £1 trillion mark as a dual consequence of falling tax revenues, continued support for the financial sector and higher welfare bills as a result of soaring unemployment.

Despite the ConDem’s stated intention to reduce the country’s dependence on debt, its combined corporate, public and household debt has increased to 507% of GDP and the country remains where it was in the league table of the richer nations when the crisis broke in 2007/8 – right at the top.

Despite all the evidence, there are some like governor of the Bank of England Mervyn King, who try to present even the darkest of messages in a glowing halo of hope for the future of the capitalist society.

He said: “All crises come to an end, and businesses will find ways to trade with each other and meet the needs of consumers whatever the transitional problems posed by deleveraging.” Of how and why this might happen he gave no sign, making his message rather mystical in content.

Oliver Blanchard, the International Monetary Fund’s chief economist also tried to package his warning that Europe's debt crisis could tip the world economy into recession with the faintest hint of a rosy future "With the right set of measures, the worst can definitively be avoided and the recovery can be put back on track," he said. "These measures can be taken, need to be taken, and need to be taken urgently."

Only the first indications of the impact of these ‘measures’ have been seen so far in the millions of dispossessed American families, and hundreds of millions thrown out of their jobs worldwide.

But there are some who are, however reluctantly, coming to the conclusion that the game is up. In a wide-ranging article inspired by the Financial Times ‘capitalism in crisis’ series, its senior commentator Martin Wolf reviews the defining characteristics of civilisation.

Taking in the insolubility of the crisis of extreme financial instability, the prospect of a global economic collapse, the impact of humanity on the planet, and the role of leadership, he observes that states alone are now unable to supply the ‘public goods’ of education, health, control of crime and pollution.

“Ours is an ever more global civilisation that demands the provision of a wide range of public goods. The states on which humanity depends to provide these goods, from security to management of climate, are unpopular, overstretched and at odds. We need to think about how to manage such a world. It is going to take extraordinary creativity.”

Wolf doesn’t offer a solution, because the only ones available within the framework of capitalist civilisation are too brutal and unacceptable to liberal thinkers like him.

It is time to open a new era, based upon co-operation in a democratically-controlled, ecologically restorative system of production and distribution designed to satisfy the needs of the 99%.

Gerry Gold
Economics editor

Tuesday, January 24, 2012

Israel stands accused of child 'torture'

Imagine a child arrested and taken from the family home by heavily armed soldiers in the middle of the night. Bound with plastic ties and blindfolded, the child is transported to another country for interrogation.

Neither the child nor their parents are told the reason for arrest, which is frequently accompanied by both physical and verbal abuse. This is a daily experience suffered by Palestinian families on the West Bank at the hands of the Israeli army.

Since 2000, around 7,500 Palestinian children have been detained and prosecuted in the military court system, established as part of the illegal Zionist occupation of the West Bank.

Children are questioned without a lawyer or family member present; they are not informed of their right to silence and they are frequently threatened and physically assaulted.

They are forced to sign forged confessions, in Hebrew - which they neither speak or write - and interrogators focus on getting them to name names of older siblings, family friends, even parents.

Children as young as 12 are brought before the military courts. Most are denied bail and most plead guilty. Some 99.74% of cases end in conviction and 98% of the children are given a custodial sentence.

Regular reports detailing this treatment are submitted to the UN Rapporteur on Torture, by children's rights organisation DCI and others.

Their most recent report states that children "continue to be systematically ill-treated during their arrest, transfer and interrogation. This treatment consists of both physical and verbal abuse, as well as threats and intimidation. Further, the cumulative effect of the ill-treatment each child is subjected to, may in some cases, amount to torture".

More than 70% of the detained children are transferred to prisons and detention centres inside Israel, in violation of Article 76 of the Fourth Geneva Convention. As a result they get no family visits, because their parents can't get a permit to enter Israel. Palestinian children are not permitted to use the telephone or send and receive letters whilst in detention.

The soldiers act on frame-up reports made by the paramilitary settlers who roam the West Bank armed to the teeth with automatic weapons. In 67% of cases, the children report being ill-treated by soldiers or policemen whilst inside a settlement.

Here's testimony from Husam S aged 16:
They put me in a metal cage at the entrance to Huwwara interrogation centre. They made me stand against the wall and there were so many flies inside the cage. I tried to chase the flies off my body, but a soldier kept shouting at me and ordering me to face the wall. I kept standing there facing the wall for about an hour. About an hour later, the soldier said: “Come here motherfucker". He took me out of the cage and made me stand in the burning sun. "Take off all your clothes," he ordered me and I became scared of him. I took of all my clothes except my underwear. Then he ran a metal detector over my body and gave me big prison clothes and detained me in Room 2 with three adults

And from A, whose name and age were concealed as he named an Israeli officer:

“Don't you want to confess?" the interrogator kept shouting. "I got nothing to confess to," I kept responding, and he kept kicking me on my bottom. He grabbed my head and started slamming it against the metal closet while saying: "You son of a whore, I'll bring your mother down here." He would take a break and then resume hitting and kicking me. He kept doing this for about two hours. Then I got tired. "I threw Molotov cocktails at Israeli soldiers," I finally said [...] After that he took me to another room and removed the blindfold. A man talked to me and introduced himself as Captain Dawoud.

The state of Israel sanctions systematic brutality against Palestinian children, not only in military courts and prisons but in breach of all their rights - to education, to health care, to a childhood free of fear. These are crimes against humanity but they go unpunished because the major powers like the US and Britain in effect allow them to happen because Israel is their client state.

Penny Cole

Monday, January 23, 2012

St Paul's Occupation makes its mark

As the tent city Occupation outside St Paul’s, supported by sister occupations at Finsbury Square and the Bank of Ideas, approaches its 100th day, it’s time to celebrate its achievements.

The Occupation has defied countless predictions of its demise, enabling thousands of people to manifest a collective will and powerful determination to challenge the existing order of things at many levels.

The state with its many arms has acted against those who, inspired by Occupy Wall Street in New York and other global occupations – in particular in Cairo’s Tahrir Square and Madrid’s Sol Square - headed to the City of London’s Paternoster Square on October 15, 2011.

When the original intention to occupy Paternoster Square, where the London stock exchange is located, was thwarted by the laws of private property, the Occupation was forced on to the space outside St Paul’s Cathedral. The then canon, Rev Giles Fraser told the police to leave and gave the occupation permission to remain on the church’s property. Under pressure from the St Paul’s hierarchy, Fraser resigned his post.

Undaunted, St Paul’s activists have confronted the City of London police; the legal system which defends private property; misleading reportage by the London Evening Standard and Daily Mail in particular; hostility from sections of the Church of England hierarchy; and last but not least the antithesis of democracy in the shape of the City of London Corporation, which won its court action against the Occupation last week.

The Occupation has had to deal with the welfare problems that are rampant in society at large: ill health, substance abuse, mental instability, and homelessness. Many at St Paul’s courageously decided to try to help those suffering from these problems as best they could, a heavy task which at times threatened to overwhelm the action.

The greatest achievement of the Occupy movement is its struggle to liberate and colonise physical space – a highly political question in a London where public property has virtually vanished under the impact of corporate assimilation of the commons. Countless thousands who have walked past Tent City or had contact through other means have seen their preconceptions melt away when they have spoken directly to the occupiers or sat in on discussions. Inspired by the Occupation and the daily general assemblies and offshoot working groups and talks and discussions at Tent City University, the movement has built up a massive “virtual” presence. The Occupy website, its many Facebook and Twitter platforms are only the tip of an internet iceberg.

The publication of a hard copy and online newspaper, The Occupation Times, has formed a record of what has happened. The current edition includes a crucial discussion under the heading of “Revolution or Reform”. The working group offshoots have involved people from the Occupation itself as well as countless others who have take part in debates. These continue to function to develop concepts to take the movement forward.

Inspired by the US and Spanish occupations, the form of organisation has put into practice concepts of consensus democracy and “leaderlessness”. There have been many problems and criticisms associated with organising in this way. But these remain secondary to the undoubted need to find a really 21st century way of unleashing the democratic energies of those who have been hitherto excluded from decision-making processes.

The Occupation is a physical and mental learning process for all those who seek to change society. It has embodied and embraced a huge range of ideological tendencies. A World to Win has participated, with others, in raising the crucial questions of the need to transcend the cruelly limited and restrictive nature of capitalist democracy and the profit-driven economy which is in such turmoil and crisis. Facilitating these kinds of debates is one of the Occupation’s key achievements.

Corinna Lotz
A World to Win secretary

Friday, January 20, 2012

Using the C word to prop the system up

Suddenly it’s alright, if not de rigueur, for the political elite to talk about capitalism – so long as you end up praising the system rather than burying it.

Yesterday it was prime minister Cameron’s turn. He came out against “turbo-charged” capitalism, declared that City bonuses were “out of control” and said the Tories favoured “social responsibility”.

Naturally, the leader of Britain’s most significant ruling class party was not about to propose a radical alternative. In fact, Cameron insisted that the “real solution” to the system’s current problems was “more enterprise, competition and innovation”.

Open markets, he declared, were the “the best imaginable force” no less for “improving human wealth and happiness” and could “actually promote morality”. Believe that and you’ll believe anything.

The question is: why is Cameron so desperate to preach the alleged virtues of capitalism and markets at this particular moment? Why did Clegg call for a John Lewis co-ownership model of capitalism? What made Miliband distinguish between “predatory” and “good capitalism”?

What unites them is their role as political custodians of the capitalist system, sharing out the management of the wider state’s responsibility for its development. Just as importantly, their job is sustain the system’s legitimacy in the eyes of the majority, which it requires if the 1% is to stay in control.

And that is what is under pressure, as every survey reveals. Trust in and support for mainstream politics and politicians, as well as the operations of big business and banks, is ebbing away.

The parliamentary democratic state system is rightly viewed as partisan for siding with corporate interests in the crisis, bailing out banks while taking it out on ordinary people. In practice, it is undemocratic. A million young people are out of work; living standards have been savaged; many require two or more low-paid jobs to make ends meet while key public services are being wrecked.

Enter Cameron, Clegg and Miliband. Together they are critical of “corporate greed” and other features but carefully avoid any censure of the fundamentals of the capitalist system let alone suggest there might (or ought to) be an alternative. Even Cameron’s criticism of New Labour’s “Faustian pact” with the banks (on which he is right) is another diversionary attack.

For it is neither corporate greed (capitalists down the ages have practised this) nor the excesses of banks and bankers (also not new) that lie at the heart of the present downward spiral into global depression on a scale scarcely imaginable because it has no parallels.

The financial system provided the credit (and its twin, debt) for a globalised economy that is required to grow year on year to sustain profit levels and satisfy shareholders. Going into reverse, destroying production and sacking people, is what happens when debt overwhelms consumers.

Banks collapsed because bad debts began to mount, calling into doubt the questionable value attributed to all sorts of assets that looked good on paper so long as they earned an income. Meltdown II is now on the cards. A new credit crunch already exists and the debt crisis overwhelming the eurozone is a reflection of the recession.

Reining in City bonuses or curbing executive pay will make not a jot of difference to how this crisis unfolds. This is merely the froth of capitalism as a system of production and exchange. Creating an alternative system which does not depend on constant expansion in search of profit is the basis of a sustainable, rational alternative.

Inevitably that means taking ownership and control of capital out the hands of the reckless minority and placing it under democratic stewardship. That is what distinguishes us from Cameron, Clegg and especially Miliband.

Paul Feldman
Communications editor

Thursday, January 19, 2012

Food agency rewrites report to suit corporates

Global agri-business is increasingly influencing the work of publicly-funded food and agriculture bodies such as the UN Food and Agriculture Organisation (FAO) and the Consultative Group on Agriculture Research (CGAR).

A new report from the biodiversity action group ETC charts this change with three case studies where private interest capped public benefit.

The first shows how the FAO rewrote a report on “greening agriculture” under the impact of demands from corporate interests. The original report was produced jointly by all the so-called “Rome-Based Agencies” (all the UN food agencies have their offices in Rome including FAO, CGAR, etc.). NGOs like Oxfam, and small farming interests were consulted.

But publication of the first draft brought demands for changes from Crop Life International, representing pesticide manufacturers, the International Fertilizer Industry Association, and the New Zealand Farmers association, amongst others.

Without consulting the original authors, FAO rewrote the report to emphasise the importance of high-tech in the food chain, muffle data implying that the industrial food system is leading to the doubling and tripling of type 2 diabetes, and defend the role of meat and dairy products in a green economy.

A warning that the big transnational seed/chemical companies are patenting multi-genome “climate ready” crops was muted. And the report includes the astonishing statement that “we need to ultimately move people out of farming.”

Challenged by ETC about this phrase, Ann Tutwiler, FAO Deputy Director General for Knowledge, retorted: “Sorry — why would we want to shift to more labour intensive practices? It seems to me that we want to reduce the labour intensity of farming and shift labour to more productive uses in the agrifood systems, science, etc. Farming needs to be more knowledge intensive and more capital (including natural capital) intensive, but we need to ultimately move people out of farming.”

This represents a modern version of the “green revolution” approach which is historically responsible for world hunger. The 20th century approach was based on intensive use of pesticides and fertiliser. The 21st century approach adds gene-manipulation to the mix.

It is transmitted into the agencies by staff recruited from big business, and by the growing influence of corporations and corporate foundations - such as the Gates Foundation - at the highest level. Tutwiler is herself a former agri-business lobbyist.

Case number two involves CGAR's International Centre for Agricultural Research in Dry Areas based in Syria. They signed a three-year contract with the Mexican beer industry to provide them with new strains of malting barley for assessment. In return, the industry partner would have a Mexico monopoly on any successful strains. This may actually breach CGAR rules, but how many other such deals are happening?

Case number three relates to the gene sequencing of pigeon peas by CGAR's Hyderabad-based International Crops Research Institute for the Semi-Arid Tropics (ICRISAT). Last November they made a headline grabbing announcement that they had completed the sequence - but in fact the complete sequence had been published a month before, by government-backed Indian scientists. Why was ICRISAT not working in partnership with them? Because they chose to replicate the work, partnered up with Beijing Genomics Institute (the world’s largest gene sequencing company) and Monsanto.

Industrialised food is now the world's biggest industry, bigger even than energy. To continue expanding, the corporations must exploit land in Africa and Asia. But there's a problem - these key areas are already being affected by climate change - both drought and extreme rainfall.

So the corporates are jumping on board the UN expert networks, to get a share of the public funding invested in new crop varieties. They are buying influence, often through big “charitable” foundations, to ensure the UN shares their market-driven approaches.

Some corporations buy US politicians by the dozen to promote the view that anthropogenic climate change does not exist. Other corporations busily climate proof their business and prepare to profit.

Planning to meet climate change with fairer land distribution and sustainable organic methods is increasingly blocked out of the picture under the influence of corporations. We urgently need to transform this, reminding ourselves that food and industrialised food are not at all the same thing.

Penny Cole
Environment editor

Wednesday, January 18, 2012

'Clueless' as global crisis worsens

The World Bank is warning of a global downturn worse than that of 2008/09 which saw trade drop by 90% at it lowest point and production following suit. In a sharp about-face from the optimism of its June 2011 report, the Bank now says “the world economy has entered a dangerous period”.

It warns that countries do not have the “fiscal and monetary space” to stimulate the global economy or support the financial system to the same degree as they did in 2008/09. In other words, no rescue packages will be available this time round which is about as stark a message as it comes.

Following turmoil on the world’s financial markets in August, global trade volumes declined at an annualized pace of 8% during the three months ending October 2011, mainly reflecting a 17% annualized decline in European imports. On balance, the World Bank said global economic conditions were "fragile and there remains great uncertainty as to how markets will evolve over the medium term."

In an open admission that they, nor anyone else can do anything to prevent the worsening collapse, Andrew Burns, Manager of Global Macroeconomics and lead author of the report says “the importance of contingency planning cannot be stressed enough.”

The report admits: “An escalation of the crisis would spare no-one. Developed- and developing-country growth rates could fall by as much or more than in 2008/09.”

Underlining the interconnected self-feeding spiral of decline of the global capitalist economy, the Bank’s latest report adds: "The downturn in Europe and weaker growth in developing countries raises the risk that the two developments reinforce one another, resulting in an even weaker outcome." Failure to resolve high debts and deficits in Japan and the United States and slow growth in other high-income countries, could trigger sudden shocks, the report says.

On top of that, political tensions in the Middle East and North Africa could disrupt oil supplies and add another blow to global prospects. In a sign that billions of people in developing countries are to be abandoned to their fate, the Bank warns that they “should evaluate their vulnerabilities and prepare contingencies to deal with a downturn”.

Meanwhile, the crisis in Europe is deepening by the day, as evidenced by the latest unemployment figures in Britain. The number out of work rose to its highest level in more than 17 years in November. The number of people without a job rose by 118,000 in the three months to November to 2.685 million, the highest level since August 1994. The number of young people without a job jumped to 1.043 million in the three months to November, taking the unemployment rate in the age group of 16-24 year-olds to 22.3%.

Unemployment looks set to rise further. Banks and retailers have cut jobs in recent weeks and Britain's largest food group Premier Foods announced yesterday that it would slash 600 jobs in the face of weak consumer demand.

None of this is surprising, given the ConDem coalition’s spending cuts and the crisis within the eurozone economies. In a sign of desperation, the Bank of England is expected to launch another round of “quantitative easing” – aka printing of money – next month in a bid to inject some life into the economy.

The sense of a loss of control at state level is palpable, as the unwinding of the economic and financial crisis continues to outrun governments. As one minister told the London Evening Standard this week: “The thing to remember, the unsayable thing, is that no one, not governments, not bond markets, not ratings agencies, not the World Bank, the ECB or the IMF has a bloody clue what to do about any of it.”

Gerry Gold
Economics editor

Tuesday, January 17, 2012

They are all in it together!

The evidence of Labour’s collusion with the ConDem coalition has piled up so high that even Len McCluskey, the leader of the Unite union, can no longer ignore it. “The real points of differentiation between Labour and the government on the economy are now very hard to identify,” he admits today.

McCluskey’s union propelled Ed Miliband into the leadership in the vain hope that he would lead the party in a new direction, away from the Blairism of the previous 15 years towards a modernised version of Old Labour.

With shadow cabinet members lining up to support the government’s public sector pay freeze, cuts in education and saying that a Labour government would continue with the ConDems’ austerity policies, a shell-shocked McCluskey hit back – at least in words.

Writing in The Guardian, he says that “this year we have seen one shadow minister after another falling over themselves to endorse savage spending cuts which are hurting real people. Where does this leave the half a million people who joined the TUC's march for an alternative last year, and the half of the country at least who are against the cuts? Disenfranchised.”

The general secretary of Britain’s largest union, whose financial support keeps Labour afloat, says the country now has a “national government” consensus among the three major parliamentary parties. McCluskey tries, without success, to paint a picture of Miliband as a prisoner of the Blairites.

He claims that shadow chancellor Ed Balls's “sudden embrace of austerity and the public-sector pay squeeze” represents a victory for “discredited Blairism” and also “challenges the whole course Ed Miliband has set for the party, and perhaps his leadership itself”. This is desperate stuff.

Miliband has actually set the course himself. His front bench has backed many Tory policies and Miliband himself has declared that his policy is to build a fairer, more responsible, prosperous capitalism. It’s an approach that David Cameron himself has embraced enthusiastically if opportunistically.

The Labour leader attacked the mass strikes in defence of public sector pensions and instructed party-controlled councils to implement spending cuts passed down from the ConDem coalition (a policy backed by Labour-affiliated unions, by the way).

Blairism was an outright adaptation to and acceptance of capitalism and the power of financial markets. It marked the termination of the long social-democratic, reformist tradition in Labour politics, no longer viable within a globalised capitalist economy.

With the world economy in a profound crisis, Labour – along with similar parties in Greece, Spain, Portugal etc – has bent with the prevailing economic wind. It was either that or challenging the fundamentals of the capitalist system itself. Anyone expecting the latter to happen, whoever leads Labour, is living in a fool’s paradise.

McCluskey is also angry, rightly so, that as one of the party’s paymasters, he was not asked about the shift that has taken Labour into the arms of the ConDem coalition.Naturally, he has a remedy to hand if he serious about representing his members’ interests.

He could call a ballot on the case for disaffiliating from a party that clearly speaks for big business, the City and the bond dealers. As his members are, as he points out, disenfranchised, McCluskey could generate a discussion on how trade unionists and their supporters could be better served.

Unfortunately, there is no sign of that happening. McCluskey is desperate to keep the political fight inside a party that is now part of a national coalition against ordinary working people. This is, in practice, a great disservice to Unite members who will no doubt draw their own conclusions when they fight the ConDemLab pay freeze.

Paul Feldman
Communications editor

Monday, January 16, 2012

The bottom line and safety at sea

The sinking of a 21st century hi-tech cruise ship in calm waters, on an established route in well-known waters off the coast of Tuscany has set alarm bells ringing for many reasons.

Travel experts are astonished since the less than six-year old £350m Costa Concordia was equipped with all the latest navigation technology which should have alerted the crew to the rocks that tore a hole in its side.

The Costa Concordia belongs to the Carnival Corporation, which is the world’s largest cruise company. Based in Miami, it owns legendary names including the Costa, P&O, Cunard, Holland American Line, Ibero and Seabourn brands.

With 3,200 passengers and around 1,000 crew on board, the Costa Concordia could strike you as a monstrously large ship. But cruise ships have become even larger as the corporations that own them seek economies of scale. Some, like the Allure of the Seas owned by Royal Caribbean International, can hold 6,360 passengers and over 1,000 crew.

Whilst some of us may view a maritime cruise as a luxury only for a small minority of the rich and idle, the industry sees passengers as cash cows to be relieved of their savings. The stats for Carnival’s latest ships, still in construction, sum it all up: the 130,000 tonne juggernauts are part of its Dream class group and feature amusements like a water park, a 2-deck miniature golf course and a whirlpool jacuzzi in four places along the outside edge of the deck.

There has been a massive growth in the industry over the last decade with around 1.7 million British people enjoying cruise holidays last year. So much so that some industry experts seem far more concerned about the impact the disaster could have on profits. “It’s a bad moment for the industry,” says Sara Macefield in The Sunday Telegraph. (But not too bad for the British market since there were only 24 Britons on this sailing, she adds, in nationalist tones.)

It has taken eye-witness accounts by passengers to reveal the truth behind all the glitz and prevarications of the cruise industry. When the Costa Concordia hit the rocks, passengers were simply told there was a technical problem, thereby losing precious time.

Minutes later, the ship listed so badly that they could not access some of the lifeboats. Many have spoken about the lack of evacuation drills or muster training to prepare for emergencies, not only on the Costa Concordia but on other Carnival-owned ships. They also spoke about the lack of leadership from the ship’s senior crew.

The maritime industry is institutionally ridden with disdain for most of its passengers and those who labour on and below decks. While officers are well trained and well-paid, lower-ranking crew are not. Andrew Linington, head of communications for Nautilus International, a trade union for ships’ officers, says that most of crew members on these big vessels receive only four to five days initial safety training, “a fraction of the safety training given to airline cabin crew.” On-board safety equipment has hardly changed since the Titanic disaster, Linington says.

The sinking of the Costa Concordia, like that of the Titanic 100 years ago, is symbolic of the state of the system itself. Capable of brilliant advances in technology, including navigation systems and shipbuilding, it is fatally compromised by its bottom-line motivation: shareholder profits. And, equally important, the best systems in the world are only as good as those who operate them.

Industry experts have written off Costa Concordia as “constructive total loss”. The same should be said of the capitalist system as a whole where profits come a long way before the interests of ordinary people, on cruise ships or not.

Corinna Lotz
A World to Win secretary

Friday, January 13, 2012

TUC divides pensions fight

At the first whiff of grapeshot, the right-wing leaders of the Trades Union Congress (TUC), history will show, turned and ran straight into the arms of the ConDem coalition over cuts to public sector pensions.

Yesterday the TUC ruled out any further co-ordinated industrial action along the lines of the November 30 strike which brought two million public sector workers out on to the streets.

A fear of what a repeat of this action could lead to was undoubtedly instrumental in the decision of the TUC’s public sector liaison group to block calls for more strikes and, instead, to seek a deal with the government through further negotiations.

Last year, Derek Prentis, secretary of the million-strong Unison union, was making firebrand speeches at his conference and got the backing to hold a strike ballot. As one suspected, it was hot air and no substance.

Prentis, supported by TUC secretary Brendan Barber, saw November 30 as something to get out of the way before making a deal on the terms set out by the government. This will mean higher contributions, working longer and reduced pensions on retirement.

Other unions, representing another one million teachers, civil servants, local government and health workers, have declined to sign up to the general framework agreement announced by the government just before Christmas.

Most are willing to resume negotiations but one, the civil service PCS union, doesn’t even have that opportunity. It has been excluded from future talks because of its outright rejection of the “agreement”.

PCS's national executive committee yesterday unanimously reaffirmed the rejection of the government’s plans to increase contributions from April, link the retirement age to the state pension which is rising to 68, and impose a switch in indexation that means a cut in the value of pensions of around 15% to 20%.

PCS general secretary Mark Serwotka said: "We will continue to call for proper negotiations on the key issues of paying more and working longer for less.” The PCS will try and work separately with other unions holding out to organise more strikes.

Behind the split in union ranks, which will gladden the government no end, is undoubtedly the hand of Labour. The party distanced itself from the November 30 strike and wants no repeat. Prentis, who has refused to support action against spending cuts by local, often Labour-led, councils, would not have needed much persuasion.

It remains to be seen whether other Labour-affiliated unions like Unite take their resistance much further. Don’t put your money on it. Their aim is to wait until the next scheduled general election in 2015 (!) and hope that Labour is re-elected in the forlorn hope of a few favours returned. With Ed Miliband accepting that further spending cuts will have to be made and planning Labour’s very own austerity package, public sector pensions will stay under siege.

Ultimately, the TUC bureaucrats fear the consequences of the crisis of capitalism which is driving the government’s attack on the public sector. They hope that by appeasing the ConDems, ministers will back off. This is an illusion. As outright recession becomes a real possibility, the government is in no position to weaken its resolve, especially as it will have to borrow more not less on the international money markets.

The decision of the PCS to lead further resistance is welcome but it is in a position to go further. Politically, there are no solutions to hand, with a ConDemLab coalition taking shape, while the economy’s woes are revealed as a crisis of the system itself. By sponsoring a conference to initiate a discussion on creating political and economic alternatives the PCS could make a real contribution to the struggles ahead.

Paul Feldman
Communications editor

Thursday, January 12, 2012

Self-determination for Scotland has to end minority rule as well

It is hardly surprising that Scots hate rule from Westminster - they are not alone. Millions of workers all across the UK have come hate the ConDems Coalition for imposing the full burden of the economic crisis on their backs.

Whatever question is on the ballot paper for Scotland’s proposed referendum, there will be none that will bring about independence from cuts, closures, poverty, capitalism and the banks.

It will simply give people in Scotland the chance to swap rule of the 1% based at Westminster for the 1% based in Edinburgh. Or rather, continuing rule by the global corporations that rule everywhere, supported by their cohorts in the Scottish banks, the oil industry and the landowning, shareholding, political elite.

We will be asked to vote out the sham UK democracy and replace it with a sham Scottish democracy that will provide self-determination for an elite only.

The reality is that as a small economy, Scotland’s fate would be decided by global events and the decisions of the major capitalist states. This is the experience of Greece, Hungary, Iceland and Ireland among others.

It has been the experience of devolution, which has been unable to insulate Scots from the ravages of the global financial and economic crisis. One in three children in half of all local authority areas live in poverty, one in two in Glasgow. Unemployment is once again higher in Scotland than in the rest of the UK, and youth unemployment stands at 25%.

Further Education colleges face unprecedented cuts and an unwanted and badly-planned restructuring. The infrastructure of both Edinburgh and Glasgow is crumbling. Both cities’ councils are riven by scandals, waste and a ruthless determination to ignore the views of the people.

It is just crude nationalism to talk about being “free from England”. Who do we want to be free from? The tenacious battlers who continue to occupy at St Paul’s? The electricians striking across the UK to prevent the destruction of their wages and working conditions? The disabled people and their supporters fighting cruel cuts in benefits? Do Strathclyde Police have a kid glove where the Metropolitan Police have an iron fist?

There is not one England any more than there is one Scotland.

From Labour we get a kind of greater British nationalism, a support for the union that has more to do with the big fat prize of Westminster government jobs than any principles. It certainly has nothing to do with defending the unity of the British working class and trade unions.

Labour can only win at Westminster with Scottish votes, and Ed Miliband makes clear they would use those votes to continue with cuts and attacks on living standards. It is no wonder that Scots have come to detest Labour almost as much as they detest the Tories, and the SNP under Alex Salmond has benefited from that.

Cameron’s “defence of the union” is equally self, or rather power-seeking. Ditching Scotland might ensure a permanent Tory majority in England. That’s why they want just one question - independence, yes or no - on the referendum ballot paper.

And as a result, Cameron sets out to deny Scots the right to vote for a greater degree of devolution, even although polls suggest that is what they would prefer and even although people in Wales had a referendum on this in March 2011.

If it comes to a referendum, A World to Win will support the right of the Scottish people to self-determination but will campaign for real liberation from the likes of Salmond, the banks, landowners and the Scottish ruling elites.

What we need is to form People’s Assemblies all over Scotland now, to create the basis for a truly profound shift in decision-making, authority and ownership - directly to the people. We can’t vote for a revolutionary form of independence, that combines self-determination with an end to minority capitalist rule. They won’t put that question on the ballot paper. So we will have to put it on the agenda ourselves.

Penny Cole

Wednesday, January 11, 2012

The spectre of Marx haunts the debate

Contributors to the debate about capitalism increasingly find themselves obliged to consult Marx, the primary authority on the system, and to try and refute his arguments for its replacement.

The deepening global economic crisis is driving the discussion. Every attempt to resolve it just makes matters worse. Every new set of figures negates the idea that the problems are temporary.

As the Telegraph’s Jeremy Warner has it today: ‘Normally, the economy will bounce back quite quickly from a cyclical contraction, fast rendering the anti-capitalist backlash redundant. But this time, there is no such recovery.”

He points out that more than three years since the recession started, Britain’s economic output is still below the level it reached in 2007. Prospects for growth do not appear on the radar.

Meanwhile, a redistribution of wealth is going on apace – from the poor to the rich. “There is no hardship for those seen to have caused the slump. Bankers and company bosses are paying themselves even more than they were during the boom; the wealth divide continues to widen.”

Warner, assistant editor and leading business commentator, uses his article to bash Ed Miliband (bit of an easy target) for failing to come to terms with changed conditions and declining to accept New Labour’s role in the build-up of debt that has overwhelmed the economy.

But he has to admit: “Rightly or wrongly, capitalism is seen to have failed. To counter rising forms of populism, it must find ways of recreating and reinvigorating itself.” Unfortunately for Warner, the patient’s vital life signs are heading in the opposite direction.

Enter Emanuel Derman, a former managing director at Goldman Sachs, and one of the leading proponents of the financial engineering that propelled the credit boom to its catastrophic collapse. He opens his new book (Models Behaving Badly: Why Confusing illusion with reality can lead to disaster, on Wall Street and in Life) with a famous quote from Marx and Engels his co-thinker and factory owner: “All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face, with sober senses, his real conditions of life, and his relations with his kind.”

Ultimately, however, like many other commentators, he thinks there is life in the old dog of capitalism yet if only the financial system abandoned its reliance on mathematical models. Ah, if the answer were so simple!

To his credit, Derman acknowledges the relevance of Marx while author and academic John Kay, visiting professor at the London School of Economics, tells the readers of the Financial Times that capitalism actually no longer exists (which is news to those under its heel). “The political and economic environment in which Marx wrote was a brief interlude in economic history.”

Kay argues that the nature of share ownership is so diffuse compared with the individual capitalist of 19th century England that “people do not know who owns their work tools because the answer does not matter” while “control over the means of production and exchange matters a great deal to the organisation of business and the power structures of society”. Kay suggests that we abandon the term capitalism and refer to the “market economy” instead.

But far from being a refutation, Kay’s analysis reinforces the method that Marx and Engels developed and used in their work, which revealed not just the inner, contradictory logic that drives the system to its alternating periods of credit-enhanced growth and catastrophic collapse, but the necessity of its continually changing its form.

Most importantly of all, Marx and Engels’ dialectical method showed the temporary, historical nature of the system and how it created the conditions for the socialisation of production. With due respect to Warner, capitalism has not just “seen to have failed”. It has failed in practice and it urgently needs replacing.

Gerry Gold
Economics editor

Tuesday, January 10, 2012

A capitalism that lacks legitimacy

While Ed Miliband brings Labour into an ever-closer alignment with Tory arguments (and policies) on the economy, it falls to the Financial Times to ask whether capitalism can respond to an historic crisis of legitimacy.

As the FT notes: “The system, in all its different varieties, is widely perceived to be failing to deliver.” This is a genuinely serious question which in turn raises real issues about democracy (or the absence of it) and whether the system is capable of re-enlisting the support it once enjoyed.

Miliband, naturally, is incapable of addressing these matters because they strike at the heart of the system of political rule which acts as a proxy for corporate and financial power in every country (and which he is so desperate to be part of).

In fact, his acceptance today of spending cuts to reduce the deficit, attacks on welfare (even questioning the winter fuel allowance for older people) – in effect, setting out Labour’s very own austerity package – will only deepen the growing hostility to the system itself.

Actually naming its series of articles “Capitalism in Crisis”, the paper of choice for business executives, acknowledges that “democratic legitimacy has been largely lacking” in the measures taken by governments over the last four years.

“On both sides of the Atlantic there is now a risk that reasonable aspirations to equality of opportunity are being undermined, accompanied by a growing threat of political instability. Support for open trade and free markets is also being adversely affected.”

The significance of this lack of consent should not be underestimated. As a system based on private control of wealth and resources, capitalism actually depends on a measure of acceptance by the 99% which is mostly expressed through the political process.

When consent declines in any significance, the nature of capitalism itself stands revealed and becomes more reviled (which the article points out has happened several times over the last 200 years). “Greedy bankers, overpaid executives, anaemic growth, stubbornly high unemployment – these are just a few of the things that have lately driven protesters on to the streets and caused the wider public in the developed world to become disgruntled about capitalism,” the FT remarks.

In a recent survey about trust, under 50% of Americans and British asked said they had “faith in business to do what is right”. The US and the UK were only just ahead of Russia.

The FT believes that growing income inequality is at the root of the discontent rather than growing poverty. In this they are partly right. In 1975, the ratio of the pay of a CEO to an average worker was 35 times greater; by 2010 the ratio had soared to 325 times. Large sections of the middle-class also did very well in the halcyon days of globalisation.

There’s no doubt that perceptions of unfairness drive many protests. But demands that workers pay for a crisis they did not create through lower pensions, reduced wages and unemployment is about defending an often modest standard of living and brought millions out on strike.

For the FT, as for Miliband, the question is “how to improve the existing model of capitalism”. Here they both run into a major difficulty. The globalisation process created a hydra-headed beast that knows no borders, has more power than nation states and is very much immune to political processes.

The trust survey showed an even greater mistrust of government than of business, which must in part be due to the fact that politics is seen to do the bidding of and be in the pockets of the wealthy. Meanwhile, as the FT admits, “efforts to re-regulate the banking system…have failed to convince many experts that an even larger financial crisis can be avoided”.

In sum, capitalism has little room for manoeuvre and a negligible chance of restoring consent for its continued rule. Of course, it’s not giving up power voluntarily time soon either. But the opportunities to argue for and achieve a revolutionary democratic transformation of capitalist society are more favourable than for a very long time.

Paul Feldman
Communications editor

Monday, January 09, 2012

Populist Cameron trumps pathetic Labour

Interviewing the prime minister for the Sunday Telegraph, Matthew D’Ancona curiously concluded that David Cameron was a man with a mission – “to save capitalism from itself”.

Cameron is acutely aware that the system is in deep trouble and that vast numbers of people are increasingly angry about the widening gulf between them, the rich and the powerful.

A new poll has confirmed that economic fears are by far the greatest concerns. So Cameron is in a bidding war with Labour to fool a worried public that that action is being taken to curb the excesses of the system. With Ed Miliband’s party in practice a semi-detached part of the coalition government, Cameron’s task is made easier.

Cameron’s trumpeted curbs on executive pay, aimed at giving shareholders a direct say in determining salary packages and pay-offs, is aimed at soothing outrage over the earnings of company directors, as is his decision to maintain the top 50p rate of tax.

People are aware that the class divide is deeper than ever. The vast majority, are disgusted at the wealth of a tiny minority. Rising prices and bills combined with rapidly rising unemployment and wage freezes have cut deep into people’s standard of living.

Anger at top people’s wealth is of course totally justified. An independent survey finds that chief executives of 87 of the FTSE 100 firms helped themselves to a 33% rise in pay and perks in 2010-11, taking their average package to £5.1million. Other directors took pay rises of 49% over the year, walking away with £2.7million each.

Small wonder, then, that the Tent City occupation outside St Paul’s, which initially targeted the London Stock Exchange, has continued to strike a chord amongst large numbers of people, including City workers.

For a Conservative leader, Cameron has been harsher in his criticism than Labour of how economic growth and speculation on the markets has benefited a tiny minority. Edward Heath, the Tory prime minister before Margaret Thatcher, once famously talked of the “unacceptable face of capitalism”.

Cameron went one better in outright populist rhetoric directed at big business. He told BBC’s Andrew Marr show, that where “there was excessive growth of payment, unrelated to success, frankly ripping off the shareholder and the customer, [it] is crony capitalism and is wrong. It’s also, and this is the key point, payments for failure”.

It’s not the first time that Cameron and his strategy directors, who include Steve Hilton and Andrew Cooper, have invaded territory which Labour felt it could lay claim to. But that’s not difficult. Shadow Business secretary Chuka Umunna’s pathetic weekend call for a “responsible and better capitalism” hardly set the pulse racing.

The truth is that these political leaders hope to cash in on disquiet with the system simply to keep the show on the road, just as the spectre of uncontrolled financial markets and the greatest debt crisis in history is causing economic havoc.

The notion that the shareholders can somehow regulate the fortunes made out of the system is just as harebrained as the idea of that politicians can control or even influence the flows of capital through the world’s financial market.

Giving shareholders more power will do nothing to change the spots of the capitalist leopard. Institutional shareholders like insurance companies have already presided over the biggest transfer of wealth from the majority in society to the minority. And many of them benefit from the same high earnings as the CEOs they are supposed to regulate.

Along with business secretary Vince Cable and the Labour leaders, Cameron is simply cashing in on the oh-so-threadbare but still powerful myth that capitalism can be reformed or tamed by pretending that “fairness” can be spread around. Behind all the rhetoric lies the awareness that they are impotent as the system careers further and further out of control.

Corinna Lotz
A World to Win secretary

Friday, January 06, 2012

Hungary crisis driven on by new credit crunch

A chain under stress usually breaks at its weakest link. For the global financial system, the pressure point could well prove to be Hungary.

Although not in the single currency, Hungary’s depressed economy is entirely dependent on credit from banks that are in the eurozone, particularly those located in neighbouring Austria and Italy.

Those credit lines have dried up as a result as the drift to a full-scale banking crisis in Europe takes its toll on lending, leaving Hungary vulnerable to a sudden withdrawal of funds.

Banks everywhere, including the UK, are now reluctant to lend to anyone, including other financial institutions, for fear they won’t get their money back. And their scope for lending has been further reduced by a requirement to increase their asset base (which led to a run on Italian bank Unicredit’s shares yesterday).

Hungary’s beleaguered autocratic government led by the populist Viktor Orban yesterday had to pay interest of 10% to borrow some short-term money. A debt-swap auction was cancelled for lack of interest.

Hungary needs to roll over nearly €5bn of external debt this year and in February is due to start repaying a loan from the International Monetary Fund that saved the country from collapse in 2008.

The country is now asking for more help from the IMF. This won’t be straightforward as the IMF is demanding political and economic policy changes first. The danger of a Hungarian sovereign debt default remains high, which would have a contagion impact throughout Europe.

Orban’s nationalist posturing is adding to the risk, as does a growing political crisis which last weekend saw tens of thousands of people rally in Hungary against a new constitution that gives the state draconian new powers over its citizens (as well as the central bank, much to the angst of the EU and IMF who are not particularly bothered about the rest). A declaration on the “decline of democracy and the rise of dictatorship” in Hungary was circulated by a number of former political dissidents.

Other so-called periphery countries, like Rumania and Poland, are equally vulnerable to a credit crunch. Austrian, French, German, Greek and Italian banks are heavily committed to loans to these countries.

There are no “solutions” in sight, as billionaire investor George Soros acknowledged in relation to the eurozone crisis. Soros was only stating the obvious when he warned that a collapse of the single currency would be “catastrophic not only for Europe but also for the global financial system".

The stresses are showing up throughout the system. A survey by the Bank of England reveals that Britain's banks are more worried now about a credit crunch than at any time since the first one brought down Northern Rock in late 2007. Inter-bank lending rates have risen as a result of the eurozone crisis and these have been passed on to companies in the form of higher interest charges.

The survey also showed the first increase in default rates on loans by bigger business in two years. "For large and medium-sized corporates, default rates were reported to have picked up for the first time in two years and a further pick-up was expected," the survey said.

The central bank's quarterly Credit Conditions Survey also showed that small businesses' demand for credit had fallen sharply, and that banks expected demand for credit to drop in the coming months. The survey confirms that the UK economy is on a knife edge, heading from recession to outright slump.

Paul Feldman
Communications editor

Thursday, January 05, 2012

The incorporation of Labour

The assimilation of Labour into accepting the Tory Party’s narrative is moving at such a pace that it is no wonder that David Cameron finds his party ahead in the polls.

In virtually every major policy area, Labour’s own views are hardly distinguishable from those of the government; on crime, immigration and anti-terror laws, Ed Miliband’s crew are actually to the right of the ConDem coalition.

Only this week, Liam Byrne, the shadow work and pensions secretary, claimed that the benefits system had “skewed social behaviour”, provided “unearned support” and run up an unsustainable housing benefits bill.

In an articlefor the Guardian, Byrne called for “fresh thinking” and an abandonment of the party’s “old agenda”. In practice, Byrne and Labour are backing Iain Duncan Smith’s “welfare reform” bill.

On education, where Michael Gove is busily breaking up what remains of the comprehensive schools system, there is tacit backing from Labour. As the astute Tory commentator Peter Oborne
notes: “Gove is the first post-war education secretary to challenge effectively the power of the teaching unions – and move against an educational establishment that is constitutionally opposed to excellence and high standards. Amazingly, he seems to be bringing the Labour Party with him.”

Similarly on the economy. The ConDems have insisted draconian cuts in spending were made necessary partly because of the failed economic policies of the Blair/Brown governments. Shadow chancellor Ed Balls originally rejected this simplistic, half-truth.

Now, according to Oborne, even Balls agrees with “the need for drastic cuts in public spending” and only “the relatively minor detail of timing” is in dispute. “In all essentials, Ed Miliband’s Labour Party now accepts the fundamental economic insights of the Cameron Coalition.”

No surprise then that Miliband, propelled into the party’s leadership by the three largest trade unions in the hope he would be their prisoner, is struggling to find a coherent strategy that differentiates Labour from the Tories. Enter Lord Glasman, a founder of so-called Blue Labour and a Miliband advisor, whose statements on immigration could have come from the right-wing of the Tories.

Just to make sure Miliband gets the message, Glasman has told him that “there seems to be no strategy, no narrative and little energy” at the top of the party. Glasman urges the termination of what he terms “an unhappy and abusive relationship with the unions” and to end being identified with the interests of public sector workers.

Miliband is almost there. He opposed last year’s strikes in defence of public sector pensions and there are reports that he intends to reduce the reliance on trade union funding (Rod Aldridge, the former chief of outsourcing firm Capita who donated £1m to Labour was given a knighthood in the New Year list. One of Miliband's newest advisers is Andrew Rosenfeld, the property tycoon who has also given £1m)

Glasman is kicking at an open door when he urges Miliband to “leave behind stale orthodoxies and trust his instinct that change is essential”.

Oborne’s view that the “facts of life are Conservative” and that Labour has accepted this is, of course, used to damn what he terms the “Left” which he identifies with the 13 years of Blair/Brown governments.

This is historically inaccurate as well as misleading. New Labour long ago accepted the facts of corporate-driven globalisation and came to believe in a “new paradigm” of a crisis-free capitalism, with uninterrupted growth and riches for all. It was a view shared by many economists and politicians around the world, including the present Tory leadership.

The “facts of life” are actually those of an economic and financial system in profound crisis globally and not principally because governments spent too much. Reliance on credit/debt was the only way to sustain ever-growing consumption and, more significantly, profit levels.

So the credit crunch and financial meltdown was an expression of this permanent, inner-tension between production and profit that lies at the heart of capitalism. And the result is not just the wiping out of vast areas of capacity, leading to mass unemployment, but the integration of Labour into the ConDems’ desperate strategy to turn things round.

Paul Feldman
Communications editor

Wednesday, January 04, 2012

Institutionally beyond reform

Wheeling out Cressida Dick to give the Metropolitan Police’s reaction to the conviction of two men for the murder of black teenager Stephen Lawrence almost 19 years ago says it all really.

Dick, acting deputy commissioner at Scotland Yard, was notoriously in charge of the bungled police operation that resulted in the virtual execution of Brazilian electrician Jean Charles de Menezes as he sat in a Tube carriage at Stockwell in 2005.

Menezes was shot seven times in the head after being mistaken for a terror suspect, denied a chance to identify himself. Immediately the Met went into cover-up mode, claiming that Menezes had vaulted the gates at the station and was wearing bulky clothing that could have hidden a bomb.

None of this was true, of course. Menezes’ simple misfortune was to be identified as a possible wanted man by watchers for whom one “foreigner” clearly looked like another. Not to mince words, this was racism in practice.

Now the police did not murder Lawrence. But they did their best to prevent his killers from being convicted by wilfully ignoring the evidence that this was a racist killing involving David Norris, Gary Dobson and other local gang members.

Dick claimed that the recommendations in the 1999 Macpherson inquiry report into the Met’s failures over the Lawrence killing “have transformed policing”. Oh really? Among other things, Macpherson found that the Met was “institutionally racist”.

Leaving aside the absolutely indifferent handling of the forensic evidence which threatened to wreck the case against Norris and Dobson, other facts do not back up Dick’s claim.

Statistics show that a black person is more than nine times more likely to be searched than a white person. This is a higher ratio than before the Macpherson report was published.

The number of black and Asian people stopped and searched by the police increased by more than 70% in the five years between 2004 and 2009, according to Ministry of Justice figures. They show that more than 310,000 black and Asian people were searched by the police on the streets in 2008/09, compared with 178,000 in 2004/05. Although the Met covers only 14% of the population of England and Wales, their officers carried out 42% of all stop and searches. The figures for 2008/09 show there were three times more arrests of black people than white people, based on per 1,000 population figures.

Ann Juliette Roberts, of Edmonton, north London, was initially targeted by officers in September 2010 because she did not have enough money on her Oyster card for her journey. But the situation soon escalated after they insisted on searching her bag because she was holding it "suspiciously", the High Court heard last year.

The black special needs assistant was restrained face down on the floor and handcuffed. Officers found bank cards with different identities, which she explained were in her name, her maiden name - having recently married - and her son's name. She was arrested on suspicion of fraud and given a drugs test.

Roberts is asking the High Court to rule Section 60 of the 1994 Criminal Justice and Public Order Act "incompatible" with the European Convention on Human Rights.
Section 60 allows officers to search anyone, without suspicion, for dangerous instruments or offensive weapons in a designated area for a 24-hour period.

Most recently, of course, are the suspicious circumstances surrounding the death of black man Mark Duggan, shot by police in north London in August outside the vehicle he was travelling in. The official version of events indicated that Duggan fired a gun and a bullet lodged in a police radio. An investigation has since found no forensic evidence that Duggan was carrying a weapon at the time. Duggan’s killing triggered a wave of inner-city rioting across England.

The facts (including involvement with News International over phone hacking, leading to top resignations and Dick becoming acting no 2) point to a Met that is yet another unreformable section of a state that oppresses rather than serves most of its citizens – black and white – in one way or another, most of the time.

Paul Feldman
Communications editor

Tuesday, January 03, 2012

Scandal of German state's cover for far right

News of an astonishing catalogue of wanton failures by Germany’s intelligence agency, the Bundesverfassungschutz – Federal Office for the Protection of the Constitution (BfS) – is sending shock waves through the country.

Details of a 30-page confidential investigation was commissioned for the German government and sent to the state authorities just before Christmas have been revealed by Der Spiegel magazine. They document how a murderous neo-Nazi terror group known as the Zwickau cell was well-known to the authorities and could have been stopped years ago.

Right-wing terrorism in post-unification Germany is nothing new. Germany was wracked by a spate of killings between 2000 and 2007 in which eight people were killed by two members of the terror group which called itself the National Socialist Underground. The men, Uwe Bohnhardt and Uwe Mundlos, later shot themselves after a failed bank robbery.

What is new is the sharp increase in acts of right-wing violence over the past year – from 300 to 9,800. But the neo-Nazis are not only targeting people of foreign descent, gays and the homeless. Recent months have seen some 100 attacks on members of Germany’s Left Party, including its leader Gregor Gysi.

Lists of names and addresses of Left Party officials were found amongst the Zwickau cell terrorists. The Left Party’s security policy spokeswoman, Ulla Jelpke, has seen her Dortmund office attacked by paving stones, graffiti, acid and steel balls fired through the window.

The exposure of the intelligence service’s failings, has brought to the surface a truly shambolic situation within the German state itself. Even mainstream media are asking how much of the state’s blind eye to right-wing terrorism is due to bungling and how much to protection from within the security agencies themselves.

Far from being a secret, the activities of the neo-Nazis in the former east Germany states of Saxony and Thuringia were closely monitored by the state.

But due to distrust between different branches of the German state and lack of action by local prosecutors, far right terrorists in groups like the Thuringian Homeland Protection and Jena Comradeship continued their bank robbing and murdering people of foreign descent.

As long ago as 1997, the Thuringian state sold a luxury mansion to a far right group of holocaust deniers and some accuse the Thuringian section of the state intelligence service of disrupting police investigations into the terror cells. The head of Thuringia’s state branch in Erfort, Helmut Roewer, was suspended in 2000 for a “range of irregularities” and a confidential report said that some sections of the agency had “failed completely” during his period in office.

Der Spiegel has long been known for exposing murky aspects of Germany’s state – but matters are now so bad that even authorities themselves are expressing shock at the scale of the inaction, bungling and bureaucratic infighting.

The president of the BfS, Heinz Fromm, who has headed the agency since 2000, professed shock in an extraordinarily apologetic interview with the Tagespiegel newspaper. He said the agency had transferred its attention from the far right to Islamic terrorism after the 9/11 attacks, but claimed not to know why investigations into neo-Nazis were halted in 2001.

Despite the state running 130 paid informants within Germany’s chief neo-Nazi organisation, the National Democratic Party (NPD) and within the Thüringer group itself, the security services failed to prevent the National Socialist Underground group’s terror activities.

Jorge Ziercke, head of the Federal Criminal Police Office (BKA) has said that public confidence in the rule of law has been “shaken to the core” while opposition parties in the Bundestag are calling for a parliamentary investigation.

But the Zwickau scandal is only one sign that the relations within the German state are under stress. Even the long-standing cosy relationship between Das Bild newspaper and Angel Merkel’s ruling CDU party is showing signs of breaking down. With German capitalism fighting a desperate rearguard action to prevent a collapse of its cherished eurozone project, the divisions within the state indicate a deep turbulence in ruling class circles.

Corinna Lotz
A World to Win secretary