Our sham democracy needs replacing - and soon

If you are looking around for arguments that boost the case for creating a real political and economic democracy in place of the sham one we live under, then this week has seen them piled one on top of the other.

How about the inability of MPs on the Commons public accounts committee (PAC) to get to grips with the failure of global corporations operating in Britain to pay tax on their profits? Senior executives from Amazon, Starbucks and Google were accused of secretly hiding their profits in tax havens when they appeared before MPs.

MPs admitted that a director from Amazon was “deliberately evasive” about the company’s operations. And when a Starbucks executive told MPs that the coffee chain made no profits in Britain, MPs found the story too incredible for words.

Ultimately, however, PAC members were up against the law. Google operates in Ireland and Bermuda because they offer attractive tax rates. "Like any company you play by the rules [and] manage costs efficiently to offer fair value to shareholders," said executive Matt Brittin.

In response to that, all Margaret Hodge, the PAC chair, could do was to accuse the corporations of “immoral behaviour”. But there’s no morality and certainly no democracy involved here. The bottom line is all that counts. The state created the rules to benefit global corporations and these are what they play by.

Here are two more examples from today that add to the case for change. The same PAC was back in action this morning, reporting that taxpayers were unlikely to get back any of the £66 billion spent on shares in the Royal Bank of Scotland and Lloyds when they were bailed out four years ago.

That’s the equivalent of about a year’s spending on education by local authorities who have been ordered to cut their budgets by 25%. So the taxpayer is left with a load of worthless shares while the bankers continue to pay out record bonuses to themselves. Nice.

Finally, there’s the record low turn-out for the elections for police commissioners which were held yesterday. Clearly, the vast majority of voters find participation in such elections a waste of time. And they are right. There are already local police authorities that are made up of assorted councillors and others. Why add another tier of bureaucracy?

When you add to this the imposition of the burden of the economic crisis – a crisis they did not create – on the backs of ordinary working people, you have to conclude that the current system is “undemocratic and unjust”.

This truth, contained in the initial statement adopted by the Occupy London general assembly at St Paul’s a year ago, embraces all the institutions of rule that make up the British state/political system.

The evidence is that that this system of rule favours the 1% in a variety of ways and actions and, therefore, cannot be considered democratic in the true sense and meaning of the term. Virtually every element of the establishment is now seen as exposed and corrupt. People are searching for alternatives and answers.

We should not accept that this state/political system is the end of history in so far as the story of democracy is concerned. The time is right historically to consider what a real democracy would and could look like.

To this end, we appeal to all those who support democratic change to work together to develop an Agreement of the People for the 21st century in the spirit of the Levellers who fought for democracy during the English Revolution of the 1640s.

A new Agreement should form the basis of a new constitutional settlement that favours the presently powerless majority. It should propose new forms of democratic decision-making that go beyond representation.

Seven organisations are supporting the project to create and fight for a new Agreement of the People which gets under way in London tomorrow. Be there if you can.

Paul Feldman

Communications editor

How the system is undemocratic

As the Occupy movement in London (and elsewhere), discusses next steps, it is as well to restate some basics about the extremely limited democracy we live under and what the alternatives might be.

Much of the debate in Occupy is bogged down around whether the consensus model of decision making is appropriate. Some suggest that the consensus approach is time-consuming and actually prevents or delays steps towards concrete action.

Some who defend consensus do so on the grounds that it is more inclusive than majority voting and that this is the way the movement demonstrates that it is different and more democratic than the prevailing political system.

Others extend the argument to imply that the general assembly/consensus model could if replicated somehow transform the way society as a whole goes forward and governs itself.

There is a danger, however, of missing the wood for the trees. The essence of why the contemporary social economic and political system – aka capitalism – is a shadow of democracy is not primarily the result of the way decisions are made.

Process is, of course, an issue. Most decisions are made behind closed doors and the voting system in Britain ensures that minority voices and interests are firmly excluded. But even if there were some improvements in these areas, the system would remain undemocratic.

Why? Because the system of state power is exercised primarily on behalf of dominant economic and financial interests in society. We have seen from bank bail-outs to cuts in corporation tax what these interests are.

A system compelled by law to pursue year-on-year increases in shareholder value above all else is inherently undemocratic because these interests do not (and can never) coincide with those of society as a whole. Moreover, the globalisation process has intensified this contradiction. Getting on for half of all shares on the London stock exchange are held by overseas investors, putting them further out of reach.

Social interests like decent, affordable housing, well-paid jobs, proper health care and a broad education are wider than those of shareholders. Yet the majority are excluded from economic decision-making activity. The first most people learn about job losses or cuts to services, for example, is when they are already a fait accompli.

In any case, a market-driven economy cannot possibly be democratic because interaction between the most powerful forces – hedge funds, bond dealers, handful of corporations in each sector, major investment banks etc – always decide the outcomes. Ordinary people are once again excluded. Their fates are decided on their behalf.

The political system is equally undemocratic because it accepts and encourages this status quo of minority rule. Political institutions are as much tied into the shareholder syndrome as the corporations and financial institutions. They depend on each other. Deregulation was carried through by the political system at the behest of the corporations, for example.

A politics that privileges narrow interests while claiming to rule on behalf of everyone is dishonest, undemocratic, essentially unaccountable. The system as a whole is beyond reform because of the symbiotic relationship between corporate and political power. It’s not a matter of choice but of historical necessity. Capitalism actually rules through state politics; corporate clout would be of little import if it had no political expression.

Creating a real democracy that reflects social interests can only come through a transition to a new economic and political framework. General Assemblies and the assembly process are at the heart of the movement towards this goal.

A fresh constitutional settlement that embraces democratic institutions, new forms of co-ownership, decentralised community power and a range of social rights would for the first time give power to ordinary people. How to achieve this change ought to figure high on Occupy’s agenda.

Paul Feldman
Communications editor

The end of the beginning

These are the words of George Barda, a member of Occupy London, who along with dozens of others, was thrown out of the encampment outside St Paul’s in the early hours of this morning.

Riot police and bailiffs, carrying out a court order secured by the City of London Corporation, wrecked the neat cluster of tents at the foot of the Cathedral into debris and rubble. The occupiers who had made the camp their home struggled to retrieve their meagre possessions. Some were made instantly homeless. Others were kneeling in prayer on the imposing steps going up to the Cathedral entrance. No matter - police still dragged them away. Some 20 arrests took place.

Rev Giles Fraser, whose early intervention as Canon Chancellor at St Paul’s had split the church elders, was prevented by police from reaching the protesters. Meanwhile a mile or so away, the occupied School of Ideas was also evicted despite their case still going through the courts.

By occupying a space bang in the very heart of the City of London, Occupy London constituted a challenge to the status quo that could not be ignored. The Church of England hierarchy, the City of London and the Metropolitan Police have been itching to evict them from the word go.

Physically, the occupiers endured a harsh winter, constant noise and frequent harassment. Through Tent University and hundreds of sister sites around the country, Occupy London, inspired by movements in Egypt and the United States, pioneered the freeing of spaces for political debate where none had existed before.

The issues they sought to address are more burning than ever. They sought to highlight the need to address the social, economic and political injustices of the system in a democratic way. How this is to be done is being hotly debated. There are no easy answers, but one thing is clear: the “solutions” put forward by the existing political parties serve only the interests of the 1%.

The general assembly at 7pm tonight on the steps of St Paul’s will be discussing the next steps for Occupy London, including plans for a long walk around the metropolis in May.

A World to Win salutes all those who took part in Occupy London. Doing what you have done is a bold and courageous move in the right direction. It is indeed right to reflect on what has been achieved and develop ways to extend and expand the original aims of the movement. Finding economic and political alternatives to the rule of the 1% is the way to go.

Corinna Lotz
A World to Win secretary

Don't belittle the Occupation

As Occupy London waits on the Court of Appeal’s decision on whether the City corporation can proceed with its eviction of the camp outside St Paul’s, the obituaries are already being written.

In the Guardian, which for a time assumed the role of newspaper of the Occupation, columnist John Harris bemoans the camp for failing to come up with an “exit strategy”, for over emphasising consensus decision-making and, as a result, failing to offer clear alternatives.

The occupation “had such profound problems articulating what it wants” and now, according to Harris, “the story is now seemingly one of decline, exhaustion and imminent defeat”. He is disappointed that the Occupation has no plans to out with a bang.

Readers are informed: “We all know the drill: clear demands have been spurned, any idea of leadership remains anathema, communing with mainstream politics is largely off the menu, and the running of everything is almost painfully collective.”

This painfully liberal whine begs a number of questions: What would “victory” look like in the eyes of Harris and the Guardian? The overthrow of the system? Hardly a cause that the Guardian that backed the Lib Dems in 2010 and New Labour for a decade, argues for.

As to the Occupation’s failure to “articulate demands”, it is not alone. Even the Financial Times has spent weeks and hundreds of column inches debating the crisis of capitalism in the search for “solutions”.

In Britain, the ruling political class has failed to come up with a single “demand” or proposal that does anything other than lay the burden of the economic and financial crisis on the backs of ordinary people. Such is the state of present-day democracy.

The occupation movement that began last October and spread to 1,000 locations at its peak, was a response to this social and political impasse, which was remarkably similar in content if not in form wherever the tents were pitched.

In truth, there are no simple “demands” that can form a coherent response to an historic crisis that embraces democracy, economics, finance, ecology, international relations and other features of globalised capitalism. No wonder Occupy London has had problems “articulating what it wants”.

Some at St Paul’s have favoured revolutionary alternatives while others, like those in the economics working group, have concentrated on plans for reform and re-regulation. Yet others have been content to see the practice of the occupation itself as a statement and wanted to go no further.

Occupy, to its merit, has provided an open space for debate and dialogue on these issues, even if this diversity has often been lost in the search for consensus and an over-emphasis on process. And if Occupy London attracted people with mental health and addiction problems, that is evidence of a crumbling welfare state more than anything else.

Harris tell us that the state organises in a “top down” or vertical fashion, citing the events in Athens, and implying that Occupy’s disavowal of formal leadership/organisation puts it at a disadvantage. But surely the challenge is not to replicate or mimic in actions, an alienating, hierarchical state that functions to maintain the status quo?

Following that path must lead inevitably to incorporation into the very same system of capitalist state rule. That has been the experience of the Labour Party and, to a great extent, the trade unions whose bureaucracy would make Byzantium jealous. In any case, the power Harris refers to is not subject to reform and is itself dominated and weakened by the interplay of market forces.

There is a unassailable case for a revolutionary transformation in society, one that breaks the state’s intimate relationship with capitalism and creates the conditions for new forms of democratic, horizontal rule in every sphere. Whatever happens next, Occupy London will come to be seen as part of this process.

Paul Feldman
Communications editor

Capitalism has no moral dilemma

An Occupy London delegation – not everyone at St Paul’s is happy with this – is due to debate prospects for an “ethical capitalism” tonight with city fund managers, religious leaders, former bankers, and tax reformers.

Leaving aside for the moment the somewhat fantastical notion that capitalism could/should have an ethical dimension, the question is at least a million miles away from the real world.

The global contraction is undermining belated attempts by leaders of the 17 eurozone countries to agree on a new treaty which would supersede national sovereignty. Pushed, prodded, warned and threatened by the credit rating agencies acting as the voice of capitalist finance, plans for further assaults on living standards are to be co-ordinated and enforced at supranational level. They call it “fiscal union”. Germany’s chancellor, Angela Merkel believes it will take years to achieve.

China’s manufacturing output is contracting, undermining those who asserted that the country would drag the rest of the world economy out of recession, while Britain’s has nosedived; and Brazil’s economy has gone into decline.

The democratically-elected governments of Greece and Italy have already been pushed aside by administrations by the bankers for the bankers. Alongside the feverish political activity, central banks in the eurozone are following the Bank of England, making their survival-of-the-fittest plans for when the first of the commercial banks fail.

There is no precedence for the scale of this crisis. References to the 1930s abound but the so far slow-motion crash of 2011 is surely beyond comparison. Look to Ireland. The people there were amongst the first to feel the consequences of the ending of the long credit-fuelled boom as its property frenzy ended with the collapse of the Anglo-Irish bank in 2007/8.

The measures taken to pay off the punitive cost of bail-out funds from the EU-ECB-IMF Troika, and bring about a “return to growth” have meant an astonishing economic contraction and a reduction in real incomes. Real national output has contracted by 12.5%, but that conceals a bigger slump in the day-to-day economy. Nominal gross national product (GNP) has fallen by 22%. Consumer demand is down a third. Unemployment at 14.3 per cent is misleadingly low - with no work to be had many young people have emigrated – some to work on the tar sands of Alberta.

It is already a deeper depression than the 1930s. Public sector pay has already been cut 14% on average (with a pension levy), rising to 30% for the top managers. Entry-level jobs for graduates at the big four accounting firms have dropped by a third to €21,000. Office rental costs in Dublin have halved, and house prices are down 53%.

In common with the other 16 countries, membership of the eurozone meant that a currency devaluation to improve its export potential wasn’t possible. So Ireland was forced into an internal devaluation of the cost of labour, slashing wages, salaries, pensions and public sector spending.

The second wave of the global crisis is now underway with a vengeance. As the economies of Greece, Italy, Spain and Portugal disintegrate, Ireland’s people will be in the firing line again. The Fine Gael/Labour coalition is already slashing deeper into living standards.

As a concept, “ethical capitalism” is more about theology than political economy. The bottom line is necessarily the primary concern of an economic system based on profit which in turn demands continuous growth. This is how the Protestant ethic works out in practice in present-day society.

In the end, a moral shift here or there can make no difference to dealing with a profound, historic and fundamental crisis of the system of production itself. The pressing debate to be held within the occupation and strike movements is on developing not-for-profit sustainable alternatives and how we get from A to B.

Gerry Gold

Economics editor

An economic system beyond reform

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

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

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

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

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

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

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

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

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

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

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

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

Gerry Gold

Economics editor

System is 'unsustainable', says Occupy LSX

“This is what democracy looks like,” says the first statement agreed by the mass assembly of 500 held yesterday outside St Paul’s Cathedral in the City of London.

Indeed, the camp in the heart of London’s financial district has become the site of a mass discussion about the way forward in the global struggle for democracy against corporate and financial power as well as the political system itself.

The London occupation began as one of thousands held around the world on October 15, including huge rallies and demonstrations in Madrid, Rome, across the United States, Israel and Palestine.

Inspired by the Wall Street occupation, a large green banner at St Paul’s pronounced “We are the 99%” and on Sunday a new banner appeared, saying “Capitalism is Crisis”. The tent village in front of the cathedral is now drawing into its third day, despite increasingly cold weather.

Young people from around Britain have joined with seasoned campaigners from across the world to go beyond one-off protests to assert an alternative to established political channels which they feel do not represent them. “They have cut off all our avenues for protest,” as one participant said.

The assembly on the cathedral steps collectively agreed on an initial nine point statement which emphasises the unsustainability of the current system and demands “structural change towards authentic global equality”.

A call for the setting up of People' Assemblies throughout the country, and directly for the aim of a new “constitutional settlement so that people were in control” put by democracy campaigner Mark Barrett was warmly received.

Saturday’s rally of around 2,500 was entirely peaceful as the occupiers tried to enter Paternoster Square where the stock exchange is located. Hundreds of police, including Forward Intelligence Teams and helicopters circling above, cordoned off access to the square.

In the event, the tree-shaded area in front of St Paul’s Cathedral has provided a dramatic and safe setting, thanks to the intervention of Canon Giles Fraser who appeared outside the church after a police cordon tried to force demonstrators away and told the police they were not needed.

The camp is now well-organised with neat streets of individual tents, many with handmade placards pinned on them. They are backed up by mobile toilets, a food station with piles of bananas, water bottles, donated tins, plus information, media, medical areas and even a “Starbooks” library tent.

Teams are responsible for cleanliness. The occupiers and passers are entertained by live music. Groups meet in circles to debate what the aims of the occupation are and how to achieve them.

Organisers include Facebook groups Occupy LSX, 15O Unite for Global Change, Occupy London Stock Exchange camp, Take the Square and it is supported by Spanish Real Democracy Now campaigners, People’s Assembly Network, UK Uncut, A World to Win, Right to Work campaign and People’s Assembly London.

A flyer issued by United for #global democracy demands “global governance by the people, for the people, inspired by our sisters and brothers in Tunisia, Egypt, Syria, Bahrain, New York, Palestine-Israel, Spain and Greece” and called for regime change.

The #OccupyLSX’s initial statement calls for support for the 30 November strike and student action on 9 November, but the trade unions, who are in the Coalition government’s firing line have been noticeable only by their total absence.

Going outside and beyond the existing political parties and trade unions to assert an independent democratic movement – and connecting it with the anti-dictatorship movements of the Arab Spring – is a huge step in the right direction.

Let the jaded cynics and dogmatists carp as they like. History is leaving them behind. As one demonstrator said: “We are going through a great awakening: everyone is waking up and discovering the true power of humanity. We don’t need to be treated like this any more - we are moving into a new age – and we want our futures back.”

How to achieve this aim is central to the event this Saturday, People’s Assemblies to People’s Power. Everyone is welcome to join in the dialogue at Passing Clouds Collective.

Corinna Lotz

A World to Win secretary