Ash cloud shows the folly of capitalism

There is some faint irony that natural causes emptied skies over Europe for a week, triggering anguish in business circles over the likely impact of longer-term airspace closures on economic growth.

Yet decades of unsustainable growth, including the recent burgeoning of air transport, have brought the planet’s ecosystem to the limit of its ability to support life. Climate change activists and the rapidly growing global Transition Initiative have pointed this out for some time.

The Transition movement has been particularly vocal, warning that the activities of profit-seeking corporations have depleted many of the natural resources that we now depend upon. Globalised production and distribution can’t function without the oil which, they’ve argued, is passing the peak of production.

Those who’ve been warning of the catastrophic social, economic and political impacts of failing to plan for either the declining availability of oil, or to minimise the damage to the environment from continuing to burn it up in the engines of cars, planes, heating systems and factories, have got a surprising new ally.

The US military is warning that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command comes as the price of petrol in Britain reaches record levels, cutting into the pay of those who have to drive to get to work, and the cost of crude oil is predicted to pass $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report.It adds:

"While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India."

Despite repeated denials from the International Energy Agency and the oil companies which are intent on pumping and squeezing the last drop of profit from millions of years of fossilisation, there can be little doubt that demand is now passing supply. As oil runs out, it is certain to lead to increased tensions between the United States, China and oil-producing countries like Iran and Venezuela who do not share the political interests of the major capitalist economies.

What the volcano’s ash disruption to flights has demonstrated is that there is no future for a civilisation based on continued life-threatening, oil-burning economic growth.

The battle between airlines’ profits and passenger safety, and the likely political fallout from aircraft damaged by volcanic ash, has put most other news in the shade. But it cannot hide the fact that the British state is on the edge of insolvency, a consequence of the collapse of the credit-fuelled boom urged on by New Labour and the Tories.

Today’s figures on unemployment show the human price being paid for an unsustainable capitalist system. The number of people without a job in Britain rose by 43,000 to 2.502 million in the three months to February, the highest total since October-December 1994. That took the jobless rate up to 8.0%, the highest since 1996. All the major parties are planning huge cuts after the election, adding tens of thousands more to the dole queue. Whichever way you look at it, the case for revolutionary solutions to the crisis gets stronger every day.

Gerry Gold
Economics editor

Don't let New Labour divide and rule

If you can’t beat them, you can always imitate them. That was the message yesterday from prime minister Gordon Brown when he returned to his “British Jobs for British workers” theme in a speech on immigration.

New Labour is clearly intending to oppose the neo-fascist British National Party by stealing some of their rhetoric and policies. That’s the only explanation for Brown’s “get tough” speech on immigration– his first on the subject since becoming prime minister – and home secretary Alan Johnson’s “admission” that the government has “got it wrong” on the issue.

Not that New Labour has been soft on asylum seekers, refugees and people wanting to work in Britain. Since 1997 there have been no fewer than seven major pieces of legislation that one way or another target immigrants, legal or otherwise.

Only last month the government implemented significant cuts to the amount of money it currently gives to asylum seekers awaiting a decision on their claim. Rates were set at 70% of income support. But from October 5, single destitute asylum seekers over 25, received even less, with rates falling from £42.16 to £35.13 per week. Asylum seekers are not allowed to work, so are restricted to the amount set by the government.

Yesterday Brown announced that more than 250,000 skilled engineering, care and catering jobs are to be closed to non-European overseas workers next year and that local vacancies should as far as possible go to local recruits. Foreign students will also find it tougher to get into Britain.

A draft immigration bill published after Brown’s speech included proposals to replace the deportation process with a general power to expel failed asylum seekers and illegal migrants. Families who have been told to leave but who are unable to be returned will have cash welfare payments replaced with a plastic pre-paid card while others will lose benefits altogether.

Refuge and Migrant Justice said that buried in the bill was provision to give ministers the power to overrule bail decisions made by judges in immigration and asylum cases.

Donna Covey, Chief Executive of the Refugee Council and Chair of the Asylum Support Partnership said: “We are appalled that the government has moved to cut support to asylum seekers, who are some of the most vulnerable people in our society. Of course, these are hard times for everybody and no-one should receive preferential treatment, but we must remember that many of these people have experienced torture, persecution, war and human rights abuses and most live in already deeply impoverished circumstances.”

Unlike bankers, asylum seekers and refugees have no clout and are easy targets for unscrupulous politicians who are queuing up to play the race card during the run-up to the general election. The money the state will save is miniscule compared to the vast sums spent on bail-outs. Cynically, New Labour is playing to the right-wing press and trying to win voters away from the BNP by showing it can “get tough” on the most vulnerable. This is nothing but scapegoating in search of votes.

Meanwhile, thousands of people continue to lose their jobs in the banking sector while BT is axing 15,000 from its payroll. The merger between British Airways and Iberia will undoubtedly lead to a jobs massacre. Millions have been forced into part-time working or taken pay cuts to avoid joining the dole queue. None of this is to do with immigration and everything to do with the global crisis of capitalism. The old trick of divide and rule is being used by New Labour to divert attention away from our common enemy – the bankers and corporations who between them have produced the greatest economic disaster in history.

Paul Feldman
Communications editor

The only way to stop the Tories

As time runs out for the New Labour government, the big question is how do we stop the Tories? The answer is made more difficult by the fact that there is no practical electoral answer to this matter.

For example, there is no way that you could advocate a vote for New Labour at the forthcoming general election. The party led by Gordon Brown is essentially capitalist in its outlook and practice, as it has shown in more than 12 years in power. From the beginning under Tony Blair, it assumed the role of the political management team in Britain for global corporate and financial power.

Policies inherited from the previous Tory governments have been deepened and applied in a ruthless fashion across the public sector, from education to health, while the private sector was set free to pursue profit and promote globalisation. Internationally, the government pursued neo-imperialist policies by invading Iraq and Afghanistan while domestically New Labour constructed the edifice of an authoritarian state.

Now that the world capitalist economy has plunged into crisis, New Labour government is in trouble politically and with the electorate. Tough! There’s no way anyone should help them out by lending them a vote at the next election and certainly not on the spurious ground that the Tories “will be worse”.

As for voting Lib Dem, well the party has swung so far to the right under Nick Clegg that even a forensic scientist would be hard-pressed to tell them apart from David Cameron’s Tories.

Over the last couple of decades not only have the three main parties have coalesced while the capitalist state, including the Parliamentary system, now openly rather than covertly functions in the service of economic and financial elites, as the bank bail-outs demonstrated.

So where does that leave us? What is certain is that the economic crisis is set to get far worse over the next six months, that whoever wins the election will be faced with an immediate political crisis and that we will have to produce some unconventional solutions to find a practical way forward.

In an interview with the Financial Times today, Michael Geoghegan, chief executive of HSBC, warns of a second downturn in the coming months. One of the better capitalised banks, HSBC is holding off from expansion plans in the expectation of a W or “double-dip” recession.

Geoghegan has no doubt studied the latest unemployment figures from the United States, which show that 7.2 million people have lost their jobs since the beginning of the current recession in December 2007. The total population of the unemployed in America is now 15.1 million. One estimate is that about one-in-six employable Americans are without a job.

Meanwhile, California – the eighth largest economy in the world – is bankrupt. Thousands of public sector workers are losing their jobs and having their pay cut. Students are revolting against plans a mid-year increase in tuition fees. This is the kind of crsis that the Tories, or whatever political formation comes out of the election, will face. Not some cuts here and there but ruthless, savage, drastic and draconian cuts in the midst of a recession. And beginning the day after the election.

So to answer the question about how to stop the Tories, it means building a movement that recognises what’s at stake. A World to Win’s People’s Charter for Democracy suggests how economic and political power could be transferred out of the hands of the powerless majority. The way forward, in our view, lies beyond putting a cross on a ballot paper for a Parliamentary system that masks the need for the state to dispense with democratic niceties in order to impose the crisis on ordinary people.

Paul Feldman
Communications editor

Darling's big fraud fools no one

Alistair Darling’s crisis budget is a gigantic attempted fraud that will fool no-one. New Labour’s Chancellor bears comparison with Bernard Madoff who, last month, was convicted of the largest investor fraud ever committed by a single person

Like the most unscrupulous of doorstep loan sharks, Darling is launching an historically unprecedented mis-selling scam of financial products to investors from financial institutions and foreign governments to fund record amounts of state borrowing.

Those who will be asked to front up the cash are already concerned that they may not be repaid, even allowing for savage cuts in public spending and increased taxes that are built into the budget that will shatter vital services and cut living standards drastically.

Government borrowing is set soar for years to come, from a staggering £220 billion this year and close to £600 billion in four years’ time – as high as 79% of the value of annual production by 2014.

Experts in government bonds and currency speculators were among those shocked by the figures, which don’t even tell half the story because they are based on wildly optimistic projections of economic “recovery”. The falling pound heightened doubts that the loans so desperately needed to delay looming state bankruptcy would be forthcoming.

After the budget, the cost of government borrowing actually rose, leading Financial Times commentator Martin Wolf to observe: “Should investors decide that a return to fiscal stability has become a remote prospect, they may turn against the UK suddenly and brutally.”

Mark Frey, head foreign-exchange trader at currency services firm Custom House, described the debt load as “an immense price tag,” and one that the UK may not be able to afford. "The problem for Darling and Prime Minister Gordon Brown, however, is that they may not be able to afford the economic carnage that could ensue with a smaller stimulus package, either." In other words, New Labour is caught whichever way they twist and turn.

In the face of a deepening global collapse of production, and against every other prediction, Darling is dreaming of – and has based his measures on – a resumption of growth by the end of the year. But as soon as he had finished delivering his budget, the International Monetary Fund (IMF) cast serious doubt on Darling’s forecast.

In its world economic outlook, the IMF predicts that recession in the UK will be "quite severe", with the economy shrinking by 4.1% this year, and continuing to contract, by 0.4%, in 2010. In his patently absurd budget, Darling forecast 1.25% growth in 2010.

Even if Darling’s fantasy were to be realised – and it won’t – his actions spell out at least a decade of the deepest austerity yet imagined to be imposed on working, and increasingly not working, people as well as older people dependent on public services.

With unemployment soaring to 2.1 million - already reaching one in five amongst young people in South Wales – and widely expected to exceed 3 million by the end of the year, it is becoming crystal clear that the cost of the collapse of the credit-fuelled boom is too heavy for society to bear.

The unfolding economic and financial crisis is not only more serious than any experienced in the three and a half centuries of society’s rule by capital, but is qualitatively different to all preceding examples. The nearest historically comparable collapse is 1929, a minnow in relation to today’s post-globalisation catastrophe. It only came to an end after an orgy of industrialised destruction in World War Two.

Now Britain is on the verge of state bankrupty, with all that implies for what is left of our democratic rights. To prevent a repeat of history, a qualitative leap in social relations – both economic and political – is needed, replacing rule by capital by ecologically sustainable production for need, and creating a new political system that is based on the truth rather than the big lie. As somebody else once said, there is no alternative.

Gerry Gold
Economics editor

End a system that wrecks lives

This government is interested only in saving capitalism, not jobs. That’s the meaning of today’s unemployment figures, which show that people’s lives are being wrecked by a system that’s breaking apart. That’s the significance of writing a blank cheque to bankers, who promptly hoard taxpayers’ money to bolster their shattered balance sheets, while jobs disappear in their tens of thousands.   

No one knows how much the state has pledged to the bankers because the government refuses to come clean on that one; what we do know, however, is not a single penny has gone to save one job since the crisis exploded last summer. So official figures show that unemployment in November reached 1.92 million in November last year, a rise of more than 131,000 in three months. The real total is bound to be higher because many people do not register while others from outside the UK, like Polish workers, have simply returned home. 

Anyone looking for a positive response from New Labour will have to forget it. All employment minister Tony McNulty could say was that the figures were "very disappointing" and predicted things would "get worse before they get better". Just what sacked workers wanted to hear as they search for the address of their local unemployment office (aka “Job Centres”). 

McNulty and his fellow ministers labour under the illusion that bailing out the banks will get them lending again and that the economy will magically revive. This says more about New Labour’s infatuation with finance than it does about the government’s ability to grasp even the bare essentials of how capitalism operates. 

The global banking crisis actually expresses processes within the “real economy” and not the other way round. So long as the world economy continued to grow, and people repaid their borrowings, the merry-go-round could continue. As long ago as 2006, however, some American households hit by falling income, stopped paying their mortgages and the rest, as they say, is history. 

Suddenly exposed to the light of day were the results of the tendency for capitalism to over-produce commodities which consumers cannot purchase out of their normal income. This obvious contradiction itself expresses the predisposition for the rate of profit to fall as output per worker increases. Today’s crisis is thus the unravelling of this fatal flaw at the heart of present capitalist economic social relations. 

Not that New Labour could or would do anything to resolve this paradox, even if it could understand what was going on. For one, the state is capitalist in its nature and cannot, therefore, act in a way that challenges private ownership of big business and finance run for profit as the basis of the economy. Moreover, there is an objective, unstoppable momentum to the economic crisis which capitalist governments are incapable of arresting. 

You could actually see this in a graphic way yesterday, both in Britain and the United States. As the markets digested the second Brown government bail-out, shares and the pound fell sharply. Even as Obama was sworn in as president, banking shares nosedived on Wall Street. Firms continued to announce redundancies and closures because orders had dried up. 

Yet, you can conceive of a state and a government that could act. One that would order a halt to redundancies and closures pending a reorganisation of the economy on co-operative lines. A state that would switch funds from the banks to pay the unemployed the average wage while the economy was reorganised. A government that would reconstitute the financial system on the basis of mutual ownership and control. A democratically-controlled political system that would issue a clarion call to workers in other countries to do the same. Getting to this point requires decisive, conscious revolutionary action. 

Paul Feldman
AWTW communications editor

Brown prepares to cut and run

In 1997, New Labour chose Things Can Only Get Better by D:ream as its theme song for the election campaign. As speculation rises that prime minister Brown may call an election early in 2009, it is time for someone to record Things Can Only Get Worse. 

With unemployment soaring towards the 2 million mark by Christmas on today’s figures, reports that New Labour may cut and run before the full impact of the recession in human terms is revealed makes sense – if your only concern is holding on to power that is. 

The government knows that the financial and economic crisis is spiralling out of control. They’re just not telling anyone else that this is the case. So call a snap election around the idea that Brown has “saved the world”, as he told the Commons last week, and the electorate is likely to choose the devil they know (our saviour) rather than the one they don’t (Cameron).   

Or so the thinking inside No.10 goes. But it’s a race both against time and against the unpredictable. All the measures taken by the government – bailing out bankrupt banks, slashing interest rates and VAT and stoking up government debt – have had no discernible impact on a crisis that is global in scope and capitalist in nature.

The only shot left in the locker is printing more money, known as “quantitative easing”. And this is under serious consideration by the Bank of England, which would achieve this by buying more government bonds than are required and flooding the banks with the proceeds. No wonder analysts call this the ”nuclear option”. 

Such a move would be desperate and constitute an indictment of New Labour’s failures. You can see why Lord Mandelson (aka the Prince of Darkness) – who is about to part privatise the Royal Mail, adding to the jobless total – is urging Brown to make a dash to the polls before the Bank of England (which was set free by Brown when chancellor) pulls the rug from underneath the government’s feet. 

Experts are warning of a jobs catastrophe in 2009, with unemployment likely to top 3 million according to the Bank of England's labour market analyst, David Blanchflower."Where is the light at the end of the tunnel? I can't see any," he says. If he could actually see a light, it would probably be the train of depression coming the other way, for his estimates could well prove too conservative.

For example, more than 350,000 managers alone could lose their jobs during the next 12 months, according to the Management Consultancies Association (MCA), which also reports that two-thirds of top companies are expecting to lay off workers next year. Today’s official unemployment figures only go up to October and do not include the avalanche of job losses announced recently in banking and commerce. 

So as you ponder the “choice” between a capitalist government already in office and one waiting in the wings, here’s some preliminary advice about how to vote it you are invited to a polling station sometime in February 2009 – don’t! Why waste your hard-won right to vote on a bunch of creepy and useless politicians who will take your money and hand it over to the banks, big business or whoever? In fact, to anyone except those who need it most. 

An election in these circumstances will be a fraud on the voters and a further insult to the democratic process. Our time would be better spent campaigning for radically different, not to say revolutionary, solutions to a crisis which will otherwise engulf us all. 

Paul Feldman
AWTW communications editor

 

 

Next stop the workhouse

The world is going to hell in a handcart, driven by the madness of the capitalist market economy. But wait, New Labour is about to leap into action to save us all. Today, Her Majesty’s government will through the Queen announce lie detector tests aimed at “benefit cheats” and harsher financial penalties for the disabled and lone parents who are considered not to have made a supreme effort to find work.

At last the government is getting its priorities right! The poor are obviously the main problem in society, if not the cause of the economic crisis, and what they need is discipline and more discipline. My only surprise is that New Labour has not actually resorted to a reintroduction of the Poor Law. In Victorian England, when people scrounged and begged instead of working for a pittance they were sent to the workhouse. That soon sorted them out!

The rate work and pensions minister James Purnell is going, however, the workhouse could will be his next proposal. Yesterday he published a review prepared by the academic Paul Gregg that proposed that all lone parents with children as young as one ought to be required to make themselves ready for work. Only in July, he proposed that it should be a requirement for lone parents with children aged seven or above to seek work (it is estimated there are 600,000 lone parents with children aged under seven). At this rate, those with unborn children will soon be in the frame.

"Sanctions would only apply to those who refuse to take steps to be job-ready that have been jointly agreed with their personal advisers in jobcentres," said a ministry official. From 2010 many of these advisers will be employed by the private sector or charities, as the privatisation of welfare continues apace in New Labour’s brave new world. Some of the charities now fear that mass unemployment will render their contracts useless. Have no pity for those who scrambled to help to implement the government’s agenda.

Purnell’s proposals have drawn a fierce reaction. John McDonnell MP described them as “New Labour's reactionary flailings” and warned: “The pressure that will be placed on lone parents will have a direct impact on the care that they can provide to their children - and affordable childcare is still not sufficiently available.” The TUC general secretary, Brendan Barber, said that the government’s approach “assumes a utopian world of unrestricted childcare and widely available jobs where only the lazy opt for life on the dole" while "thousands of people are joining the dole queue every day through no fault of their own." Barber is right about that, at least.

Yesterday, Glasgow-based Bowie Castlebank Group, which include photo-processing chains Klick Photopoint and Max Spielman and dry cleaner William Munro, was the latest firm to be placed in administration. The company employed 1,664 people at 314 shops across the UK. A survey from Markit Economics showed that the job market weakened rapidly in November as permanent placements declined at a record rate. The drop in permanent and temporary jobs was faster than at any point in the survey's 11-year history. "The UK jobs market is heading downhill at breakneck speed," said Mike Stevens at KPMG, a sponsor of the survey.

A coalition of trade union leaders and poverty campaigners has condemned the attacks on claimants and called on “the government to rethink its plans”. That is simply not going to happen. New Labour’s answer to the economic and financial crisis is to drive down conditions and wages to help get capitalism back on its feet again. If just one union leader recognised that fact and opened a campaign to defeat the government, it would be a step forward.

Paul Feldman
AWTW communications editor

There is another way

Trying to solve a global capitalist economic and financial crisis fuelled by credit and debt, which has driven consumers to the wall and left increasing numbers unemployed, with marginal (and temporary) tax cuts only shows how desperate the Brown government has become and is little more than PR exercise.


We are in the midst of the greatest destruction of capital since the 1930s, where the means of production are being wiped out on a vast scale in every country on every continent. There is a self-generated momentum to this process which waits for no one, including governments like New Labour. Yesterday Citibank announced another 50,000 job cuts and manufacturers like GKN have cut production by 20%. As John Willman, business editor of the Financial Times acknowledges:

Nor is there much comfort in the hyperactivity of policymakers, recapitalising banks, bailing out insurers, cutting interest rates towards zero and turning on the public spending taps. This is pushing at a piece of string, with no certainty that enough will be moved at the far end to stem the decline. In the present mood of panic, much of any extra money pumped into the economy will be used to reduce debt or build up savings. A lot of the rest will be spent on imports that will benefit the economies of other countries, which may be less able to reciprocate.

The fact is that neither New Labour nor any other capitalist government has an answer to the first major world economic crisis for nearly 80 years. One of the reasons is that corporate-driven globalisation has created a beast that lives (and dies) beyond the reach of national states and governments. The transnational corporations and banks that are slashing jobs and production are not bound by borders or “national interest”. They form the interlocking aspects of a truly global economy that has supplanted the national-based economies that pre-dated the most recent period of capitalist globalisation.


Gone are the days when unemployment in Britain could be eased through better credit terms or higher wages. Decisions about jobs and production are, in most cases, being decided by global corporations like GlaxoSmithKline operating on a transnational scale with regard to only one thing – sustaining the bottom line and shareholder value on stock markets across the world through ruthless cost-cutting operations. The pharmaceutical conglomerate owes no allegiance whatsoever to the British state which, in turn, has no control over the corporation’s decisions.


Of course it’s possible to imagine some immediate decisions that could stem the jobs haemorrhage and keep people in their homes as a prelude to reorganising the economy on more rational lines. For example, it would make sense to take over the failing building developers and materials suppliers, along with available land, and use their resources to enable the 250,000 unemployed construction workers to return to work. They could build the new homes required to solve the housing crisis and these could be made available at a reasonable rent. Eliminating the needs of shareholders and the exorbitant price paid for land would mean that public investment would go a lot further than the same resources in private hands.


Empty offices and factories could be requisitioned and plans drawn up for the production of socially-useful services and products like solar panels or eco-friendly vehicles. Those without work could be paid the average wage to enable them to pay their bills and support their families until new jobs are available. Public transport (including the railways) could be made available at an affordable price so that no one is left isolated. Banks now wholly dependent on state finance could be taken into public ownership and run by boards of workers, consumers and elected officials as mutually-owned businesses.


Of course, the present capitalist state and proxy governments like New Labour have no intention of challenging the status quo in this way. Both the immediate and long-term answer to the present crisis lies, therefore, in creating a new political democracy that can act on behalf of the majority instead of the minority who have wrecked the economy and now threaten the futures of millions of people.


Paul Feldman

Communications editor

New Labour isn’t working

This is where New Labour came in. Unemployment is now back to 1997 levels and the claimant count has seen its biggest increase in over 15 years as the global economic and financial crisis sweeps through the highly vulnerable, debt-ridden British economy. It ought to be where New Labour goes out.

The Brown-Blair governments participated enthusiastically in the build-up of debt and fantasy finance that is now wreaking its havoc in terms of its devastating impact on real people who are losing real jobs that have paid mortgages and fed and clothed families.

Losing your bank through reckless, speculative behaviour entitles you to massive state bail-outs. By contrast, losing your job in Brown’s Britain plunges you into instant poverty. The Job Seeker's Allowance (JSA) for a newly unemployed single person over 25 is just £60.50 a week. New Labour has not only made it far harder to claim, but has also reduced the JSA’s real value year by year.

The Trades Union Congress (TUC) calculates that if JSA had been increased in line with earnings over the last 30 years, the rate for a single person over 25 would now be more than £100 a week. To make matters worse, workers have no right to any redundancy pay until they have been working for their employer for two years and roughly one worker in three is excluded by this rule, the TUC says.

Despite the bleating of the TUC and pleas for an increase in the JSA, New Labour doesn’t give a damn that recent research into minimum income standards has shown that a single working age adult needs an income of at least £153 a week “in order to have the opportunities and choices necessary to participate in society”.

Spurred on by the Blair-Brown governments’ infatuation with financial services and the City of London, the productive economy has fallen into sharp decline; the number of manufacturing jobs has plummeted to 2.86 million, the lowest figure since records began. And today’s unemployment figures take no account of redundancies announced yesterday, with 5,000 jobs going at firms that include Virgin Media, Yell, Taylor Wimpey and GlaxoSmithKline.

New Labour is not the only thing that isn’t working. The government presides over a free-for-all capitalist system that is clearly heading for slump at a rapid rate, with all that means for the lives of millions of ordinary people throughout the world. The crisis is way beyond solving through interest rate reductions or even modest tax cuts.

People are being laid off because their employers – over whom they have no control – can no longer make a profit selling the goods or services they supply. Yet in many cases, although not all, the jobs that are going are socially useful in terms, for example, of building new homes or researching new drugs.

Therein lies the problem – and the solution. We could keep the jobs, scrap the profit-driven approach and run an economy on the basis of social need rather than the requirements of shareholders and stock markets. Getting there is obviously a major, revolutionary challenge. It entails getting rid of governments like New Labour and turning the state into a democratic instrument for social change in place of one that turns its back on the unemployed. A first step would be the occupation of all workplaces threatened with closure or job losses.

A World to Win has come up with bold proposals in its publications A House of Cards and Unmasking the State. Check them out and then join us on this mission.

Paul Feldman
AWTW communications editor

Too much 'civilisation'

Nothing sums up the insanity of the capitalist system more than unemployment. Just think about it. People want to work; the means of production like offices, shops, factories, plant and equipment all exist; yet all of a sudden, workers are thrown on the dole.

People desperately need affordable housing, for example. Yet tens of thousands of building workers have lost their jobs this year, developments have been abandoned and stockpiles of bricks are growing. And so does homelessness. The causes are not difficult to establish and lie right at the heart of capitalism.

Developers and house builders can’t make a profit because house prices have soared beyond many people’s reach and sales have slumped; the banking system has seized up so there are no mortgages in any case; and levels of personal debt weigh like millstones on the population’s necks. So, no profit equals no building work equals unemployment.

While the bankers are bailed out to the tune of £37 billion – with taxpayers’ commitments possibly rising to £3 trillion – the people who actually do the work and create real wealth as opposed to fantasy finance, are discarded without as so much as a by your leave. No bail-out for them!

Long quotes from 19th century philosopher-revolutionaries can be a bit dry and seem remote from 21st century global capitalism. But when you read what Marx and Engels had to say in 1848 in the Communist Manifesto, you are struck by how fresh their summary of capitalist crisis is:

Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule.

It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of overproduction. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why?

Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them.

Brilliant! The productive forces are too powerful for the system of private ownership of the means of production. So they must be and are destroyed, jobs included. This what bringing “stability” back to the banking system actually means in practice. The case for reorganising society on co-operative, not-for-profit lines has never been stronger. That would give us the control over resources to keep people in work and meet basic needs like housing. Creating the means to turn the old order upside down is the immediate challenge.

Paul Feldman
AWTW communications editor

The state we are in

That capitalism today requires incredible, almost unimaginable levels of financial support and assistance from the state just to keep the system on life support in intensive care, is beyond dispute. What is also apparent is that both the state and the cap-in-hand former masters of the universe who run capitalism have fatally wounded the case for their own continuance.

What is the point of a state that is bankrupting the very same state in the interests of big business and the banks (the claim that his will help ordinary people is one of the great lies of the crisis)? In Britain, the £3,000 billion bail-out of the banks brings a whole range of tottering institutions right into the heart of the state. The money to buy up shares in fairly useless companies is, of course, going to be borrowed at interest.

No one is rating highly the chances of getting this money back. The economy is sliding deeper into recession, with today’s unemployment figures expected to show a steep rise; the capacity of ordinary people and companies to repay debts/mortgages/loans to the banks is ebbing away fast. As the major shareholder in several banks, what will the state do? Using its powers of force and coercion, the state will defend its interests in ways which today seem inconceivable.

Which brings us to the nature of the “state”. The takeover of the state by the banks over the last few weeks should leave no one in any doubt that this a capitalist state as opposed to a state in capitalist society (which reformists like to characterise it as). The capitalist state is not a neutral body which can become anti-capitalist under popular pressure.

Today’s British state exists primarily to uphold capitalist private property and ownership and to defend an economic system driven by profit accrued through the exploitation of human labour. When Gordon Brown says he will do “what it takes” to prop up the banking system, he means just that. That’s what presiding over the capitalist state is all about.

So, where does this leave us in political terms? Popular anger is growing against the bail-outs. On the BBC news forum dedicated to Bush’s sudden U-turn on the banks, Trevor Tinker writes: “The governments of the world reigned in human rights after 9-11. A few well organized religious fanatics killed several thousand people and affected the lives of several thousand more. The financial terrorists (read financial engineers) who's actions have affected millions if not billions around the world vaporizing savings and pushing people to despair if not suicide with their insatiable greed remain unpunished. When will we see a global witch hunt against the financial terrorists?” There are many more comments along similar lines.

While the Financial Times story “Undertakers deliver last rites for US capitalism” is good for a laugh, it is unfortunately not quite the case. The body is still breathing – and inflicting great damage in terms of unemployment, repossessions, inflation as well as state bankruptcy.

To halt this process and create a sane economic and financial system will require real power – state power. Establishing people’s power in place of corporate power leads directly to the creation of a truly democratic, transitional state in place of the existing capitalist state. Then, instead of bailing out bankers, society would be in a position to put people before profit. On Saturday, at our Stand Up for Your Rights festival, our new book, Unmasking the State – a rough guide to real democracy, will be on sale for the first time. It is a handy thing to have in these times!

Paul Feldman
AWTW Communications editor