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

Political pop idol comes to Britain

Such is the decline in traditional political allegiance in Britain that one appealing TV appearance can thrust an average performer to apparent super stardom as the general election comes to resemble a TV talent show rather than a political campaign.

The political version of Britain’s Got Talent or Pop Idol has propelled Liberal Democrat leader Nick Clegg from an also-ran to the one to beat, according to the pollsters. Clegg’s rise to fame certainly makes a hung parliament more likely than not.

There is no other way to explain the violent swing in the opinion polls since Clegg’s triumph over Gordon Brown and David Cameron during their TV debate last week. Faced with the prospect of either a New Labour or Tory government, voters have understandably taken fright.

Whatever Clegg is, he is not Brown or Cameron! Never mind what he stands for – he is young, appealing and pours scorn on the two parties that for almost 70 years have taken turns in running the country in a Tweedledee-Tweedledum act.

Disgust with New Labour runs deep for a variety of reasons. Watching Lords Mandelson and Adonis outside Downing Street, explaining why the volcano eruption in Iceland is bad news, is enough to put you off on its own. Both are courting the Lib Dems because essentially that is their natural home.

Mandelson came within a whisker of defecting to the Social Democratic Party in the 1980s, while Adonis was a member of the outfit that broke away from Labour and subsequently joined with the Liberals (Britain’s oldest capitalist party, going back to the mid-19th century) to form the Lib Dems.

New Labour – with the support of the Tories – enabled Britain to become an offshore haven for global financiers and left the economy to stagger and eventually collapse under unparalled debt burdens. Add in the invasions of Iraq and Afghanistan, the undermining of human rights and creating markets for public services, you can see why many people find it hard to stomach voting New Labour.

As for inequality, City bankers have experienced near-unprecedented income growth over the past decade, with the highest-paid workers taking home nearly a third of the UK’s total wage bill, new research from the London School of Economics shows. The report reveals that the top 10 per cent of workers seeing their share of wages rise from 27 per cent to 30 per cent between 1998 and 2008. Big bonuses paid to bankers and traders accounted for most of those gains, with financial services professionals taking home an extra £12bn per year by the end of the decade.

The extreme electoral volatility shown in the polls does not herald, however, a new political dawn so much as the break-up of the old arrangements under the impact of globalisation and its offspring, the world economic and financial crisis.

The fact that Clegg himself represents constituents in Sheffield – once an engineering and steel-making town – speaks volumes for the decline of New Labour in what were once its heartlands. The city council is also Lib Dem controlled, as is Newcastle, York and other northern towns and cities.

If the Lib Dems do end up joining a coalition to keep New Labour in power it would mark the full turn of the circle and the completion of the Blairite project to unite both parties. Labour was formed in 1900 to end Liberal influence over the trade unions and win reforms from capitalism. A coalition would be a step along the road to a merger that would signal the formal and historic end of that venture.

Paul Feldman
Communications editor