US faces a perfect storm on all fronts

After the devastation delivered by a perfect storm, the prospect of the United States falling off a “fiscal cliff” within two months is not one that America’s ruling political and corporate elites are looking forward to with any relish.

With next week’s presidential and general elections on a knife-edge, the economic future is as unpredictable as the super-storm that has wrecked large areas of the east coast and shut down New York.

While the media coverage of the impact on the United States is wall to wall, you should know that storm Sandy destroyed 70% of the crops in southern Haiti, still far from recovered from the 2010 earthquake, and caused widespread deaths of livestock. Jamaica, Cuba, the Bahamas were badly damaged too.

The US government will, of course, print the billions needed to repair the country’s infrastructure and get transport moving again, the aforementioned Caribbean nations will stagger on until the next storm arrives, no better prepared in the future than this time around.

Even in New York, however, the gross inequality that is the feature of the city and many other places across the country, showed itself in the storm. As Reuters’ David Rohde reported: “There were residents like me who could invest all of their time and energy into protecting their families. And there were New Yorkers who could not. Those with a car could flee... But the city’s cooks, doormen, maintenance men, taxi drivers and maids left their loved ones at home.”

The city is the most economically divided it has been in a decade, according to the New York Times. Over 20% of the city is in poverty. In Manhattan, the wealthiest 20% made $391,022 a year on average The poorest 20 percent made $9,681. Manhattan’s richest fifth made 40 times more money than its poorest fifth. Only a couple of other countries in the world in sub-Sahara Africa display such inequality.

Manhattan is the home of the New York Stock Exchange which will open again today. Whilst eight million are without power, and likely to remain so for days, the show must go on.

But the so-called fiscal cliff is looming large. This is a combination of expiring tax cuts coupled with mandatory spending reductions by the federal government totalling some $600 billion. Unless Congress can agree a deal – which seems most unlikely – the cuts will automatically kick-in on December 31. Many corporations have postponed investment decisions to see what happens.

The uncertainty gripping the economy is matched by the certainty that more extreme weather events will hit the country. One meteorologist, asked how a storm a could do so much damage, ruefully explained that in addition to the full moon and high tides, Sandy itself had been driven off its northward course and onto the coast by two weather fronts moving on opposing paths. Crucially, rather than losing momentum the storm had picked up energy from the sea warmed as a consequence of the changing climate.

Earlier this year, scientists calculated that fossil fuel producers intended to extract reserves which would, by mid-century, generate carbon dioxide emissions five times greater then the level considered “safe” to prevent a 2 degree rise in global temperature.

So Sandy’s impact is just a small indicator of the much worse results we can expect to see if current economic, social and political relations are allowed to continue.

Priorities have to change if civilisation is to find a way forward. Capitalist logic, driving in two opposing directions, stands in the way of progress. A “return to growth” is essential for profitability, but overcapacity must be eliminated to make it possible. That’s why the wages of US workers are being driven down and the living standards of many Afro-Americans are lower than ever. Whoever wins next Tuesday, it won’t be the average American.

Gerry Gold

Economics editor

PFI albatross opens NHS up to private sector

The resource-draining Private Finance Initiative (PFI) foisted on public sector projects by New Labour is helping to create the conditions for the break-up and privatisation of the National Health Service.

The evidence is to be found in two reports over the last 48 hours – from a special administrator appointed following the financial failure of South London Healthcare Trust and today’s report from the Commons’ public accounts committee.

Yesterday, a special administrator recommended that South London Healthcare Trust should be broken up in the wake of its financial failure. The Department of Health should write off £207 million worth of debts built up by the trust driven to the brink of bankruptcy by PFI deals, the administrator said.

It should also provide up to £25 million extra per year to help continue pay for PFI deals. Two of the trust’s three hospitals were built under Labour using PFI funding. The trust plans to slash its workforce over the next five years, from 5,838 whole time equivalents in March 2012 to 4,755 in March 2016.

Administrator Matthew Kershaw said the money spent on PFIs accounted for around a third  of the trust's £65 million overspend in the last financial year. Nine bids had been made to take over the trust’s work. The private sector is ready to pounce, with bids from Virgin Care, Circle, Care UK, Capita and Serco already made.

The PFI albatross is dragging trust after trust into deep financial crisis, at a time when they are supposed to find £20 billion in “efficiency savings” (demanded by the previous government) and when the NHS is being reorganised by the ConDems to create market opportunities for the private sector.

Margaret Hodge, a member of the previous government and now chair of the PAC, presumably saw no irony in agreeing the committee’s report, which says:

“A number of trusts in financial difficulty have PFI contracts with fixed annual charges that are so high the trusts cannot break even. Paying these charges is one of the first calls on the NHS budget and the Department [of Health] is liable for supporting all PFI payments because it underwrites the Deed of Safeguard given to contractors. It already expects to have to find £1.5 billion to bail out seven trusts facing problems with PFI repayments over the remaining life of their contracts - equivalent to £60 million a year… The priority given to meeting PFI annual charges inevitably distorts priorities which is especially worrying at a time when resources are constrained.”

The rising cost of over 650 PFI projects hit £230bn this summer and won’t be fully paid off until 2048, according to a GMB union analysis of the latest Treasury data. Including the £44bn already handed over for PFI schemes up to 2009-10, the public purse will be hit with a total PFI bill of more than £270bn which is almost five times the value of the assets built (£56bn), says the union. “It means that British PFI debt is now equivalent to £9,300 per taxpayer. Annual payments are forecast to break the £10bn mark by 2017-18.”

The way that PFI contracts are framed puts them in a weak position when it comes to renegotiating deals, which can involve interest payments in double figures and exorbitant one-off charges just getting the contractor to change a light bulb. So trusts are locked into paying unaffordable PFI payments.

  

With another 20 or so NHS trusts in dire financial straits – despite an emergency £1 billion bail-out last summer – the private sector is licking its lips. The “failure regime” imposed on South London Healthcare is expected to be used at other trusts, with bids being taken for the continuation of services.

While PFI projects – under which contractors own the assets and lease them to the public sector – began life under the Tory government 1992-97, they were greatly expanded under New Labour by chancellor Gordon Brown. They were seen as a wheeze to build hospitals and schools on the never-never, without showing up as public spending, while giving the private sector a stake. The chickens have come to roost, however, and the NHS is being lined up for auction as a result.

Paul Feldman

Communications editor

Wanted: Real Utopias and real democracy

“Democracy has recently become extremely important and the key issue in politics.” You can count the political figures who say and mean that on the fingers of one hand. But that was the uncompromising message delivered by John McDonnell to Occupy London activists.

McDonnell is a rare breed in the shape of a Labour MP with principles and perspective. He had been invited to kick off a debate on democracy as part of the New Putney Debates, developing themes from the original debates in 1647 during the English Revolution.

This particular event, organised by the Real Democracy working group, had McDonnell pouring scorn on those who have claimed that the slow evolution of liberal democracy and its economic counterpart – capitalism - had culminated in the “end of history”, with the present system deemed the optimal form of the political voice of society. His alternative view is worth reflecting on:

“But then along came the economic crisis of capitalism. People woke up realising that they have no control over their lives and that governments cannot control the economic system and cannot supply the basic necessities of life. Unemployment and insecurity is on a scale not seen for a long time. My constituency office is now organising food packages for local people.

“We are at quite a crucial moment in our history. The idea of a system which is perfecting itself has failed. The debate now becomes fundamentally relevant to people as it did in the English civil war. People realised they had an opportunity to question and re-shape everything. Virtually every element of the establishment is now seen as exposed and corrupt. People are searching for alternatives and answers.

“It is a time to start envisaging real utopias, based on democracy.  We need to address the state and the economy and the links between the two. People have lost confidence in the state system we have and the politicians within it. Representative democracy is not the last word.”

A leading supporter of Occupy London responded that the last 30 years had led to a “society without power”. There was something fundamentally wrong and the problem was to animate people to do something about it.

Another raised the issue of globalisation and how it dominated economics and politics: can institutions such as the European Union, the International Monetary Fund, World Trade Organisation and the United Nations democratised or do alternative international institutions need to be created?

The irreconcilable conflict that led to the original Putney Debates was powerfully brought to life in a performance at St Mary’s church, Putney on the exact day and venue that they took place 365 years ago.

Actors Damian LeBas as Leveller and senior military figure Thomas Rainborough, Michael Edwards as Henry Ireton (Cromwell’s son-in-law)  and Dominic Golding as John Wildman (civilian and probably the author of the Agreement of the People) were outstanding in an 11-strong cast, directed by Natasha Langridge in a rehearsed reading of Caryl Churchill’s play, Light Shining in Buckinghamshire.

Earlier, speakers had brought out the inspirational significance of the English revolution, which, said one person, “everything in our political culture today tells us – ignore it, forget about it, it never really happened, and if it did it was only a minor insignificant event”.

Leveller demands in the Agreement of the People, seen as the basis for a new constitution, were far beyond their time and were rejected by the army grandees. But the fundamental thrust of their arguments about suffrage and natural rights were to re-emerge in centuries to come.

A contribution from A World to Win proposed a contemporary form of the Agreement to open up “a new page in democracy that would have to go hand and hand with a social revolution in terms of ownership and control of land, the economy and finance.”

The New Putney Debates have opened the doors for a wide discussion on different approaches: “make and mend”, regulation within the existing institutions or a revolutionary change. The Revolution Will be Networked assembly on November 17 will take up this challenge.

Corinna Lotz

A World to Win

The Levellers' light shines on

Some 365 years ago this weekend, soldiers known as “agitators” and their civilian supporters, sprang a political surprise of historic proportions. They openly challenged the leaders of the New Model Army about the future direction of the English Revolution.

Charles I, who had provoked a civil war against Parliament which had gone on for five years, was the army’s prisoner. Oliver Cromwell was still searching for a compromise with the king, whereby Charles would remain as a figurehead, constitutional monarch.

The agitators, elected representatives to an Army Council, wanted none of it. Influenced by a political organisation dubbed the Levellers by their opponents, the rank and file demanded a republican constitution – without the monarchy or the House of Lords.

And they set out their demands in what they called an Agreement of the People and produced it like a rabbit out a hat at the Army Council that opened in St Mary’s Church, Putney, on October 28, 1647. Dominating the Putney debates, which went on until November 8, was the demand for the extension of the franchise.

The Agreement also raised for the first time the question of natural rights – those that come with being a human and not from the state. It put at the top of the agenda the rule of law and the independence of the judiciary. The Agreement suggested that power lay with the people and that parliament was subordinate to them.

The Agreement spread like wildfire throughout the army. John Lilburne, a leading Leveller also known as “freeborn” because he advocated natural rights, inspired a second version which was due to go before Parliament in January 1649. But this was overtaken by the decision to put Charles I on trial for treason against his people. The king was executed at the end of January. England became a republic. Monarchy and the House of Lords were abolished.

Within a few months, Lilburne and his supporters were themselves under arrest for treason. They published a third version of the Agreement in May 1649, smuggling it out of the Tower. Within a few weeks, a series of mutinies in the army saw many regiments adopt the Agreement and denounce Cromwell. The mutiny was put down at Burford in Oxfordshire and the Levellers crushed.

What can we learn from struggles and debates almost four centuries old? Surely, it is that the breakdown of power and state relations between classes is an opportunity to find new democratic solutions. The Levellers showed that is possible to win support for a constitutional settlement that is revolutionary and looks to a future that does not yet exist.

Also significant is the fact that a revolutionary political settlement cannot be achieved through compromise. Although the Levellers did not succeed, the revolution was required to establish the triumph of parliament over absolute monarchy which, despite the restoration in 1660, remained the case.

The English Revolution was made on behalf of an emerging new capitalist class. The gentry, financiers and the big merchants held in check by the crown’s control over the economy and politics. They did not engage in civil war to share power with those below. Attempts by the Levellers to persuade Cromwell, the Grandees and Parliament to adopt the Agreement were doomed to failure.

Although the principles of the Agreement were eventually implemented in the American and French revolutions (with the US constitution referring to “self-evident” truths and “certain unalienable rights”) of the late 18th century and in Britain by 1867, the issues arise in a new way.

The representation the Levellers demanded has long been won. But the power remains elusive and out of reach. The present state is undemocratic and a pawn of corporate interests. An Agreement for our century is needed that looks forward to a new page of democracy.

* The New Putney Debates sponsored by Occupy London’s working groups are getting under way. Sunday’s events are devoted to the English Revolution and features Caryl Churchill’s play Light Shining in Buckinghamshire about the civil war. And on November 17, an assembly will be held in London to work on an Agreement of the People for 2012.

Paul Feldman

Communications editor

Fossil fuel warriors in charge of ConDems energy policy

As the first cold blast of winter heads down from the Arctic, more than five million UK households cannot afford to heat their homes to the standard required for good health and comfort.

And now that the unscrupulous cartel of big energy corporations has slapped a 9% increase on fuel bills – the average bill is now over £1,300 – the number of people in fuel poverty will soar.

David Cameron talked big at his Party’s conference, claiming the government would force the energy giants to offer customers the lowest price tariff but now rushes to change his tune. The best the Coalition can offer is a letter from the supplier telling the customer what their lowest – but still  unaffordable – tariff is.  

UK governments of all stripes have consistently refused to regulate for high energy efficiency leaving the market to decide. The result is most houses being built in the UK even today, wouldn’t get off the drawing board in Scandinavia.

The much proclaimed Green New Deal replaces the former grant programme with loans at high interest rates offset by small amounts of cash back for measurable energy savings. The paltry sum set aside is £200m - £125 will go for loans and £25m on publicity. It will be used up in about three months.

The truth is Cameron’s “greenest ever government” has been taken over by the dirtiest fossil fuel warriors.

Owen Paterson, the new Minister for Energy, is a climate change sceptic who described the potential for gas fracking as "one unexpected and potentially huge windfall". His policy advisor is a former lobbyist for the Australian fossil fuel industry.

Ian Taylor, boss of energy trader Vitol, gave the Tories more than £500,000. Viton is a major shareholder in companies involved in hydraulic fracturing (fracking and coal bed methane extraction, another dirty business.

Lord Browne, the former chief executive of BP is a government energy adviser. He is chairman of Cuadrilla, the UK’s main “frackers”, and is on the board of North Sea deep water oil explorer Riverstone.

Cameron’s new advisor on energy policy is Ben Moxham, who worked for Browne at BP and Riverstone.

Vitol is a major shareholder in Dart Energy, which will soon begin coal bed methane extraction at Airth, on the River Forth. This filthy technology will start with 22 CBM wells but as many as 600 could be on the cards. It is just “the beginning of a nightmarish industrial transformation for the UK as a whole”, says Elsie Walker of campaign group Frack Off.

Do you get the picture? Energy policy in the UK is being written by the fossil fuel industry, in its own profit-driven interests and has nothing to do with keeping consumer prices low or tackling climate change.

The government argues that getting at new sources of fossil fuel is essential to keep prices down. But the exact opposite is the case.

Systems such as “fracking” or coal bed methane capture or tar sand extraction, are only now economic (profitable) because of the rising price of gas as easy to access supplies run out. When gas was plentiful and cheap, they were not viable.

A recent report from IMF on the future of oil notes that keeping oil production going at current levels will bring about a doubling of the cost in the next decade. The report speaks of “economic peak oil”, a point beyond which importer economies cannot sustain production and there is runaway inflation.

The IMF calls it a "shock" that will have "large and persistent" macro-economic effects and it calls on governments to invest heavily in alternative energy sources.

But these arguments will fall on deaf ears because government energy policy is about the corporations and the profits.

This winter, more than 20,000 people in the UK will die from cold and many more become ill or get into debt. It is time to put all energy resources into a new commons and end the corporations’ right to profit from such misery.

Penny Cole

Environment editor

Young people victims of an uncaring state

The British establishment, the state and its institutions, the media – none of them really give a damn about young people. And if they say otherwise, they’re lying. That’s the conclusion not only from the Jimmy Savile scandal but an investigation into the deaths of children and young people in prison too.

If the BBC had really been concerned about Savile’s predatory behaviour on and off their premises, they would have acted. But Savile was made into a household name by the BBC and they weren’t going to give that up. So while Savile’s abuse of young children was the talk of Fleet Street, inaction was the word. It was a case of the BBC will fix it.

The same goes for the police and the tabloid press. Clearly, the victims were disbelieved from the off. It makes you wonder whether Savile was part of a much larger ring of predators, including establishment figures, who took advantage of vulnerable children.

Virtually all of Savile’s victims are alive. Which is more than you can say about
Joseph Scholes, a 16-year-old boy who killed himself at Stoke Heath Young Offender Institution in 2002. His mother Yvonne Bailey says her son “died in fear and distress hanging from the window bars of his squalid cell in a children’s prison”.

There were widespread calls made for a public inquiry following his death. That inquiry never took place and since Joseph, nine children and 191 young people aged 24 and under have died in prison or, in the case of two of the children, imprisoned in a secure training centre.

A new report by INQUEST and the Prison Reform Trust says that the inquests and investigations into deaths between 2003 and 2010 reveal that they were often very vulnerable and that none received the level of support and protection they needed. Or deserved, one could add. Fatally Flawed: Has the state learned lessons from the deaths of children and young people in prison? says:

“Often overlooked and neglected in a regime that does not differentiate between young adults and adults, there is little institutional understanding of, or attention to, their specific needs.”  It found that the children and young people who died:

• were some of the most disadvantaged in society and had experienced problems with mental health, self-harm, alcohol and/or drugs;
• had significant interaction with community agencies before entering prison yet in many cases there were failures in communication and information exchange between prisons and those agencies;
• despite their vulnerability, they had not been diverted out of the criminal justice system at an early stage and had ended up remanded or sentenced to prison;
• were placed in prisons with unsafe environments and cells;
• experienced poor medical care and limited access to therapeutic services in prison;
• had been exposed to bullying and treatment such as segregation and restraint;
• were failed by the systems set up to safeguard them from harm.

“Our findings indicate there have been failures in how the state treats children and young

people in conflict with the law and that the learning and recommendations from inquests

and investigations into previous deaths have not been properly implemented.”  

Lest anyone forgets, the BBC is part of the establishment too. Its so-called independence from the state is more fictional than real. The BBC’s one-sided coverage, from the struggles of Palestinians to strikes and protest actions at home, is self-evident.

There is a stench of decay throughout Britain’s dominant institutions, which the right wing will take advantage of. Tories will use the Savile saga to raise the question of ending state subsidies for the BBC through the licence fee and open up the corporation to commercial challenges from the likes of Murdoch. And we all know how honest, transparent and objective his news empire is.

A thorough-going democratic transformation is absolutely essential to halt a descent into a deeper authoritarian-corporate rule. That’s why a number of groups are backing the November 17 assembly with the aim of developing a new, rights-based, people’s constitution.

Paul Feldman

Communications editor

End of mining boom hits Australia hard

Way back in May – a whole five months ago – the Honourable Wayne Swan MP, Deputy Prime Minister and Treasurer of the Commonwealth of Australia was full of confidence.

Delivering his budget for 2012-13, after 21 years of continuous growth and four years of budget surpluses he felt cock-a-hoop. “In an uncertain and fast-changing world, we walk tall — as a nation confidently living within its means,” he said. 

His budget was going to “to share the tremendous benefits of the mining boom with more Australians”.  His message couldn’t have been more reassuring: “Tonight we make a forceful statement that ours is one of the world’s strongest economies and fairest communities. Not even a sovereign debt crisis in Europe or unprecedented natural disasters here at home could deny Australia this substantial achievement. The deficit years of the global recession are behind us. The surplus years are here.”

Whoopee!

And now? In October? It’s over.

Swan’s confidence derived from the Australian mining boom, itself the product of a 10-year credit-funded commodities “super-cycle” that saw demand and prices soaring to unprecedented levels. Most of the demand came from China’s resurgent economy.

China’s steel production grew to seven times more than the UK and the US combined, and accounts for nearly half of global output. The country’s share of global imports of iron ore, a crucial ingredient, has increased from less than 10%   in the early 1990s to about 65% now.

But China’s annual growth rate has been slowing consistently. Now it’s down to 7.4% and there’s nothing to stop it dropping like a stone. In response to slowing demand from China, prices of commodities such as iron ore, copper and coal have fallen dramatically this year.

This is already having an impact on the economies of Australia, Brazil, Indonesia, parts of Africa and other exporters.

Since the start of July, the price of iron ore, Australia’s most valuable export, has fallen by more than a third to $87 a tonne, while the price of thermal coal at $100 a tonne is just above a two-year low.

As a result mining, companies are scaling back their expansion plans in Australia. This month, BHP Billiton, the world’s biggest mining company by market value, shelved Australian projects worth more than A$30bn, blaming weak commodity prices and rising costs.

Ric Deverell of Credit Suisse says the prices of iron ore and other commodities could fall in the long run below their current levels. “The ingredients are building for a train wreck. I think [iron ore prices] are more likely to be $70 in 2015 than $150.”

Guess which figure Swan used to make his budget forecasts? Now he’s working out how to minimise a looming budget deficit and like everyone else, the Australians are staring austerity in the face.

The impact of China’s slowing economy doesn’t just affect Australia’s mining industry. It reverberates around the world. Loudly.

Maybe it was the trigger that persuaded the International Monetary Fund to launch its emergency Chinese lantern into the stratosphere in August. The Chicago Plan Revisited  examines claims that, by eliminating fractional reserve banking you could, according to one commentator, “eliminate the net public debt of the US at a stroke, and by implication do the same for Britain, Germany, Italy, or Japan.”

Dream on. The proposal didn’t fly in the 1930s, and it won’t fly now.

Why? Because the key to the global crisis for the defenders of capital lies not in eliminating debt in the financial system – which does indeed have serious problems to contend with – but in the real economy where the slump is unstoppable.  

The contraction of the global economy has a momentum all of its own, driven on by the surplus of capacity and commodities created by the credit-induced boom. Sure, the financial system needs total reconstruction. So does the economy because production for profit is ultimately destructive. Sleight-of-hand tricks like those coming out of the IMF belong in the fantasy world of magic, however.

Gerry Gold

Economics editor

Octavia Hill's housing dream turns into a nightmare

Yesterday the great and the good unveiled a memorial in Westminster Abbey to commemorate social reformer Octavia Hill, who died 100 years ago. A pioneer thinker and campaigner, she worked to promote the idea of a collective form of property ownership.

Land and buildings of special beauty, she insisted, should be held in trust, on behalf of the nation, inalienably and in perpetuity. This proposal was enshrined in the 1907 National Trust Act.

But Hill did not confine her concerns to aesthetic issues. She saw how private landowners and the demand for profit rode roughshod over places of beauty as well as the lives of millions of workers forced to live in conditions of squalor. With critic John Ruskin, Hill set up social housing schemes to provide homes for some 3,000 tenants in London.

The 20^th century was to see the rise of mass municipal housing schemes which constituted an alternative to the commercial market. But today, decent social housing has virtually become a thing of the last century.

The glaring problems that Hill addressed, rather than being resolved, are worsening. The National Housing Federation, which represents housing associations providing accommodation for some five million people, reports that a major housing crisis in England and Wales is set to worsen rapidly.

One in 12 families in England is currently waiting for social housing, while homelessness has risen by 26% over the last two years. Social housing stock has plummeted over the last decades as rents and property prices continue to soar.

The cost of privately renting a home has gone up by 37% over the last five years. The result is that 417,830 families presently depend on housing benefit to help them pay private rents – an increase as the NHF points out – of 86% in only three years.

Rising housing costs have a disastrous impact on the lives of millions of people, especially young families. Incomes have not kept up with housing costs with the result that increasing numbers of people who in employment need to claim benefits just to keep a roof over their heads.

A market analysis by Oxford Economics shows that social and public house building is dwarfed by the commercial market: 72,876 new homes were built by the private sector, 43,164 by housing associations and a mere 1,830 by local authorities in 2011-12.

The future is equally gloomy. House prices and rents are forecast to show steep increases. Private rents – already unaffordable for many – could be some 27% higher by 2017.

Perhaps the most shocking reality is the contrast between house prices, rents  and earnings. London heads the list. The average house price in London in 2011 was a staggering £421,395. For a 75% mortgage you would need an income of £90,299 per year plus a substantial deposit. Not too surprisingly, the lowest house prices are in the North-east – one of the most deprived, high unemployment areas of England.

Amongst other proposals, the NHF calls for the government to release more public land for building by housing associations and to invest in more social housing.

But is building on brownfield sites what is likely to be low quality housing while huge numbers of properties stand vacant or need upgrading really the way to go?  Such measures can only be sticking plaster on a huge festering wound. A revolutionary housing policy is needed to end the recurring misery of homelessness, overcrowding, soaring rents and exploitative landlords.

The right to affordable housing must be worked for side by side with, as Octavia Hill foresaw, the protection of open spaces for the appreciation of all. The fight for a social right to decent housing will be central to the creation of an Agreement of the People, which will begin in London on November 17.

Corinna Lotz

A World to Win secretary

How we can move beyond resistance

Everyone joining tomorrow’s anti-austerity march in London called by the Trades Union Congress should take heed of what is happening in Greece if we are going to find ways to move beyond resistance to the deepening crisis.

The Greek trade unions this week held their 20^th one-day general strike in two years against the absolutely savage cuts in living standards imposed by governments of the left and the right, as well as coalition regimes.

Regarding the strikes as short-lived protests, the Greek state is standing firm on behalf of the International Monetary Fund, the European Central Bank and European Union governments – the infamous Troika.

Their riot police are working hand-in-glove with the fascist Golden Dawn to protect the authorities as society edges towards breakdown. Only just in the background stands the Greek army, whose colonels are not averse to staging military coups and taking power as they did from 1967 to 1974.

Despite the widespread hatred of the measures that have reduced many Greeks to penury – to the point where many can’t even afford to bury their dead or obtain vital drugs – the misery is scheduled to worsen, with further pay and pension cuts. One in four are already out of work and job losses are continuing.

Britain’s situation is not like Greece’s, you could argue. But that would be a superficial view. Greece is at the sharp end of a global crisis of capitalism that is driving policy making in every single country.

The crash that began with the credit crunch in 2007 is on the verge of a new and more explosive phase. The major economies – including China’s – are awash with debt, built up to generate the growth bubble of the first years of the century. Most of this debt will have to be written off, creating more unemployment, driving down demand and reinforcing the shortage of credit.

 

In Britain, government debt is spiralling despite the ConDems’ austerity cuts, wage freezes and pension reductions. A record number of people are working part-time, on very low wages, because they can’t find a permanent job. Cuts in welfare are only the start of what is on the agenda.

So what should we fight for? For policies that are designed to boost “growth” because the ConDems have “got it wrong” and are making matters worse? This is the approach of the TUC and it is muddle-headed and actually a waste of time.

There is a global recession and the capitalist production system as a whole is a disaster zone. The contraction that is taking place is the inevitable response by corporations, banks and states – the corporatocracy – to the end of a fictional boom. Production for profit has led to destruction to sustain profits.

Whoever is in government would more or less do the same. Labour-led councils are making the cuts on behalf of Whitehall while Labour is pledged to cut the deficit were it in office. Not only that, Ed Miliband’s response to rising train and energy costs is to – wait for it – improve the way capitalist markets work! So holding on for a government that believes in “responsible capitalism” is self-evidently no solution.

The system is broken, economically, financially – and politically. The time is right to move beyond it, beyond resistance. Capitalism, its state, our cosmetic democracy are surely not the last word in the story of human endeavour.

A new, democratic framework could win popular support and offer an alternative to marching from A to B in protest. On November 17, a number of groups are supporting a working event to start to produce a new constitutional settlement, one which is rights-based and transfers power to the majority in an Agreement of the People. Do your best to be there.

Paul Feldman

Communications editor

The China Syndrome in your food

The dust is only just settling on the worst food poisoning scandal in German history. Earlier this month, 11,000 children attending some 500 schools in five east German states were poisoned by strawberries grown in China’s Shandong province.

The Chinese authorities still deny that the 44-tonne shipment of strawberries which entered Germany through Hamburg docks was contaminated. But both   the centre for disease control, the Robert Koch Institute, and German federal authorities have confirmed that frozen strawberries from Shandong were the source of the norovirus bug which caused the gastroenteritis outbreak.

Investigations by Der Spiegel journalists have pieced together the chain of cause and effect behind the affair – and how it could easily happen again, not only in Germany, but anywhere.

In the search for cheap school meals, the authorities in the former East German states turned to the French global food services corporate Sodexo which employs 380,000 people worldwide. It is by far the largest school catering company in Germany.

After German unification, Sodexo invested heavily in disused company cafeterias. One in the city of Halle operates next to a former paint and varnish plant and chemicals are still stored near the kitchens.

In the race to the bottom by local authorities in search for the cheapest possible tender for school meals, Sodexo became sector leader. They produce meals at for a mere €1.55 each in 65 kitchens which supply 200,000 school meals per day. Wages are extremely low according to the NGG catering staff trade union. (In the US, actor Danny Glover got arrested in 2010 supporting Sodexo workers in Maryland.)

Of course, the raw materials for school meals at this price must be sourced from the cheapest sources – and where better than from China? China’s food exports have doubled in recent years with Germany importing €1.4 billion worth. China currently supplies over 80% of world garlic sales. It is the world’s largest exporter of honey and has moved into the global salmon and pizza markets.

But there are huge quality issues. So far in 2012, European Union authorities have received 262 reports about contamination of Chinese food products. Chinese researchers working for food safety have raised similar concerns. In 2008 300,000 Chinese infants were harmed by chemical additives to milk and baby formula products. Food science authority Wang Shiping has pointed out that this was only one of a number of sophisticated methods of fakery, which run ahead of regulators and consumer watchdogs.

In 2007 the former head of China's state Food and Drug Administration, Zheng Xiaoyu, was executed for corruption – a scapegoat to show that authorities meant business. Food safety advocate Wu Heng has recently created a website called “Throw it out of the Window”, which highlights food scandals. Even bigger than the additive problem is the excessive use of toxic pesticides and anti-biotics for animals.

Zhou Li, a university lecturer in Beijing, says that Chinese farmers do not eat the food that they produce for the market, preferring that grown by traditional methods. Government bureaucrats and the wealth have their own plots of land so that they can produce food for themselves.

But the Chinese do not have a monopoly on the class divide in food. In the rich town of Constance in Baden-Wurtemberg, for example, subsidised school meals cost €4.50 and are 40% organic. In the eastern state of Thuringia there is a €2.30 limit on school meals and parents have to pay the full cost.

The class divide in food in the UK is equally sharp, as Jamie Oliver amongst others has shown. Whether you live in China, Germany or the UK,  if you have money and time to research where the food on your table comes from, or can grow your own under controlled conditions, you might - just - be able to eat healthily.

But escaping from the corporate drive for profits from food must not remain the privilege of the few. Looking after our shared home earth and our nutrition is not a luxury but a necessity.

Corinna Lotz

A World to Win secretary

Leaving cloud cuckoo land

The International Monetary Fund is amongst the most influential institutions on the planet. It has a membership of 188 countries and employs 2,400 staff. Half of them are economists. If anyone should know about the state of the global  economy and its likely trajectory, you might think it was the IMF.

But you’d be wrong. The IMF has just had to “revise” its growth forecasts downwards, not for the first time. Fear not, Britain has its own forecasters. But they’re no better.

The Office for Budget Responsibility was created by the Coalition in 2010 to provide as its website proclaims “independent and authoritative analysis of the UK’s public finances. It is one of a growing number of official independent fiscal watchdogs around the world”.

It too got it’s forecast wrong. Badly. And now it’s own up time.

In its latest Forecast Evaluation Report, the OBR says: “Following the Coalition’s first Budget in June 2010 we forecast that the recovery would be slower than its predecessors, but nowhere near as slow as it has been. We forecast that GDP would rise by 5.7% from the first quarter of 2010 to the second quarter of 2012, but the latest data suggest it has grown by only 0.9%.”

Ask virtually anyone on the street whether the economy is going to improve and they’d give it the thumbs down. Nothing could be more obvious.

How is it that these highly paid experts got it so wrong?

Are they, perhaps, living in cloud cuckoo land, in “an unrealistically idealistic state where everything is perfect”? Are they perhaps unaware of reality or deranged in holding such an optimistic belief’?

The truth is the OBR, like the IMF, is collectively blinded to reality by the views held by all in common and expressed recently by an eminent political figure, who said: “21st-century politics is, in fact, increasingly post-ideological. The biggest challenges we face are similar in most countries: growing our economies in a way that creates opportunities for everyone, providing high-quality health and education services, ensuring safety and security.”  [my emphasis]

This was former New Labour prime minister Tony Blair in a collection of essays on  "Government for New Times”. The extract is from the first of five lessons Blair claims to have learnt from his period as PM. It’s not surprising that Blair remains wedded to the growth that has brought the planet’s ecological systems to the limits of their ability to support life.

But you might find his second lesson a bit of a shocker: "The second lesson is that you have to aim for systemic change. The pace of change in the modern world is incredible, with the emergence of new powers, such as China, India, and Brazil; new technologies in communications, energy, and medicine; and new global challenges like climate change and the financial crisis. Only systemic change, as opposed to incremental or piecemeal reform, will allow government to keep pace in a rapidly changing world.”

Has Blair suddenly become a revolutionary?

We might even agree with his third lesson that “the best systemic change and delivery begins with the right conceptual analysis”. But Blair, the IMF and the OBR share the same foundational concept held by the 1% – there is no alternative to the capitalist system of production.

And they’ll do anything to preserve it. Like destroying the productive infrastructure of Iraq, and causing the death of more than 1 million people in order to give contracts to the oil corporations for its reconstruction and exploitation.

Or driving down living standards, cutting public services and reducing real wages in Europe and North America to compete with emerging powers.

These are the kinds of things that Blair and his co-thinkers mean by “systemic change”.

Real system change requires new forms of democratic ownership and control, a switch from production for profit to sustainable production to meet socially-determined priorities and the removal of the political elites that act as proxies for corporate power. We need, therefore, an Agreement of the People, a constitution that puts the majority in charge. Please come to the assembly on November 17 to work on this very strategy.

Gerry Gold

Economics editor

Irish people lose out when it comes to oil finds

Let the good times roll (again). Recoverable oil has been found in two areas around the Irish coast. A valid excuse for the Irish to don stetson hats and adopt a smug swagger perhaps?

It is after all the first time, after many years of prospecting, that a well has been discovered which is, in the words of Tony O'Reilly, chief executive of Providence Resources plc, “a huge success which has exceeded expectations”. The Ballyroe well contains about 280 million barrels worth of oil.

In terms of discoveries this is tiny. Global output/demand is around 85 million barrels per day, so 280 million barrels is small fry. It will no doubt provide a decent income but for how long? So  maybe not really a good enough reason for ten gallon hats and cigars just yet.

This too seems to be the jaundiced opinion of people around Cork city and county to the Ballyroe find. After too many “false dawns” and the abysmal record of various Irish governments in making the most of such natural resource finds as there have been, people are understandably sceptical. “Our oil and gas may as well be off the coast of Brazil for all the good it will do us,” was one weary opinion.

The truth of the matter is that however large or small the latest find actually is, and some estimates put the find of recoverable oil at over a billion barrels, the people of Ireland have benefited not at all from previous exploitation of these kinds of discoveries.

Contrast with Norway, a country that can bear some comparison with Ireland in terms of population, with an agricultural heartland, a fairly comparable colonial history and also historically poor with a legacy of emigration. Over the course of the latter half of the 20^th century, Norway has pulled itself out of poverty to become the second most prosperous country in the world, while at the same time managing to achieve an enviable record of economic and social equality.

The difference? It has made sure that income from its huge oil reserves has been paid into the exchequer and used for the good of Norwegian society as a whole. 

Not so the government of Ireland which has altruistically simply given it all away! The tax rate is so low as to amount to an almost Christ like degree of charity. It is not certain that Christ would entirely endorse a policy which lines the pockets of a few and enrich the likes of Exxon and Shell, however.  

To the delight or consternation of various strands of opinion, a well has also been discovered 10 kilometres off the coast of South Co. Dublin near to the well-heeled village of Dalkey. The same exploration company is involved – Providence plc.  A similar future will no doubt unfold.

The oil will be brought ashore and refined elsewhere. It is not even certain that any work would be provided to Irish workers in its extraction. It is also as unlikely that environmental considerations will be taken into account. The consequences of a spill so close to Dublin Bay would be disastrous for instance.

All this is not without precedent, the very long-running Shell to Sea controversy provides an instructive example. The profits from the gas currently being extracted by Shell from the Corrib sea-bed off the west coast of Ireland are repatriated and the destruction of the farm lands and delicate eco-systems of the region is the only legacy of the local people.

There could be demands that the Irish government tear up all the past agreements and adopt the Venezuelan model. Indeed, such demands have been made, but so far have fallen on deaf ears and are not likely to be seriously considered. However, even that is to expect that business will continue more or less as usual.

The wider global issue is of course our continuing failure to use the opportunity of the crises that face us, climate change and resource depletion among others, to constructively re-think our entire relationship to oil and other fossil fuels and to adopt sustainable methods of energy use for the good of all our futures.

Fiona Harrington

Scots need a people's constitution, not an SNP one

The deal struck between Edinburgh and Westminster to hold a single question referendum on independence in the autumn of 2014 should not obscure the fact that the needs of ordinary Scots are secondary to this political manoeuvring.

Even though it seems most Scots would like to have the option of greater devolution as an alternative to independence, this will not be on the ballot paper.  The Tories, who have no support whatsoever in Scotland, want the electorate to face a stark choice – “in or out”. Labour supports that position.

The big three parties are united on the need for a strong, united British state –  not for the benefit of the people, but as part of feverish attempts to hold the crumbling economy together.

The big question facing people in Scotland is not “do we want independence from England” (a completely inaccurate and historically wrong formulation) but what  kind of society do we want? What kind of economy, what kind of politics, what kind of life for the people? And these are the same questions that face people everywhere, in this unprecedented economic and ecological crisis.

None of these questions will be on the ballot paper, nor raised by Scottish National Party. The SNP makes the right to self-determination of the Scottish people synonymous with a crude nationalism that masks its reactionary policies.

The referendum campaign presents a massive opportunity to build something genuinely new and independent and we should not let it pass us by. We should refuse to spend two years as onlookers as they haggle over a constitutional settlement that will still put the needs of the corporations above the needs of the majority.

The argument put forward by some on the “left”, that if we get independence within the framework set out by Salmond and Cameron, that will somehow strengthen the power of the people for the future is unbelievable.

How would a Holyrood Parliament organised on the same lines as its counterparts in Spain, Portugal, Greece and Ireland save us? And if an independent Scotland is still using the pound, as SNP leader Alex Salmond says it would, then the Westminster Treasury would still call the shots on spending, interest rates and borrowing.

For the next two years the SNP government and local councils of all stripes will go on cutting health, education and the voluntary and community sector. They will destroy further education colleges and oversee rising youth unemployment and destitution for families.

Whatever their disagreements over independence, all the parties agree there is no alternative to this. Labour in Scotland wants to remove universal benefits not enjoyed elsewhere in the UK right now. The SNP wants to keep them as a kind of bribe.

But for independent thinkers, the question is why are these benefits not rights? Why do people not have the right to work, to adequate food, to a home, in our rich country? Why are these subject to degrading rules, and dependent on whether capitalism decides to afford them or not?

If we are really talking about an independent future, let’s plan for a society where dependence on benefits is eliminated, where everybody participates and in return receives a share of the collective wealth that is enough to live well.

Salmond’s top priority for a post-independence constitution is keeping Scotland in NATO. We should develop a constitution that rejects NATO and its corporate-sponsored wars.

All Scotland’s politicians and businessmen want the corporations to drill for oil in deep water off our coast, and they support more open cast mining. We should demand an end to fossil fuel burning and a rapid transition to renewables. Let’s plan to place all land and sea in Scotland into a new commons, where it can be used for the benefit of all.

Those who want to bring about such real, fundamental changes should get together and write a people’s constitution. Then we can support and promote local initiatives that build into a network of democratic People’s Assemblies – in Scotland and beyond – striving for real political change. That would give real meaning and a modern content to the right to self-determination.

Penny Cole

What passing-bells for these who die as cattle?

So the ConDem coalition is to spend £50 million on marking the centenary of the outbreak of World War One. But the flag-waving nationalism that will surely surround the events will with certainty obscure the truth about the first global conflict.

The Coalition can find millions while it is savagely cutting public services for entirely political reasons. In 2014, we will be a year away from a general election and in the countdown to a referendum on Scottish independence scheduled for the same year.

Contrived nationalism will be used to push the myth of the “One Nation” that both the Tories and Labour are fighting for copyright over, in a beauty contest of patriotic virtues that will churn the stomach. Scotland’s right to self determination will be viewed with abhorrence in the same way as those who opposed World War One were condemned as traitors.

The 900,000 British soldiers who were killed, the 1.6 million maimed and the many millions more from other countries who perished, were victims of a war not of their making and fought not in their interest.

This shocking waste of life needs to be remembered and honoured – but not in the sickening and hypocritical way that politicians from the major parties and the establishment do. They still can’t even look after their fallen or wounded troops, who have to rely on charity and the proceeds of poppy sales.

We need a memorial that spells out the truth, which explains that those who gave their lives or were wounded were cannon fodder for the ruling classes in each country. Propaganda would have it that it was the “war to end all wars” and fought for British democracy against the “tyranny of the Hun”.

In reality, it was an imperialist war fought over the division and redivision of colonial spoils, with the challenge of Germany to Britain’s empire and industrial might the principal cause.

As 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 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.

World War One was followed in a short period by recession and the Great Depression, leading directly to a resumption of hostilities in 1939 in another capitalist conflict.

The same fundamentals that produced these two world wars are still present. The global economy is on the verge of a slump greater than the 1930s. Capitalism remains an irrational system that is driven to destroy its rivals, as well as a large portion of what has been created. The fall-out from the financial crash is building into a tsunami that has alarm bells ringing from London to Washington.

Wilfred Owen, the war poet, was killed a week before the ceasefire (right up until the last minute, until the 11a.m armistice, generals were sending troops over the top to die) and his words are more honest than those who claim to speak for the fallen. In his Anthem for Doomed Youth, Owen wrote:

What passing-bells for these who die as cattle?
Only the monstrous anger of the guns.
Only the stuttering rifles' rapid rattle
Can patter out their hasty orisons.
No mockeries now for them; no prayers nor bells;
Nor any voice of mourning save the choirs, –
The shrill, demented choirs of wailing shells;
And bugles calling for them from sad shires.
What candles may be held to speed them all?
Not in the hands of boys but in their eyes
Shall shine the holy glimmers of goodbyes.
The pallor of girls' brows shall be their pall;
Their flowers the tenderness of patient minds,
And each slow dusk a drawing-down of blinds.

Distributing his works and those of other war poets to every household would be a much more suitable way to mark the centenary of World War One.

Paul Feldman
Communications editor

A billion hungry people victim of land grabs

The World Bank is one now of the world’s leading land grabbers, channeling aid and loans into projects which force people off land they have used for generations. One of the results is a dramatic rise in food prices and global hunger.

Since 2008, when the World Bank put a modest monitoring and a complaints procedure in place, communities saying investments have violated their land rights have brought 21 formal complaints. Internal monitoring found that people were forced off their land in 30% of the projects the World Bank funds – that’s around one million people in total.

The World Bank’s investments in agriculture have tripled in the last decade from $2.5bn in 2002 to $6–8bn in 2012. But this investment is not aimed at easing hunger or poverty.

Rather it is simply bankrolling governments to get involved in the global market in land. Private investors and governments dedicated to carving out a toehold for their own elite in the world capitalist market are the beneficiaries.

A case in point is Cambodia, where mass removals of people from their land have brought protests, and ruthless government repression, including assassinations of campaigners and journalists.

This week 71-year-old broadcaster Mam Sonando was jailed for 20 years because his Beehive Radio supported land rights. The trumped-up charge was one of “inciting rebellion”. Security forces stormed a village in May after local people resisted the sale of a land to a corporation.

“Not a shred of evidence has been submitted in court that proves any connection between Mam Sonando and these bogus charges,” said Ou Virak, president of the Cambodian Centre for Human Rights, calling the verdict “embarrassingly unsophisticated and brazen.”

Reluctantly, the World Bank has frozen loans to Cambodia, after the government refused to say how it would meet the needs of displaced people (not that people shouldn’t, in principle, be displaced you understand – the World Bank accepts that kind of “collateral damage” if some gesture is made at resettlement).

So now the Cambodian government says it will halt land deals for the time being – but as 63% of all available land in Cambodia has already been passed on to private companies, there can’t be much left to deal.

A report published by Oxfam into investment in agricultural land by foreign interests found that between 2000 and 2010, 60% was invested in developing countries with serious hunger problems. Two-thirds of those investors plan to export everything they produce.

“In the past decade an area of land eight times the size of the UK has been sold off globally as land sales rapidly accelerate. This land could feed a billion people, equivalent to the number of people who go to bed hungry each night. In poor countries, foreign investors have been buying an area of land the size of London every six days,” the report says.

Oxfam estimates that 60% of land deals in the past decade are either being used to produce bio-fuels or left idle as investors wait for the price to rise. This land could have fed one billion people. To complete the vicious circle, those countries where the land grab has been most extensive, are also those suffering the biggest food price hikes.

Sub-Saharan Africa has had the highest increase in maize prices – for example 113% in Mozambique, and 47% in Malawi. These reflect poor local harvests, rises in world prices, combined with general inflation. The wheat price rose 27% in South Africa, 15% in Sudan, and 14% in India. These are higher price increases than in the major producer countries where drought has reduced this year’s crop.

And just to underline the market-driven nature of the food crisis, there have been big increases in the price of rice, in spite of this year’s plentiful harvest. The internationalisation of rice exports raises prices in local, more traditionally rice-dependent and producer countries. In India and Pakistan for example, rice prices are 30% higher than a year ago.

Land grabbing, aided by the World Bank, is about making profit while large parts of humanity go hungry. Capitalism is truly an obscene system.

Penny Cole

Environment editor