How to end 'dictatorship of the market'

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly inadequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor

Protests and strikes are mounting throughout Europe as governments begin to carry out the austerity measures required to attract the investment funds needed to postpone state bankruptcy.

Mounting civil unrest is undermining investors’ confidence in European governments’ ability to impose the brutal measures on their populations.

It is patently clear that agreement on a €750 bailout package to prevent the collapse of the euro is hopelessly adequate to stem the attack on the currency.

Panic moves in the USA, Germany and Venezuela yesterday against speculative investment markets are adding to the global instability as hedge funds look to move their headquarters and activities to the less-regulated East.

The German government banned “naked shorting” – the selling of shares and bonds that the sellers neither own nor have borrowed.

In the US, Chris Dodd, the Senate banking committee chairman, proposed letting regulators decide whether banks should be banned from dealing in all derivatives in a last-minute amendment to the financial regulation bill

Venezuela's Chavez-led government took control of foreign currency trading in an attempt to prevent further attacks on the bolivar.

The International Monetary Fund has forced Romania’s six-month old centrist government to promise cuts to state wages of 25% and to pensions of 15% as part of an effort to meet the requirements for the release of the next tranche of loans in a 20 billion-euro bailout package. This scale of attacks on living standards will prove to be just the down payment.

Trade unions in Romania have called a mass demonstration in Bucharest today. If their forecast turnout of 60,000 proves correct, the protest outside government headquarters will be one of the biggest since the revolutionary overthrow and execution of the Stalinist Nicolae Ceauşescu and his wife Elena in 1989.

Greek unions have called the fourth in a series of general strikes for tomorrow against a 10% cut in wages and spending in the public sector, an increased retirement age, VAT increases and the freezing of pensions.

A group of left-leaning members of the European Parliament – the United Left / Nordic Green Left (GUE/NGL) – are attempting organise co-ordinated protests in the week of 21 to 26 June against the power of the financial markets.

The MEPs have put together a series of left-sounding demands:

• Workers must not pay for the crisis - Make the super rich and bankers pay

• Solidarity with the Greek workers and for the unity of working people across Europe

• No to cutbacks, wage cuts, unemployment and increases in the retirement age

• No to privatisation of public services

• End the dictatorship of the financial markets, credit ratings institutions and the IMF

• Stop the bailouts of the banks - nationalise the banks and financial institutions in the interests of working people

But their intention to send use these protests to send “a clear message to the European establishments” and “building a European-wide resistance to the ongoing neo-liberal agenda” is wholly inadequate.

Financial markets are not susceptible to protest or even actions of the German state, representing the most powerful economy in Europe. Shares on European markets tumbled further, as did the euro, after Germany’s attempts to ban short-selling.

One London-based bond trader commented: "Nobody ever thought they'd do this in a million years and it raises the long-term question of who is now going to want to buy their debt."

A World to Win has a different set of aspirations to the MEPs. We’ll be discussing our plans to replace the dictatorship of financial market and the for-profit capitalist system with collectively owned, democratically managed not-for-profit system at our conference on Saturday.

Gerry Gold

Economics editor

In thrall to the markets

Governments across the world are engaged in a beauty contest judged by the ratings agencies which pronounce on their credit-worthiness, and the hedge funds which decide whether a country’s debt – its bond issues - are worth buying.

The closer a country like Greece, or Portugal, or Spain or the UK gets to defaulting on its debts, the more it applies the make-up to hide its decay. Greek prime minister George Papandreou is engaged in a two-pronged shadow play. It is designed to stop the bankrupt country’s ancient monuments – essential to the tourist industry from which the country derives much of it income – from falling into the hands of its creditors.

In act one of the country’s financial tragedy, Papandreou is implementing the first tranche of a broad austerity programme of savage cuts and tax increases. Act two is a world tour to gather support for a campaign to regulate the use of credit default swaps and other derivatives by speculators gambling on the likelihood of a default.

But Papandreou is himself gambling. His campaign is a populist move intended to deflect the anger of the still-powerful Greek trade unions that once supported his party PASOK. But the Greek workers are having none of it.

In protest against the planned austerity measures, Greek tax and rubbish collectors walked off their jobs for a second day on Monday. The country's two main unions have urged more than a million civil servants and private sector workers to strike today. This second general strike in as many weeks is set to paralyse much of the country.

Meanwhile, in Portugal, similar plans sparked a strike by civil servants which shut schools, courts and hospitals on March 4 in actions supported by 80% of the membership. In its historic referendum, the population of Iceland has resoundingly rejected the terms for repaying the debt guarantees for Icesave depositors held by the British and Dutch governments.

Public and private sector employers across the world are responding to the recession by driving up productivity and cutting labour costs. As a two-day strike by 270,000 UK public sector workers over cuts in redundancy pay came to an end on Tuesday, the threat was growing of action over the Easter holiday by British Airways cabin crews over pay cuts, and rail maintenance workers and signallers over job reductions and changes to working conditions.

In the United States, the economic shakeout is driving the rate of exploitation to record levels. Official figures show that in 2009, productivity rose 3.8% from 2008, while unit labour costs fell 1.7%, a record pace of contraction. There are surely limits to what American workers can stand. Trouble is brewing already at American Airlines.

Everyday brings new shocks that surprise and disappoint those who search for signs of recovery. The UK’s declining exports and widening trade deficit despite a 25% decline in the relative value of the pound, are just the latest in a long line of figures that lead it inexorably to join the sovereign debt crisis on the way to full-blown state bankruptcy. No wonder Gordon Brown today admitted that there were “substantial risks ahead” for the economy.

The financial markets are relying on New Labour and/or the Tories to deal with the public spending deficit at the expense of ordinary people. Brown’s denials on this subject should be taken with a pinch of salt. Capitalism is cornered in country after country and is fighting back the only way it knows how. The increasing resistance by workers around the world has to point towards the strengthening of international alliances on the road to putting capital out of business once and for all.

Gerry Gold
Economics editor