Big Pharma makes you sick

The fact that the UK government alone wasted £473m on a drug for flu that works no better than paracetamol is an expensive example of how Big Pharma can actually harm your health at the taxpayer’s expense rather than improve it.

A lack of expertise at government level, corporate secrecy and media scaremongering combined to induce panic-buying of the drug Tamiflu by the state from 2006 onwards. At the time, some were predicting that a pandemic of bird flu could kill up to 750,000 people in Britain.

The drug was widely prescribed during the swine flu outbreak in 2009. Tamiflu was stocked by 96 countries and got on to the World Health Organisation’s list of essential medicines. Manufacturer Roche were laughing all the way to the bank. Last year the world’s third largest drugs company with revenues last year of over $52 billion.

At most, a dozen pharmaceutical corporations control the research, manufacture and sales of drugs. Naturally, they keep their drug trials secret and secure. Some are tested on unsuspecting, desperate people in developing countries.

Scientists at the Cochrane Collaboration had to fight long and hard to get their hands on the Roche research data. In November 2012, a researcher suggested that European governments sue Roche and that doctors and others boycott the company’s products until it published all its data on oseltamivir (Tamiflu).

Finally, have wrenched the data out of the reluctant Roche, the Cochrane Foundation scientists now say that the drug did not prevent the spread of flu or reduce dangerous complications, and only slightly helped symptoms. As to the claim that Tamiflu could slow the spread of the disease to give time for a vaccine to be developed, the report's authors said "the case for this is simply unproven" and "there is no credible way these drugs could prevent a pandemic".

Worse than that, Tamiflu could have actually made people sicker. Carl Heneghan, Professor of Evidence-Based Medicine at the University of Oxford and one of the report's authors, told the BBC: "I think the whole £500m has not benefited human health in any way and we may have harmed people. The system that exists for producing evidence on drugs is so flawed and open to misuse that the public has been misled."

Oseltamivir was first produced towards the end of the last century and had little success at first. So Roche’s public relations team went to work to stoke media interest and create political pressure to buy the drug.  The corporation’s PR adviser Edelman worked with the company to create “a hybrid network of twelve local public relations agencies to take advantage of flu as a breaking news story and launch Tamiflu in the top 100 local markets when flu was in the area”.

In September 2009, the BMJ reported that doctors were raising concerns about side-effects and that it was clear that Tamiflu could not contain a local outbreak within a defined area. The report added: “Yet orders continue to grow. In the UK, oseltamivir has practically become an over the counter drug, with one distinction: it is handed out free after callers provide a simple description of their flu symptoms by telephone, bypassing the need to see a doctor.”

The Tamiflu scandal is just one of many that beset the industry. For example, Big Pharma – the handful of corporations that control the global industry – haven’t produced a new range of antibiotics for 20 years because there’s little profit in selling this type of drug.

During that time, the over-prescription of antibiotics by health practitioners and their intensive use in livestock farming to make meat cheaper has spawned new bacterial strains that are immune to existing drugs. Others have become so difficult to treat that they kill some 25,000 Europeans yearly.

In 2013, the top 10 pharmaceuticals had astronomical revenues totalling over $300 billion. Much of it comes from drugs we don’t need and from denying developing countries the right to sell generic equivalents at lower prices.

When it comes to holding on to patents to enforce monopolies, Big Pharma has an appalling record. Dylan Gray’s film “Fire In the Blood” documents how the corporations and governments blocked access to low-cost AIDS drugs – causing millions of unnecessary deaths.

He says: “At the industry's behest, governments in the US and Europe use a dizzying variety of trade mechanisms, threats of sanctions and so on to curtail supplies of affordable medicine in the global south. The potential impact of these measures in human terms is nothing less than cataclysmic.”

There are solutions we could pursue if the profit motive was not the main driver. First, over-prescribing has to stop. Doctors have to put patients first instead and abandon the quick-fix approach as well as misplaced loyalties to drug firms.

Secondly, we should note that  84% of worldwide funding for drug discovery research comes from government and public sources, against just 12% from drug companies. Apparently, researchers have already discovered new antibiotics but haven’t got the funds to develop them. So the science is there. However, the technology and capacity to turn knowledge into products is in the hands of Big Pharma.

This is a cash rich industry – the top 20 corporations have an estimated $150 billion in resources – that is now more interested in protecting patents than developing new drugs against common diseases, or in persuading people to buy “lifestyle” drugs they don’t really need. Big Pharma has an unhealthy grip on society’s collective throats that requires a strong dose of revolutionary medicine to loosen.

Paul Feldman
Communications editor

 

People's Inquiry into 'Our future beyond capitalism'

The Ukraine-Russia crisis is just one expression of dramatic changes that are taking diverse forms in different countries. Nevertheless, there is an essential unity to a fast-moving global crisis that embraces economy and finance, ecosystems, democracy and politics, culture and ideology.

There is undoubtedly an eco-social impasse on a global scale. The old order cannot manage the contradictions within the existing system or meet the aspirations of countless millions in countries from Brazil to Ukraine, from the UK to the United States, from France to Greece.

Hierarchical political-state systems which are superficially democratic are compromised by their collusion with corporate and financial power and their subordination to market forces. Climate change is one consequence. So too is resurgent nationalism, creeping authoritarianism and mass state surveillance.

There is worldwide opposition and resistance, but as yet no shared strategy for getting beyond capitalism socially, politically and economically. That should surely be our goal and we assert that another world is not only possible but entirely necessarily for all our futures!

So after more than six years and 1,700 blogs, usually at the rate of five a week, A World to Win is proposing a switch of emphasis. There is a genuine need to deeper our understanding of the connected parts of the dramatically altered world and to use this knowledge to change what goes on in favour of the 99%.

We’re suggesting that this takes the form of a People’s Inquiry, with “Our Future beyond Capitalism” as the subject to be investigated. It will be open to individuals, campaign groups, trade unions, academics and students and anyone interested in working on solutions in a collaborative way. We have suggested six areas for the inquiry:

1. The ecosystem, including climate change and species loss
2. Global economy and finance, where the 1% rule over the 99%
3. The state, democracy and social rights (like health and housing)
4. Ideology and philosophy – dialectics of liberation   
5. Culture, education and sport – how they can help set us free
6. Networks/organisations/strategies for revolutionary change

When the People’s Inquiry is launched next week, you will find links from this site to these different areas. In each area, we have suggested some questions to focus our initial work. A World to Win is proposing a three-stage process:

1. Gathering evidence through papers, web references and contributions from individuals and groups. People can bear witness about their own situation or campaign, through text or by sending video or audio files. 

2. Face-to-face meetings in different locations, and on-line meetings, to assess and discuss the evidence, draw conclusions and make proposals.

3. A working group, which contributors will be invited to join, will discuss the results and collaborate on the contents of a draft final report that maps out a way forward.

This will be a simple registration process that will enable you to post to the inquiry, which is hosted on our network platform. This is your invite to take part. Please accept and use it.

Paul Feldman

Communications editor

Get fracking - corporate plans for Ukraine's future

An independent, modern, prosperous Ukraine was the vision of the young people that took to the streets to get rid of the Yanukovych regime and many think there is a better chance of that in partnership with the European Union than under Russian influence. But the fact is that the EU, US and their transnational corporate partners (and the home-grown oligarchs) have very different plans

And these do not hinge upon the prosperity and wellbeing of Ukrainian citizens and their environment. Fracking on a massive scale will be a prime focus for EU and IMF "loans", and Shell and Chevron, who signed deals with ousted president Yanukovych in 2013, will be joined by all the usual suspects.

Ukraine has an estimated 42 trillion cubic feet of technically recoverable shale gas reserves, the fourth largest deposits in Europe behind Poland, France and Norway. Since France is so far not in the market, Ukraine's deposits are even more attractive. The US Energy Administration  suggests Ukraine could be exporting shale gas by 2020. With almost every Russian gas pipeline running through Ukraine, it would be possible to create parallel infrastructure exporting shale gas.

The Russian government says it objects to fracking in Eastern Ukraine because of fears about water pollution when its actual fear is competition. That is not to say water pollution won't happen, but it isn't stopping Russia's own fracking plans for large areas of Siberia.

The corporations are moving into other areas of Ukraine’s economy too. Ukraine's former collective farms were seized by oligarchs like Oleg Bakhmatyuk and grown to the point where his agricultural business UkrLandFarming is the worlds second biggest egg producer, and the eighth largest grain exporter.

UkrLandFarming recently sold a 5% share to multinational agri-chemical giant Cargill for £200m. Cargill already have a big operation in Ukraine, with feed mills, oil production and grain silos.

Ukraine is poised to become the world's third biggest grain exporter in 2014 overtaking Russia and Argentina, another blow to Russian hegemony. But all this wealth will not be produced to benefit ordinary Ukrainians. It will enrich the oligarchs and their global partners whilst it further destroys Ukraine's land and ecology.

There is terrible air pollution throughout Ukraine, because of the coal-burning industries of eastern Ukraine and poor regulation of transport. The rich dark soil of the steppes is already suffering from erosion and land slips due to over farming. Grain production is being sustained by the application of huge quantities of chemicals and recent low rainfall has led to a need for more irrigation.

The great rivers  – the Dnieper, Dniester, and Donets – are seriously polluted with chemical runoff. The diversion of fresh water has made the Sea of Azov and the Black Sea more saline, damaging marine wildlife and reducing fish stocks.

Ukraine must also go on coping with the aftermath of the Chernobyl nuclear power plant explosion. Vast areas of farmland and forest are contaminated with radioactivity including Strontium 90, but small farmers are still working it.

Ukrainians just have to look across the border to Poland to see that EU membership is not necessarily a route to modernity. Poland is still a focus for dirty industries with low levels of regulation that EU giants France and Germany would never permit on their own soil.

And the Polish government has put thousands of hectares of prime agricultural land on the market in recent years – multinational purchasers are accused of planning to exploit a legal loophole to start growing GM crops. Polish farmers have been blockading the land sales agency with tractors continuously for a year.

Millions of Ukrainians are now set to join the economic and environmental struggles facing all of us on the planet - they are more than welcome!

Penny Cole

Environment editor

Welsh co-ops report points the way forward

Parallel announcements of  job cuts across the UK underline the price of the so-called “recovery” as it affects the lives of the majority of ordinary people caught up in the global economic crisis. A timely report from the Welsh Co-operative and Mutuals Commission sets out a new path.

Steelmaker Tata, part of an India-based transnational conglomerate comprising over 100 operating companies in seven business sectors, is reducing its workforce by 123 in Newport, South Wales in response to reduced demand for its electrical steels.

This is much more than ironic because coal, iron, steel and even railways were exported from Newport and Cardiff to India and other parts of the then British empire at the height of the industrial revolution.

Shared Services Connected Ltd (SSCL) is a little-known joint venture formed last November between the Cabinet Office and the UK arm of French IT services group Steria with the aim of cutting the costs of the government's back office functions.

The Public and Commercial Services union (PCS) expects its members’ new employer to close offices in Cardiff, Sheffield and Leeds with additional losses in Blackpool, Newcastle, Peterborough and York, amounting to 500 jobs, many being transferred to cheaper sources of labour overseas.

A cynic might say that this is just business as usual, the unfortunate consequences of the operation of the global “free market” in commodities produced by the application of capital and labour. And to some extent – stripped out of the immediate historic context -  they’d be right.

But the crash of 20007-8 showed that the credit-induced period of globalisation of that system had reached its limit. The recession that followed has resulted in huge over-capacity in many countries, including in China, the world’s second largest economy.

This new round of job cuts and capacity reduction comes after five years of ultra-low interest rates set by central banks around the world, the lowest in their history, have failed to bring about a real recovery. Manufacturing production in the Chinese powerhouse of globalisation is not slowing but shrinking, and it’s not being replaced elsewhere.

So it is high time to think about and begin the process of bringing an embryonic new system fully into existence, taking the place of the one which has burnt out. And we can look to South Wales for that, too. As Professor Andrew Davies Chair of the Welsh Co-operative and Mutuals Commission, writes in the report

Many have argued that we are faced with an extensive and systemic breakdown of trust in our society: between citizens and many of the major institutions in civil society and between the individual, the state and the political process. 

Much of this suggested breakdown derives from the global banking and economic crisis in 2007 and the continued world economic down-turn and the anaemic recovery in the UK, triggered by scandals in the banking sector and recent corporate failures in other sectors which has led to extensive questioning of the ways in which our economy and society is run….
 The orthodoxy of the neo-liberal, free market philosophy which has dominated governmental, political and economic thinking over the last forty years is now being widely challenged for the first time in many years. This widespread disillusionment has led many people to look for alternative, more ethical and socially responsible ways of organising businesses and services, particularly those run on a co-operative, mutual or not-for-profit basis. 

The report “aims to create a culture and policy environment in which co-operative ways of doing business are the norm, not the exception”. It’s easy to argue that the report doesn’t go far enough. But it’s a great place to start.

Gerry Gold

Economics editor

Defend Ukraine's right to self-determination

Russia’s occupation of Crimea and the threat to invade other parts of Ukraine on a trumped up pretext, is a reactionary response to a popular uprising for democracy in Kiev and a diversion from serious economic problems confronting the Putin regime.

As leaders East and West seek to blame one another, the key issue – Ukraine’s right to self-determination is being swept under the carpet. The excuse for the invasion of Crimea – that the Russian-speaking majority had to be saved from “fascists” – is part of a fake narrative dreamt up in Moscow and one used down the ages.

Moscow claims that the Maidan uprising in Kiev has been run and financed by Western reactionary forces and is aimed at suppressing Ukraine’s Russian speakers. Yet the Maidan uprising which began in November 2013 was first and foremost a popular revolution, which included many elements in Ukrainian society, amongst them – but not led by – right wing nationalists against a corrupt, autocratic regime. 

Many Jews took part in the uprising, for example. An ex-Israeli special forces soldier led a Kiev fighting unit against the Yanukovych government. Volodymyr Groysman, a former mayor of the city of Vinnytsia and the newly appointed deputy prime minister for regional policy, is a Jew.  

 

A language law introduced last week by Kiev’s parliament to reverse a provocative act by ex-president Yanukovych was yesterday vetoed by Ukraine’s caretaker president Turchynov. He acknowledged it had been a mistake.

While Putin’s provocative actions are a blatant infringement of Ukrainian sovereignty, the Russian bear has found some allies in strange places. British media commentators including Jonathan Steele and former British ambassador Rodric Braithwaite are calling for NATO and John Kerry to “back off”. As Timothy Snyder writes in the New York Review of Books:

"Interestingly, the message from authoritarian regimes in Moscow and Kiev was not so different from some of what was written during the uprising in the English-speaking world, especially in publications of the far left and the far right. From Lyndon LaRouche’s Executive Intelligence Review through Ron Paul’s newsletter through The Nation and The Guardian, the story was essentially the same: little of the factual history of the protests, but instead a play on the idea of a nationalist, fascist, or even Nazi coup d’état.”

The first time Ukraine saw even a glimpse of nationhood in modern times was in 1919 when the Zluty unity agreement was signed and the Ukrainian People’s Republic came into existence. Areas of the country were, however, ceded to Poland.

Early Bolshevik policy strongly asserted the right of all nations to self-determination in the former Tsarist empire and elsewhere. During the 1920s, under Mykola Skrypnyk’s Ukrainization policy, the Soviet leadership encouraged a national renaissance in the Ukrainian language, literature and the arts.

Crimea became an autonomous part of Ukraine in 1954 after being gifted by Nikita Khrushchev. It was his effort to make up for Stalinist oppression, when 7.5 million people – mostly Ukrainians – died in the Holodomar, a terror-famine deliberately imposed by Stalin in the early 1930s. Since 2006, the Holodomor has been recognized by Ukraine and several other countries as an act of genocide.

The Stalinist policy of starvation and repression was followed up from 1944 by ethnic cleansing with the forcible deportation of over 200,000 Crimean Tartars. Even Tartars fighting in the ranks of the Red Army were demobilised and sent to labour camps.  

Not too surprisingly, Stalinist repression had led some Ukrainians to welcome German forces after the invasion of the USSR in 1941. Nonetheless, the vast majority of Ukrainians fought with the Soviet Red Army and Moscow named Kiev as a hero city.

Ukraine’s longing for nationhood re-emerged as a powerful force encouraged by Mikhail Gorbachev’s glasnost policy and, finally, the 1991 break-up of the Soviet Union. It inspired the human chain of 300,000 Ukrainians which led to independence of today’s Ukraine.

         

After Ukraine declared its state sovereignty in 1990 and its independence in August 1991, a dispute flared up over the status of the Crimea. It was settled by an agreement in 1992, by which Crimea was granted autonomous status within Ukraine.

But Vladimir Putin – following in Stalin’s footsteps, has never accepted Ukraine’s right to exist. In 2008, he said to George Bush that if Ukraine joined NATO, Russia would annex Crimea and eastern Ukraine: “Don’t you understand, George — Ukraine is not even a nation! What is Ukraine? Part of her territory is Eastern Europe, and part, a considerable part, was given by us!”

A succession of leaders representing either a Western-leaning bourgeois or oligarchs looking to Russia have failed to develop Ukraine and played one community off against another. Corruption became endemic with Tymoshenko and then Yanukovych enriching themselves. Now Ukraine is bankrupt. The European Union, for all its mouthing about democracy, has no intention of bailing out any leader in Kiev.

Underlying Putin’s aggressive nationalism is his deep fear of a people’s uprising within Russia itself. The superficial success of the Sochi games was accompanied by a contempt for the corrupt abuse of public funds, disdain for local people’s rights and ecological devastation.

Russia of course has huge oil and other natural resources. But the recent growth of some sectors, which saw the enrichment of oligarchs and parts of the middle classes in the 1990s and noughties, is in crisis. Interest rates have shot up, the stock market fell 9% this morning and the rouble is at an all-time low. A massive capital flight has been under way for years. Much of it has ended up in luxury homes in Knightsbridge, laundered by Western banks or in the shape of football clubs.

Putin has quickly reversed the pre-Sochi cosmetic release of opponents, like Pussy Riot. He closed down one of the few remaining television stations that criticised the monstrous Sochi Olympics. Protests by anti-invasion activists in St Petersburg and Moscow were quickly suppressed by riot police.  He remains what he has always been: an autocrat presiding over a corrupt capitalist oligarchy who brutally suppresses and kills his opponents.

It is indeed rich of Kerry, Hague and other Western leaders to mouth criticisms of Russia’s military intervention – bearing in mind the US-UK-NATO invasions of Afghanistan, Iraq and bombing of Libya along with remote killing by drones in Pakistan.

Opposing Putin’s act of aggression in no way, therefore, implies support for NATO and the EU. They can no more represent the aspirations of Ukrainians than Yanukovych or Putin can, while the new government in Kiev has no solutions either. All the people of Ukraine, whatever their mother tongue, have the right decide their own future free of interference from outside forces. That principle is an absolute.

A World to Win editors

How Miliband called McCluskey's bluff

If Len McCluskey were an investment banker, he surely would have been fired a long time ago. Instead, his position as general secretary of the Unite union is secure even though the return on capital invested in Labour leader Ed Miliband is beyond measurement because it’s so low.

Tomorrow, McCluskey and fellow union bureaucrats from affiliated unions will, not unlike turkeys at Christmas, vote for their own slaughter at the hands of Miliband and his party leadership.

Miliband will formally complete a process of “reform” – was ever a word so misused – in party structures that began in the early 1990s, and carried on by Tony Blair and Gordon Brown when they got the unions to vote to abandon the socialist Clause 4 of the constitution.

This time Miliband has gone when even Blair feared to tread. Out goes the historic links by which members of affiliated unions had a portion of their subs handed over to Labour. Out goes the way Labour leaders are elected, with the unions having a substantial say through a ballot of members.

Out goes the collective and in comes individualism. Margaret Thatcher would be the first to applaud, especially as Miliband gave her a glowing reference recently.

Labour’s national executive confirmed the plans earlier this month with only two votes against. Tomorrow, a special half-day conference will rubber stamp the proposals. After the Nec, one shadow cabinet member is reported as saying:

"At the start, the unions were shocked, but in the end the unions had no option. Ed Miliband was their choice for leader and he wanted these reforms and, 18 months out from an election, they could not defeat him. Unite may be in a different place, but Falkirk [the constituency troubled by a selection row] meant it was impossible for them to lead a rebellion. They feel they have done nothing and are badly bruised.”

McCluskey, in particular, has egg all over his face. Miliband was his choice as leader and in return he has been humiliated. In a belated attempt to recover some poise, McCluskey is now threatening to cut his union’s affiliation fees by £1.5 million because a poll shows that only 40% of Unite’s members vote Labour.

He said: "I know there are some people internally in the Labour party that are beginning to panic because of what we are considering. I am not sure why because it was self-evident from last summer when Ed Miliband made his proposals that there would be consequences. I said that having been challenged by Ed to consider the status quo, I suddenly felt it was untenable. We have one million members paying into the political fund and affiliate the full one million members to the party…. Looking at it, I thought it was difficult to justify even from a moral standpoint".

Last October, the company that owns the Grangemouth petrochemical plant threatened to pull out unless the union agreed to new harsh terms and conditions. McCluskey’s bluff was called and he rushed up to Scotland to overrule local officials and impose a shocking deal on his members.

So perhaps Miliband knows that the Unite union leader is mostly bluster and that when push comes to shove, McCluskey will not rock the boat with just over a year to the general election. In any case, McCluskey has said: “Even if we reduce our affiliations we can still give direct donations to the national Labour Party".

The truth is that investment in Miliband has produced precious little for Unite and its members. One Nation Labour as it prefers to be called as it careers further and further into naked populism, is pledged to uphold austerity and ConDem spending cuts, a public sector wage freeze and to retain markets in the NHS and other services.

Vote for that? You have to be joking!

Paul Feldman

Communications editor

Standard Life threat shows where power really lies

Standard Life's statement that in the event of a “Yes" vote in the Scottish referendum they would leave Edinburgh, forcing 5,000 employees to choose unemployment or emigration, shows up the narrowness of the independence debate so far.

The insurance company said it would have no choice because Westminster has ruled out a currency union with an independent Scotland which would be denied the possibility of retaining the pound.

The Edinburgh-headquartered company’s statement serves as a reminder of where power really lies, and the reality that political power, whether located at Westminster or Holyrood, means nothing without economic and financial authority.

Just as Standard Life was putting the boot, the Royal Bank of Scotland posted massive losses for the sixth year running. The essentially bankrupt bank announced that it has decided to pull out of some of their riskier activities and focus on "bread and butter banking".

Is that the right or wrong thing to do? One thing is for sure, we were not asked though we as taxpayers nominally own the bank. RBS CEO Ross McEwan declines to say if the bank will leave Edinburgh if there's a vote for independence in September’s referendum.

But no way can a few million Scottish taxpayers bail out that behemoth when the next crisis strikes. They would just have to crash, taking thousands of jobs and millions in savings with them. The same goes for the Bank of Scotland.

The problem is there is no real transfer of power on offer as a result of the referendum. Alex Salmond's business-loving, oil-addicted party do not present a materially different future as a result of independence. So the SNP has a very narrow platform. In effect all they can offer is "Scotland ruled by Scots" and "no more Tory governments".

Given that the SNP and One Nation Labour are equally willing to kow-tow to ruthless corporations (remember the shocking betrayal at Grangemouth last year), that's pretty uninspiring.

The SNP had no answer to the question, what will happen if Scotland is excluded from a shared currency? They simply called Osborne-Alexander-Balls "bullies" and said they would never carry through the threat.

They didn't point out the obvious, that this shows that the three main parties are entirely in agreement on economic and financial issues, with absolutely no difference between them. That's because the SNP share the same ideology!

It couldn't have been clearer this week, when the ConDem Cabinet met in Aberdeen and the SNP Cabinet met just down the road at Portlethen. They may have been separated by a few miles, but they simultaneously presented the same fawning, acquiescent policies to the giant oil corporations.

This independence referendum is certainly putting questions of democracy and the realities of state and economic power into sharp relief. It is a disruption of the status quo that is causing huge distress, particularly for Labour.

If the SNP cannot give any powerful reason why people should vote for independence, nor can Labour give any meaningful reason why they should not. A strange scene yesterday at Westminster underlines this.

SNP MP Pete Wishart went into the voting lobby to see which Scottish MPs had turned up to vote in a motion on the bedroom tax. Scottish Labour MPs failed to even turn up last time, to their eternal shame.

East Renfrewshire MP Jim Murphy rushed up to Wishart screaming "fuck off, fuck off, fuck off....." over and over again. It was a bizarre scene by all accounts, but I would argue this unbearable tension felt by Scottish Labour is about more than loss of seats and personal incomes.

As Labour cannot advance either a socialist case, a working class solidarity case for the continued union of Scotland and England or principled support for self-determination, then what have they become? Demonstrably, undeniably, another party of big business, a process that began with the Blair governments. Neverthless, Labour’s crisis over Scotland is an  historic moment for the party of Keir Hardie.

Penny Cole

Vultures circle Ukraine as economy collapses

The formation of an acceptable new government in Ukraine reflecting the multi-dimensional aspirations of the popular uprising that saw off the Yanukovych kleptocracy is proving difficult enough. Dealing with its collapsing economy is an even bigger problem.  

Ukraine’s economy is relatively small – at around $7,000, its annual gross domestic product for each of its 45 million people is around one fifth of the UK’s – but the country’s potential is being sized up by external forces.

All the actors on the global political and economic stage – including the International Monetary Fund, the European Union, Russia, China and not least the global corporations are eying up the prospects for collapse. They are weighing the advantages that can be gained from an intervention and studying the likely impact on themselves.  

In the 20 years or so following the break up of the Soviet Union, most of the former state industries were “privatised”, or rather handed over to oligarchs, including Yanukovych’s family members.  After years of their self-enrichment, and recent economic decline intensified by the effects of the global crash, the country is now dangerously close to bankrupt.

World prices for steel, Ukraine’s biggest export, have fallen by half since the Chinese economy began to slow in 2011. At the same time the country’s cash balance has been declining and its external debt – including overdue payments due to the IMF and Russia’s Gazprom - soaring.

As is well-known, due to its geographical location Ukraine plays host to a network of pipelines that carry gas and oil from Russia, and a number of the other former Soviet states to Western  Europe. But the global oil corporations are eager for action.

Shell and Chevron signed agreements last year to drill unexplored shale formations in Ukraine, offering the chance to upgrade the country’s energy infrastructure and boost domestic production, thus reducing the amount of gas imported from Russia. Before the crisis erupted last year, Exxon, the largest US oil company, was also close to signing a pact to explore the Black Sea.

The country is the fourth largest of the world’s arms exporters, and has become increasingly dependent on sales to China’s rapid build-up of military equipment. Last year, Ukraine agreed to lease 5% of its extremely fertile, but relatively undeveloped land to China to grow crops and raise pigs for sale to Chinese state-owned companies. As part of that deal China promised to build highways and bridges in the country.

A new report from the Institute of International Finance sets the immediate context. It says that budget financing “has become virtually unavailable”. The acting president, it noted, says that Ukraine’s pension fund does not have enough money to meet pension obligations. The report warns:

“On the other hand, tax revenues appear to have collapsed along with economic activity during the weeks of the political standoff. With no access to foreign markets, and domestic banks under intense liquidity pressure, the central bank has become the sole financier of the government.”

Estimates of Ukraine’s’ need for emergency funding vary from $12- $30 billion this year. On the world scale these are relatively small sums – the bailout for Greece amounts to 237 billion euros - and small change in relation to the trillions pumped into the financial system in the wake of the 2007-8 crash.

Some have even suggested that the emerging Ukrainian government should approach former citizen Jan Koum for help. He has just sold his instant mobile messaging application WhatsApp to Facebook for $19bn. More seriously, the IMF will only lend to a stable government, one that is prepared to impose a severe programme of austerity on its restive population.

That is certain to lead to further social upheaval. Ukraine’s struggle for political and economic self-determination has only just begun.

Gerry Gold

Economics editor

In case you missed it, here's hot news from the TUC

As tumultuous world events like the uprising in Ukraine, the direct democracy movement sweeping Bosnia, the Syrian civil war etc etc grab your attention, you may have missed a momentous announcement by the Trades Union Congress here in Britain. There is to be a mass demonstration in – wait for it – October!

Yes, in eight months’ time we are being invited to march through London to a rally in Hyde Park.  Not on a weekday because that might involve people going on strike (God forbid) to take part. No, as usual, we will all walk calmly through the centre of the city on a Saturday afternoon.

There, if you care to stay for the rally, you will hear speeches from TUC luminaries and probably Labour leader Ed Miliband. They will be standing under the banner of “Britain Needs a Pay Rise”. Not workers, you notice, but “Britain”.

Stirring stuff, eh? 

It wouldn’t be so bad if it was billed as an anti-government action, to condemn the ConDems for slaughtering living standards in the wake of a capitalist crisis workers are not responsible for. But no, “Britain Needs a Pay Rise” is actually demanding that everyone gets a share “in the recovery”.

Far from opposing the wretched Coalition, this is actually buying into their claims that a “recovery” is taking place. In fact, as even George Osborne has had to acknowledge, any “growth” is driven by debt and the housing market. In fact it resembles a new bubble waiting to burst along the lines of the 2008 calamity. As the 1930s song goes:

I'm forever blowing bubbles,

Pretty bubbles in the air,

They fly so high,

Nearly reach the sky,

Then like my dreams,

They fade and die.

Back to the TUC on October 18 and its general secretary Frances O’Grady. She says in the call-out for the demo that “hard-pressed families across the UK must be beginning to wonder when the tough times they are experiencing will ever end.” Actually, just as many are wondering whether the TUC will ever get off its bureaucratic backside and lead some real resistance.

The real value of average wages was falling before the recession and they have declined more rapidly since 2010. Pay-day loans have soared and many people have loaded up their credit cards to pay for essentials like shopping and housing costs. And where was the TUC (and Labour) while all this was happening?

O’Grady rewrites the history of the last four years when she claims that “during the dark days of recession, workers accepted that their pay might have to be frozen or even cut to save jobs”. No! The TUC alone accepted that terrible position, even though member unions opposed the government’s policies.

At the TUC Congress in 2012, for example, the leaders of Unison and Unite threatened a general strike against the public sector pay freeze. TUC leaders killed that proposal stone dead. As hundreds of thousands of jobs were culled by local councils and other public bodies, the TUC sat on its hands.

Instead, we have the ritual of the annual demo. This year’s will be the fourth in a row. A chance to let off steam by marching around town and then going home. No wonder the turnout has declined year-on-year.

Meanwhile, Miliband is pledged to continue ConDem austerity should his One Nation Labour win the 2015 election. This includes retaining the present public sector pay freeze. His latest wheeze is a plan to give employers a taxpayer subsidy to pay the “living wage” (which is actually a subsistence wage).

So when O’Grady tell us that “the time has come for Britain to get a pay rise” she reduces a pressing need to a fatuous slogan. For her information, countries don’t get pay increases, workers do. That’s why people formed unions in the first place and in 1868 came together to launch the TUC. For the present leadership at Congress House, all this history is bunk. 

Paul Feldman

Communications editor

Penguin capitulates to book banning in India

Penguin India is now in the business of banning books, in an action that has shocked writers and free speech campaigners inside and outside the country. The publisher is recalling all copies of The Hindus: An Alternative History, will pulp them and ensure their withdrawal “from the Bharat” (Indian territory) within a period “not exceeding six (6) months”.

That pledge is revealed in an extract from the minutes of an agreement between Penguin and an 84-year-old school principal, Dinanath Batra. Penguin’s capitulation before Batra’s offensive is shocking. Batra has denounced Wendy Doniger’s book as “malicious”, “dirty” and “perverse”.

He is a cat’s paw for the Save Education Movement (Shiksha Andolan Bachao), a Hindu fundamentalist group. It wants to purge India’s education and bookshops of all texts that it believes threaten Hindu culture. There is a wider political context as India prepares for general elections in three months time. The Hindu nationalist Bharatiya Janata Party (BJP) is expected to score a major victory over the secular Congress Party.

The ban and pulping has aroused a torrent of anger and protest from scores of Indian writers, film makers, journalists, historians, novelist Arundhati Roy and many in the Hindu press. Roy has challenging the Indian state over many issues, including its repression in Kashmir and has courageously denounced BJP leader Narendra Modi.

Business interests have succeeded in suppressing investigative books and art. One of India’s most celebrated painters, the late Maqbool Fida Husain, was forced to flee the country in 2006 after attacks on his paintings.

Mukul Kesavan, a distinguished historian and cricket writer, has documented the retreat before the nationalists not only by Penguin India, but other publishers including Bloomsbury India and Oxford University Press which have recently withdrawn titles.

Kesavan writes: “Penguin’s response to intimidation-by-litigation is even more dismaying. First, the case against the book seems borderline farcical. Doniger’s sins of commission include allegedly erroneous dates, inaccurate maps, her use of psychoanalytic categories and offensive metaphors as well as ‘Christian missionary zeal’. Wendy Doniger is Jewish. If there ever was a test case that a publisher stood to win, it was this one.”

The assault on writers runs far deeper than an attack on freedom of speech in India. It is an expression of a deep and growing political and cultural crisis as globalisation has failed to deliver for the mass of Indians. The long-term inability of the Congress Party to fulfil the aspirations of its supporters as it seeks to cling on to power is self-evident.

As the DNA website notes:  “The best that can be said for the [Indian] state is that it is equal opportunity in its cravenness, willing to back obscurantists of all stripes. If it quailed at the prospect of angering hard line Muslim elements with Rushdie, Nasreen and R V Bhasin, it has accommodated Christian outrage when it comes to the Da Vinci Code and the self-appointed guardians of Hinduism who took outrage at Ramanujan and Doniger.”

India is part of the “Fragile Five”, as the market economies of Brazil, South Africa,  Turkey and Indonesia have become known. Their rampant growth rates have slowed down. The modernisation wrought by India’s entry into the global economy has been accompanied by a shocking crisis amongst its small farmers, once the country’s economic backbone.

In the southern state of Andhra Pradesh, for example, more than 290,000 farmers have committed suicide since 1995. In India, as in the other Fragile Fives and Brics, like Russia, China, Brazil and Turkey – not to mention Ukraine -  the heavy hand of censorship and repression of journalist countries poses the question of who holds power.

In India,  “no one in the country or outside it quite knows how the country is run”, according to one political commentator, Annika Neujahr. This does indeed raise fundamental constitutional and philosophical questions in a country that claims to be the world’s largest democracy.

Corinna Lotz

A World to Win secretary

Ukrainians die for themselves, not East or West

The portrayal of the uprising against Ukraine’s government in Kiev and other cites as simply an East-West tug-of-war is a superficial viewpoint that insults those slaughtered by snipers on the streets of the country’s capital yesterday. Ukrainians are actually dying to remove a corrupt regime that represents only the oligarchs.

Neither should anyone be fooled by the crocodile tears shed by the White House and the EU for the dead of Kiev. Safe to say that if protests against governments in any of these capitals reach the fever pitch shown in Kiev, troops and armed para-militaries would quickly be on the streets and a state of emergency declared.

While it is true that far right forces around Svoboda are prominent in the fighting, there is no clear, unifying agenda in Maidan Square. People of all classes have rallied to an anti-government movement but without a perspective of what happens next. This is characteristic of global uprisings that began with the Arab Spring and that have spread to many countries since, taking different forms each time.

In Ukraine, opposition political parties, who play with populism just as much as Victor Yanukovych’s Party of the Regions, do not control the crowds that have taken the square. The direct action Common Cause group has seized many buildings and is for the dissolution of the state while the fascists draw their support from disenchanted workers in western cities and the middle-class in Kiev.

But as one observer put it: “Yet they do not go there [Maidan Square] for the West or against the East. They go for themselves and against the regime that victimises them… not in the name of a political system or even a particular politician, but for the rule of law and open borders.” 

The fact that the fighting has spread to the mainly-Russian speaking city of Kharkiv in the east adds substance to this point. "The price of freedom is too high. But Ukrainians are paying it," Viktor Danilyuk, a 30-year-old protester, said in Kiev yesterday. "We have no choice. The government isn't hearing us.”

They may not seem revolutionary enough for some people but these demands, as modest as they appear, are sufficient to produce a violent confrontation with a government and state that cannot rule for Ukrainians as a whole. Where that leads depends on other factors, including the crucial question of leadership and organisations that can transcend nationalism and the rule of the oligarchs.

Ukrainian oligarchs control large parts of the country's economy and are prominent in the ruling Party of the Regions, and control over 80 MPs. Orysia Lutsevych, researcher for the Chatham House think tank, notes: “In Ukraine, the fusion of business and politics is more the rule than the exception. Holding high legislative and executive office provides access to a patronage system, protection for business, access to public finance, and immunity from prosecution."

The businesses of Ukraine's richest man, Rinat Akhmetov, the main financial backer of the regime, obtained 31% of all state tenders in January 2014. The president’s son Oleksandr tops even this, having "won" 50% of state contracts in the same period. Father and son have stashed away vast sums of wealth in Western Europe.

Ukraine’s economy has been badly affected by the global crisis, particularly since the middle of 2012. Borrowing heavily both from Russia and the International Monetary Fund has left the Yanukovych government caught in the middle. Russia wants Ukraine drawn into a customs union of its own while the European Union sees 50 million potential new consumers.

Either way, the prospect for Ukraine’s workers is lower living standards either within an authoritarian, Russian sphere whose capitalist economy is badly affected by falling oil prices and an EU dominated by austerity and mass unemployment. Not so much an East-West tug-of-war as an East-West nightmare. Other, revolutionary solutions that rise above borders, beckon.

Paul Feldman

Communications editor

Co-op has totally lost its way

Admitting that it has lost touch with “its customers and members and with the communities in which it operates”, the Co-op is at a crossroads. After the near collapse of its bank, the Co-op is asking anyone and everyone to help determine the organisation’s future direction.

Crucial to its history and current identity, the Co-op makes a big contribution, via its own political party, to the Labour Party. The two parties maintain an electoral alliance – candidates who want to stand on the Co-op ticket have to be members of the Labour Party and appear on ballot papers as Labour Co-operative. 

The Co-operative Party is completely dependent on its income from the group’s trading activities. In 2012 the group donated a total of £805,000 to the party and its councillors. This included donations to 32 Labour and Co-operative MPs, as well as a one-off £50,000 grant to the office of the shadow cabinet.

At first sight, consulting widely by opening up a questionnaire to whoever wants to spend 20 minutes answering the questions might seem like a democratic move, but:

Q. where does it leave the more than 6 million members who’ve loyally stood by the organisation, liking and respecting its principles for decades?

A. Left by the wayside.

Euan Sutherland became group chief executive last May, from a career in for-profit companies including Coca-Cola, Curry’s and Superdrug. Peter Hunt, the former general secretary of the Co-operative Party, accuses him of threatening the abolition of the party.

The question that’s worrying the Co-operative and Labour parties is this one:

Q. To what extent do you think it is appropriate or inappropriate for big businesses to donate money to political parties?

A. It won’t stop huge donations to the Tories from the oil and banking industries.  But it does attempt to bury the Co-op’s ethos by equating it with all other businesses. According to the answers to the wide-open questionnaire, it could lead to the end of the Co-operative and Labour parties. 

Over the years, the democratic process has been largely reduced to becoming part of the corporate branding, giving its members a sense of belonging.  You won’t find many members even knowing how they could attempt to influence the big, or even small decisions. Those that have tried, for example, to get the Co-op to source some of its food offering locally have been disappointed, despite its claims to be in favour of a sustainable society and economy. So questions on that issue don’t impress.

Q. Is this questionnaire a return to democracy, or a threat to it?

A. A threat.

The co-operative movement came to prominence as an attempt to defend the livelihoods of workers being wrecked by the industrial revolution in the 19th century. Today, around the world co-operatives are being widely promoted as the antidote to the effects of the global crisis. Millions of people are once again coming to the conclusion that the unsustainable for-profit chase after growth is a dead-end and has to be replaced.

But that isn’t an option offered in the questionnaire. You can agree or disagree with the idea that the Co-op “is not just for profit”, but not whether it should be not for profit at all. You can agree or disagree with statement that “the Co-op supports and drives growth in the local economy”, but not whether this kind of growth is a bad or a good thing.

But there is an open-ended question you can answer:

Q. What, if anything, should The Co-operative do to encourage more people to shop with it?

A. become a not-for-profit enterprise run by its members through a participative democratic process. Campaign to ensure that all enterprises follow a similar model, ending the for-profit exploitation of people and planet.

Gerry Gold

Economics editor

Housing misery built into the system

Soaring house prices, a frenzied housing market, unaffordable rents and massive overcrowding. Welcome to ConDem Britain 2014, where only the wealthy can get a decent roof over their heads while those in genuine need can only stand and watch.

The average asking price on the Rightmove property website jumped by £8,103 in January and a typical property is now costing £252,000. But that’s a national average. Live in London and you can expect to pay around £500,000 to get on to the bottom of the “housing ladder”.

House prices soared by over 11% in the capital last year and the pace of increase is continuing. Bubble-like conditions are making first-time buyers stretch themselves too far, says the Money Advice Service. It researched 1,000 first-timers who had bought over the past two years, and found that one in five wished they had bought somewhere cheaper.

More than half admitted that the running cost of their first home was also more than expected, prompting the service to warn buyers: "You can afford your mortgage, but can you afford your home?" Affordability is most stretched in London and the south-east. One estate agent said that over the past year, the average property it sold in London went up by 18.4% to £448,800, a rise of £69,784 over the year, double the average salary of a Londoner.

Private renting is the only option as local councils and housing associations have few properties available for households without children. But it’s not a cheap alternative to a mortgage. Official figures show that average weekly rents are more than 50% of average local wages in more than half of London’s boroughs.

In Kensington and Chelsea, average weekly rents were a staggering 73% of local wages, and 71% per cent in Westminster. Even in poorer areas like Hackney and Southwark, the ratio was still over 50%. No wonder reports are growing of  young people actually moving back in with their parents to save on housing costs.

Adding to the pressure in London are cash-rich buyers from the Middle East, Russia and other areas who can plonk down ill-gotten gains at the estate agents. They are completely indifferent to the prices being paid.

Labour leader Ed Miliband’s call to make these homes available to London residents first is no solution. Firstly, they are out of the reach of most people who are not already home owners. Secondly, it would be a nightmare to enforce. Building more new towns is just another way of saying London is a rich man’s playground and that’s how it’s going to stay.

For a long post-war period, local authorities built millions of homes for rent, enabling most new households to find somewhere to live. Rents in the private sector were controlled. Since the early 1980s, a housing market driven primarily by the obsession with owner-occupation has replaced state intervention.  

It coincided with the deregulation of the financial system that provided anyone who wanted it with endless amounts of credit. Not enough money to pay your mortgage? Don’t worry, just borrow five, six or seven times your annual income.

In the ten years to 2007, real average house prices doubled while disposable income only rose by 15% in the same period. In London, prices soared by over 350% over the first decade of the Blair government. It couldn’t last and it didn’t. Come the 2008 meltdown, mortgages dried up while the house price bubble was maintained by a shortage of supply.  

In the 19th century, Frederick Engels wrote about the “so-called housing shortage, which plays such a great role in the press nowadays” and asked rhetorically:

How is the housing question to be solved then? In present-day society just as any other social question is solved: by the gradual economic adjustment of supply and demand, a solution which ever reproduces the question itself anew and therefore is no solution.

Capitalism actually recreates shortages in housing and other areas over and over again because that’s the way it works. A system that feeds on human misery is immoral and unacceptable.

Paul Feldman

Communications editor

'Death to nationalism' is message of Bosnia uprising

A feature of revolutionary times is when people’s movements decide to take matters into their own hands and throw up new forms of democracy. That’s what we are witnessing in Bosnia-Herzegovina, where people of all ages – from teenagers to the very old –  are engaging in an experiment in self-government.

The first people’s uprising of 2014 began in Tuzla, north-east Bosnia, an impoverished industrial city of 200,000 on February 4. The town has an unemployment rate of 55%, the highest in the country, while youth unemployment runs at 63%.

As the city administration handed in its resignation, a revolutionary organisational body called the “plenum” made its appearance. The idea of plenums quickly spread around the country, as one website explained:

“All over Bosnia, protesters are organising ‘plenums’, places where people can gather and try to formulate their demands. The participants are defining their rules, moderating the plenums by themselves, and, after summing up, sending their demands to cantonal assembles.”

In doing so they are shattering the clichéd image of a former Yugoslavia entirely riven by ethnic and religious conflicts. And the plenums revive a hidden but powerful aspect of former Yugoslavia’s  history, hitherto buried under nationalist propaganda and image-making. As Mate Kapović writes:

“The most impressive and symbolic picture of the first few days of the rebellion was the one depicting a burning government building in Tuzla, the city where it all began, with the graffiti ‘death to nationalism’ written on it. Since nationalism has long been a favourite refuge of the country’s political elites, who used it to justify their political and economic oppression, this was indeed a powerful message.”

The legacy of the Dayton Agreement, imposed by Nato and Bosnia’s presidents in December 1995, were, as the campaigning movement Bosanski Kongres says, “enormous labyrinths of government bureaucracy, with parliaments, prime ministers and presidents for each and every entity, canton and district”. Consequently, an impoverished population of under four million people was burdened by taxation to support a bloated bureaucracy.

Following the February 4 street protests, this dysfunctional state has gone into meltdown. Prime ministers in the cantons of Bosnia and Herzegovina handed in their resignations, but not before sending out security forces to brutally beat up demonstrators.   

Given the historic former ties with neighbouring Croatia and Serbia, corrupt political elites throughout former Yugoslavia are terrified that the “Bosnia revolution” could spread.  Solidarity demonstrations were held in Serbia, for example. 

The Balkan spring was heralded three years ago, at the height of the Arab spring and global occupy movements by Facebook protests. What has made Bosnia special– then and now - is that, as Kapović notes, “it was the first time that openly anti-capitalist messages were displayed in any of the post-Yugoslav countries”.

Until now, the image projected by the media about Bosnia-Herzogovina has been dominated by cruel ethnic and religious conflicts which have undoubtedly shaped its history. It was in Srebrenica that some 8,000 Bosnian Muslims were murdered by Serb forces in July 1995, despite being under UN protection.  

It was the assassination of Habsburg scion Archduke Franz Ferdinand in Sarajevo that sparked the outbreak of World War I a century ago. Today, the same area of the world can send a different kind of signal. Plenums of the kind being developed in Tuzla and elsewhere look back to the experiences of soviets in pre and post-1917 revolutionary Russia, the post-war Yugoslav and Hungarian workers’ councils, and more recently, the Occupy movements that swept the world in 2011-2012.

Plenums, like people’s assemblies, offer democratic forms of decision-making, ownership and control in place of top-down, capitalist state bureaucracy. Thus the people of this small but crucial state can be a real inspiration everywhere.  

Corinna Lotz

A World to Win secretary

Response to flooding shows the system isn't working

The current weather crisis has shown up the illegitimacy of politicians in charge of a system that is unable and unwilling to act for the common good. They greatly fear this exposure – it's the reason for the tide of government rhetoric about "money no object" and promises of future help.

In 2010, government chief scientist Sir David King warned of the need to plan for increased floods resulting from climate change. He proposed pulling flood defences inland, sacrificing some areas to the sea, establishing flood plains at the heads of rivers, modernising weirs, widening bridges and replacing sewers to separate sewage and floodwater.

This is the current policy of the Environment Agency and it has a backlog of hundreds of measures based on this approach. It can't complete them because of cuts and a Treasury rule that they can't invest more than £400,000 in any one project. The government's fantasy was that business and the insurance industry would step up as co-funders. As a result, of course, nothing happened.

The Met Office explains that the storms have their source in south-east Asia, where warming seas are evaporating huge quantities of water into the atmosphere. This caused a weather "chain reaction" which disrupted the Pacific jet stream, diverting it over north America and causing the extremely cold conditions there. This in turn affected the Atlantic jet stream, which moved more and more rapidly, bringing storm after storm to Britain and Ireland.

But Lord Lawson, former Tory Chancellor, knows better. He berated the Met Office for suggesting climate change could be involved. Instead, the floods should spur the government to stop spending untold millions littering the countryside with pylons and solar panels. This at a time when 80,000 homes are without power and probably the only  people with electricity are those with their own solar panels or turbines!

But it isn't just the Tory fringe who deny climate change as energy and climate change Secretary Ed Davey suggests in a speech today. Cabinet member and environment secretary Owen Paterson thinks climate change has been happening for centuries and is great because farmers will get longer growing seasons! Transport secretary Philip Hammond yesterday blamed "natural solar rhythms” for the weather. Help, we’ve been transported back to the Middle Ages!

David Cameron only “very much suspects” that the flooding is linked to climate change. He is running scared of the lunatics in his own party and Ukip (remember the Ukip councillor who said the floods were God’s retribution after the passing of the gay marriage law?) His chancellor is not a denier, he's a couldn't-care-lesser, a fossil-fuel profit freak, whose response to soaring energy costs was to let the Big Six drop spending on energy saving or renewables.

The ConDems want the UK fracked to bits and Somerset – which is largely under water - is one of the areas earmarked. You don't have to imagine the effect on water quality of flooded wells and waste water ponds. It happened in Colorado last year – as the headline here says: "Flooding and Fracking - a double disaster".

When King published his report he thought the floods would come in the 2030s at the earliest, and yet here's the wild weather, two decades early, and not only in Britain but across the world. Capitalist states thought they could treat climate change like they do the electorate – blandish, fool and bully people, whilst permitting corporate business as usual. 

The only issue now is whether we are prepared to permit them to go on down this road. There is nothing in it for us to maintain the status quo. Politicians of any political stripe wading about flooded towns won't help us.

We are on our own here, and so we should put all the resources at our disposal under democratic local control and start acting co-operatively to prepare for what is ahead, including halting any plans to increase fossil fuel burning.

Penny Cole

Environment editor

New banking crisis looms as credit crunch returns

Around the world’s biggest economies, gears are being thrown into reverse as credit, liquidity, broad money, leverage – whatever name you give it – turns from the antidote to recession to the source of volatility and a potent systemic threat.

Behind the optimistic PR spin of recovery, signs of growth, falling unemployment, etc., can be heard the unmistakeable beat of very different drums. Joining the credit squeeze by the financial big-shots –  the central banks of the USA and China – comes Danièle Nouy, the eurozone’s new chief banking regulator.

He is  warning that some of the region’s lenders should be allowed to collapse. “We have to accept that some banks have no future,” she said, anticipating imminent “stress tests” of the sector by the European Central Bank. “We have to let some disappear in an orderly fashion, and not necessarily try to merge them with other institutions.”

As the credit noose is tightened, warnings of debt-deflation grow louder. In contrast to inflation, which erodes the real value of loans, making it easier for borrowers to repay, deflation does the opposite. It makes money dearer, raising the burden of repaying existing loans — and it adds to the stress on fragile banks that hold the loans when borrowers cannot repay.

Just imagine what must be under discussion behind closed doors as inflation slows throughout Europe, and prices fall in Greece, Italy, Spain, Portugal, whilst those in Japan look like heading back in the same direction. What can be going through the heads of the ministers of finance in the heavily-indebted countries – like the UK, United States, Japan?  Let alone those in the IMF’s list of 39 heavily- indebted poor countries.

These are among the contradictory pressures that prompted Christine Lagarde’s plea for a new Bretton Woods post-war type meeting. The head of the International Monetary Fund is clearly concerned that unless concerted action is taken, the present stagnation will turn into a full-blown slump.

Her plan is a non-starter. The co-ordinated action that took place to rescue the banks in 2007-8 has given way to every capitalist for themselves. And tensions are growing between economies over scarce resources.

The Spratlys are a group of islands in the South China Sea, in a region hosting estimated oil and gas reserves which place it fourth in the world. The region is also one of the world's most productive areas for commercial fishing, accounting for 35% of the world’s catch in 2010. 

And it is one of the busiest shipping lanes in the world. More than half of the world's sea-going traffic, by tonnage, passes through the region's waters every year. Tanker traffic is three times greater than through the Suez Canal and five times more than through the Panama Canal. A quarter of the world's crude oil passes through.

No wonder that disputes have simmered since the first oil discoveries were made there in the late 1960s. Until recently, six countries – China, Malaysia, the Philippines, Taiwan, Vietnam and Brunei – were contesting rights over parts of the territory. Now the USA is making threatening noises in response to new claims by China.

US assistant secretary of State for East Asian Danny Russel told Congress that China's vague territorial claims had "created uncertainty, insecurity and instability" among its neighbours. "There are growing concerns that this pattern of behaviour in the South China Sea reflects incremental effort by China to assert control over the area.”  

Relations between China and Japan have deteriorated over a separate territorial row involving islands in the East China Sea known as the Senkaku islands in Japan and the Diaoyu islands in China. Last year, China announced an air defence zone in the East China Sea, and said that aircraft flying through the zone must follow its rules.

         

The United States, Japan and South Korea have ignored this declaration and flown military aircraft through the zone. Politics, nationalism, economic resources and territorial claims mixed with military aggression are, as always, a heady brew. Welcome to the global economy 2014.

Gerry Gold

Economics Editor

Miliband's praise for Thatcher says it all

Following Ed Miliband’s speeches is a thankless task for a number of reasons. They are more often than not vague and full of phrases devoid of any obvious content. But dig a little deeper and you will find an agenda that promises a reactionary continuity in British politics.

The assault on British society that began under the Margaret Thatcher governments was carried further by New Labour from 1997-2010 and has subsequently been deepened by the ConDems. Miliband has signalled he will continue that work should next year’s election send him to Downing Street.

Last night’s lecture at The Guardian positioned the Labour leader in a line stretching all the way back to Thatcher’s governments. He praised the most destructive of prime ministers for her “sense of purpose” in driving through change, although he declined to spell out what that meant for communities all over Britain.

Miliband then outlined a programme of “public service reform” that the Blairites will be cheering. Their “reform” consisted largely of outsourcing vast areas of public spending and decision-making to the private sector in a one-sided “partnership” with the state, where the corporations always win out.

In education, this took the malign form of “academies”. These schools are essentially run by private companies outside of local authority control and are but one step away from being driven by profit making. So Miliband’s promise to give parents power to call poor-performing schools to account is nonsense because the academy system will be left in place under a future Labour government.

So too will the wrecking policies of the ConDems with regard to the National Health Service. Instead of reversing them, a future Miliband government would simply add local people to the commissioning groups of GPs that now hold the purse strings and are busily handing out contracts to the private sector.

And so it goes on. As for the surveillance state developed by New Labour and finessed by the ConDems, Miliband simply wants a “US-style debate” – whatever that is – on the gathering of personal data by the security agencies. Well, they’ve had the debate in the US and the official line is that Edward Snowden is a traitor who has betrayed his country through his whistle blowing while Chelsea Manning is locked up in prison.

Lest anyone thinks that Miliband is a threat to the state with his call to make it “accountable”, his remarks about the role of the British intelligence agencies will clear that up. He said: “My starting point in this is the intelligence services do an important job. As somebody who wants to be the prime minister of this country I know that they do an important job in seeking to keep us safe.”

That’s alright then. A little more “oversight” and we’ll all feel happier while safe in our beds at night. Meanwhile, the surveillance will continue to target legitimate protests and actions against government policies.

Only last week, Miliband won support for changes to the party’s relations with the trade unions that were a deepening of the project launched by Tony Blair and Gordon Brown back in the early 1990s. The collective approach has given way to the individualism first championed in a serious way by Thatcher.

This week he has pledged political and financial continuity, reaffirming last night that a future Labour government would make sharp spending cuts in line with ConDem budget plans. So when it comes to next year’s general election, an application of the “consumer choice” approach will invite us to hang on to our votes rather than wasting them on any of the mainstream parties. The argument that One Nation Labour will be better than the Tories is shallow and totally unconvincing.

Paul Feldman

Communications editor

Palestinian kids given electric shock torture

You have to hand it to US secretary of state John Kerry. In his dream of entering the history books, he has taken on mission impossible. He is fighting tooth and nail for his version of the two-state peace plan between Israel and the Palestinians.

So much so that his relentless diplomacy has lead to an outburst by the Israeli minister of defence, Moshe Yaalon, who reportedly described Kerry as “obsessive and messianic in his quest for Mideast peace”. Kerry has also suggested that failure by the Israelis to compromise could lead to growing support for a boycott of the country, a campaign which has now established roots in the United States as well as Europe.

This led to some members of the governing coalition to accuse Kerry of anti-Semitism, which then compelled ultra-Zionist foreign minister Avigdor Lieberman to defend Obama’s foreign policy chief, describing him as a “true friend of Israel”.

Negotiations between Palestinian and Israeli negotiators have now been going on for over six months, including at the Munich Security Conference a couple of weeks ago. There Henry Kissinger quipped that “nobody ever lost money betting against a Middle East peace.”

But Obama’s administration is desperate for a “legacy”. With Kerry leading the charge, it is hoping to pressurise Israel into conceding some territory in exchange for the Palestinians recognising Israel as a Jewish state.

According to prominent US writer, Thomas Friedman, Palestinian president Mahmoud Abbas has suggested that Israeli troops could remain in the West Bank for a transitional five-year-period. And then they should be replaced by NATO forces. This is something Israel is hardly likely to agree to. Indeed, Israeli leader Benjamin Netanyahu wants Israeli troops in the Jordan Valley for up to 40 years.

But however much the Palestinian Authority may compromise, and however much the US may hope that it can get concessions out of the Zionist state, any agreement is likely to be blown out of the water by the sheer brutality of continued Israeli occupation.

The PA has lost considerable authority amongst its constituents. While it engages in meaningless negotiations, Israeli forces have resumed assassinations of key figures in the resistance, known officially as “targeted killings”.

Leading defence correspondent Amos Harel admitted today in Haaretz, that Israel had “quietly revived” its previous policy of murdering resistance leaders. Only yesterday a targeted killing in Gaza was aimed at Abdallah Kharti, a senior member of the Popular Resistance Committees.

Today, Australian television’s ABC Four Corners programme will broadcast the findings of lawyers who say that Palestinian children are being used to gather intelligence, thus destroying their childhood innocence forever.

One 14-year-old boy was taken from his bed “during a night raid on his family home in a Palestinian village”, according to the report. Qsai Zamara said he “was whipped and threatened” into falsely confessing that he threw stones at the army. "There was this big machine with all the electric wires in it, connected to the electricity. He wanted to give me electric shock with it," he said.

Fathi Mahfouz, 15, was given electric shocks and when he didn't confess: “I was sent to a room that has a cross in it, and hung me on it. I was hung and he kept hitting me," he said. Barrister Gerard Horton has documented rape threats against young children after interviewing hundreds of them through his organisation Military Court.

Lawyer Gaby Lasky, who represents Palestinian children before Israel’s military courts, said on the BBC’s World Service this morning, that the army aimed to use children as informants. Horton backed her up account, saying children were offered a combination of money and threats to give information.

While the United Nations children’s organisation UNICEF has deliberately played down Israel’s abuse of children, it is so bad that a group of 850 serving and former Israeli soldiers, speaking through Breaking the Silence, have also been highlighting the issue.

This is a policy of terror by a state that has no intention of giving up any territory or removing any of the 250,000 settlers from the West Bank. For the Zionists, the demonisation of Palestinians is crucial to their own raison d’être and rule. Whatever deal Kerry brokers, it won’t be worth the paper it’s written on.

Corinna Lotz
A World to Win secretary