Facebook riches show how obscene the system is

As people wander the towns and cities of Greece and Spain today looking for work, food and simply the means of survival, in California a company that makes no profits at all will sell its shares for over $100 billion.

Mark Zuckerberg and the other people behind Facebook will be richer beyond their wildest dreams, billionaires many times over, by close of business as the corporation goes from a private enterprise to a public one by selling shares on the stock exchange.

While the Greek Olympic Committee humiliatingly had to find sponsorship from a German car firm to stage the torch handover yesterday because the country is bankrupt, Zuckerberg are his friends are laughing all the way to the bank.

The contrasts between Facebook and the rest of us don’t just border on the obscene – they are way beyond that. In the United States itself, the real unemployment rate is said by experts to be closer to 14% than the 8% cited by official figures. Hundreds of thousands are homeless and many millions below the poverty line.

The Facebook “flotation” is also another prime example of fantasy finance, the same stuff that drove the debt-laden boom of the first years of the century and eventually helped to bring the global economy down.

Millions of small investors, drawn by the prospect of easy money are, however, likely to get their fingers burnt as the major financiers move in.

With the global economy on a knife-edge the unreality persists. Still the bankers are paid in telephone numbers (on top of their bonuses) while 25% are out of work in Spain and the Greek standard of living has fallen off a cliff as a result of austerity demanded in exchanged for loans.

The eurozone crisis is intractable. It’s not a matter of if but when Greece either leaves or is ousted from the single currency. Fresh elections next month seem certain to propel the left-wing Syriza into government. Its leaders have pledged to renegotiate the bail-out terms with the EU and European Central Bank but stay in the euro. They can dream on.

As in Spain, where 16 banks were downgraded overnight, people in Greece are beginning to take their money out of the banks just in case they wake up one Monday and find their euros have been replaced by the New Drachma or the New Peseta at much lower values.

Judging by the near hysteria from prime minister Cameron in London, the impending break-up of the euro will precipitate an economic slump as well as a banking crash that according to the BBC’s Robert Peston was only narrowly avoided at the end of last year.

Martin Wolf, the Financial Times’ leading analyst, confirms this. He wrote last night: “These perils are not of concern to the eurozone alone. Taken as a whole, this is the world’s second-largest economy, with the largest banking system. The risk that a bigger eurozone upheaval would cause a global crisis is real. As frightening is the likelihood that eurozone crises would become permanent features of the world economy.”

There is no future for the majority along this road. The capitalist system is actually broken and beyond repair. There is no choice but to think along the lines of reconstructing the economy along lines of co-operation, mutuality and not-for-profit, democratically-owned enterprises.

That would involve cancelling all sovereign debt. Bond markets that are presently holding countries to ransom would be shut down, along with the stock markets. Investment bank speculation would become a thing of the past. All the expertise in the financial industry would be put towards creating new, equitable monetary arrangements between countries.

This scenario undoubtedly seems a long way to most people. But with the crisis reaching a tipping point, these are the sorts of considerations we will have to apply ourselves too in the near future.

Paul Feldman

Communications editor

The state tools up for confrontation

The summonsing of social networks Facebook, Twitter and the Blackberry messenger service to the Home Office in London today is part of a growing crackdown by the state in the wake of the riots in a number of English cities.

Prime minister Cameron suggested in a speech to Parliament that the government should be able to “disconnect” social networks and phone networks at times of civil disorder. Today’s meeting, hosted by home secretary Theresa May, is being held in response to his call.

There are already reports that the spy agencies MI5 and GCHQ are working to break Blackberry’s encryption technology that has made it a first choice for business users and state officials.

This is just one example of a co-ordinated campaign by the government and state institutions to set aside democratic niceties like the rule of law and human rights legislation in the wake of the riots.

Since the riots, the government has announced plans to weaken human rights legislation, allow police to use water cannons and rubber bullets and said that police will be given blanket curfew powers. This is the state tooling up for social confrontation on a serious scale.

As for the rule of law – whereby the courts are immune to political and police pressure and accused cannot be detained unreasonably or without charge – that is already being seriously undermined by the actions of the police and the government.

Cameron told MPs it was about time decisions were made in Parliament, not in courts. Attacking one recent decision, he said “how completely offensive it is to have once again a ruling by a court that seems to fly completely in the face of common sense". That is the language used by petty dictators everywhere.

He set the tone for the courts when he said that anyone convicted "should expect to go to jail". He threw his support behind the four years jail for Facebook comments, saying the court had decided "to send a tough message".

The voices in opposition have been few and far between. Labour has said nothing, while a few Liberal MPs have bleated their fears. Leading criminal barrister John Cooper QC warned that judges and magistrates had a duty "not to be influenced by angry Britain", describing some of the sentences handed down already as "disproportionate and somewhat hysterical".

Not long ago, magistrates courts were known as police courts, where the word of a police officer was never challenged. The name may have changed but they have reverted to type since the riots.

Over 62% of those arrested over the riots have been remanded in custody, compared to the average of 10% for those appearing before a magistrate. That’s because the police wanted it that way.

A document written by the Met suggested that no one arrested in or after the riots should be let off with a caution – regardless of the offence.

Everyone arrested should be held in custody, with a recommendation that bail should also be denied. The document says: "The volume of prisoners being processed makes it impractical to bail for the purpose of protracted investigation.”

Solicitor Edward Kirton-Darling, of Hodge, Jones & Allen, whose client was denied bail, said: "The right to bail is a long-standing and essential part of our criminal justice system. It should be carefully considered and each case should be looked at on its own merits.

"In relation to the riots, it seems that the Metropolitan police took a strategic decision to apply a blanket ban and deny everyone bail, no matter what their circumstances. I consider this policy is unlawful as a result."

Hodge, Jones & Allen are seeking a judicial review and their letter to the Met describes the policy as amounting to "unlawful arbitrary detention" of people.

Undoubtedly, the state is preparing for more than a repeat of the disorganised riots. A developing social crisis, prompted by a failing economy and spending cuts, is surely what the authorities have in mind this coming autumn and winter. The state is laying down the gauntlet and campaigns for democratic alternatives like people's assemblies are more vital than ever.

Paul Feldman

Communications editor

Making the Web work for us

Web 2.0 with its social networks and huge broadband speeds and capacities, combined with mobile telephony reveals the deep contradictions in what some still believe is an impregnable system.

Globalised corporate capitalism needs to supersede itself technologically at break-neck speed in order for companies to make a profit. The logic of the new technologies means that they need more and more customers.

But the profit-making aspect is lost in the realms of speculation. Like the financial bubble that broke in 2008, the social network extravaganza is full of “known unknowns” in terms of financial viability.

Facebook claims that one in 12 people on the planet actively use its site, just five-and-a-half years after its founders Mark Zuckerberg and fellow students at Harvard University set it up. Flickr, the photo uploading and sharing website, also launched in 2004, now hosts 35 million members and stores over 4 billion images.

Although Facebook is banned in China and Pakistan with their joint population of 1.5 billion, along with other the micro-blog sites, Twitter, search engine Google and email systems have been taking even poorer countries in Africa and Asia by storm. Twitter, which gets 300,000 daily new sign-ups each day, is currently expanding into a custom data centre to provide its members and with a better service.

But it seems that in terms of popularity even in this area, the market has its limits. While in Africa and Asia the numbers are rising more rapidly than elsewhere and Twitter is also growing at a staggering pace, the actual rate of increase, for Facebook at least, is going down.

Facebook increased from 300 million users to 400 million in just one month. But reaching 500 million took five months. The number of people with access to computers and mobile phone required to be active on social networks is not infinite.

And there is a techno-disconnect between social networks and mobile networks, according to technology experts. They suggest a new generation of sites on Web 2.0 is now necessary to avoid a repeat of the “post-dotcom exhaustion of 2002”, but so far no-one really knows what this means in practice.

The other question being asked is are these giant network sites able to make money for their owners? Are they valid business model? Most people think not. Even with half a billion users, Facebook is unlikely to earn its forecast revenues, the Financial Times suggests.

Naturally, there are those who highlight the dark sides of social networking and how it can be used for surveillance and criminal activities. The geo-app Foursquare, for example, is said to be a “stalker’s dream”.

Like all technologies, social and image networking can be used for bad ends. But, by breaking down barriers of time and space, it has expanded human connectivity. Facilitating virtually free communication between people from close neighbours to others in far flung corners of the globe, its revolutionary potential remains vast.

Even the church is attempting to revive itself by using Twitter to take Holy Communion and even get married. Trinity Church in New York’s Wall Street used Twitter to update its faithful with the Easter passion play, tweeting messages like “passionplay via @-Jesus Christ: Father forgive them, they know not what they do”.

The growing movement against the impact of the global economic and political crisis also needs to see the light. While social networking has been used to organise and even challenge the status quo, as in Iran, its political possibilities remain largely under-used. Turning the communication technologies developed by capitalism against the system of profit itself is key to our very own emanicipation.

Corinna Lotz

A World to Win secretary