Wednesday, April 30, 2008

How to make the right to vote count

May Day is international workers’ day, when the labour movement celebrates its social and economic achievements. Winning the right to vote is undoubtedly one of the landmark successes in the history of workers’ struggles against the employing classes and the state. So it is more than a little ironic that May Day in England and Wales coincides with local elections which the majority of the electorate will simply boycott.

There are a number of reasons why voters are increasingly disillusioned with the political process and decline to use their vote, which is a right they rightly cherish alongside the right to vote. In the case of local government elections, the councils involved have little independent power. Where once councils could raise funds locally and decide their own priorities – a principle established in Elizabethan times – today they are tightly constrained by spending and policy decisions made in Whitehall. In effect, they are the agencies of central government. This constitutional change was carried through by the Tories in the 1980s and has been reinforced by New Labour since 1997.

Furthermore, there is little to distinguish the mainstream political parties one from the other. So when it comes to real choice at the ballot box, there is not much on offer. This is reflected in low turnout at elections and a general disdain for politicians and parties, who have generally lost substantial numbers of members and in the case of New Labour hardly exist as a campaigning force. Many voters, understandably, feel disenfranchised by the way the system has evolved into a kind of mush of managerial “politics”, with the parties converging and competing for the privilege of managing the state in favour of corporate and financial interests.

Where new institutions have come into existence like the Mayor in London, they were created in an autocratic style around personalities who exercise enormous power with little oversight or accountability. During the campaign for Mayor, incumbent Ken Livingstone – trying hard not to be seen as the New Labour candidate that he is - and main challenger Boris Johnson, a populist right-wing Tory, spent time stealing each other’s policies and promising everything to everyone, including police officers in every school. It was not a contest to warm the political heart or drive you to the ballot box.

The democratic side of the British parliamentary state has to all intents been “hollowed out”, to borrow an expression used by Al Gore to describe what has happened in America. It is a state that, in any case, is incapable of tackling the major issues like climate change, inequality or even housing supply. As a consequence, the hard-won right to vote has lost what modest power it once had in terms of influencing what happens in public life. The words of the 17th century Leveller Richard Overton, who was on the left-wing of the English Revolution, are worth recalling in this regard. He was a great pamphleteer and in 1646, during the first of two Civil Wars between parliament and the Charles I, issued a warning to those who had failed to represent the people’s interests:

“We are well assured yet cannot forget, that the cause of our choosing you to be Parliament-men was to deliver us from all kind of bondage and to preserve the commonwealth in peace and happiness. For effecting whereof we possessed you with that same power that was in ourselves to have done the same; for we might justly have done it ourselves without you if we had thought it convenient …” (“A Remonstrance of Many Thousand Citizens”).

More than 350 years later, to echo and paraphrase Overton, it is time to justly do it ourselves and sweep away the farce that passes itself off as democracy in favour of genuine people’s power in an entirely new and liberating constitutional settlement. That would give a new, concrete meaning to the right to vote.

Paul Feldman
AWTW communications editor

Profiting from the food crisis

The world’s major governments are sitting on their hands while the world’s poor face starvation from soaring food prices. This is the stark conclusion to be drawn from the fact that the United Nation’s World Food Programme (WFP) has so far received only £9 million towards closing a £380m funding gap, despite all the fine words from London, Washington and other capitals.

What is also increasingly clear is that the focus is on imposing top-down, market-driven “solutions”, which will deliver no benefits to the poor but will boost investment in research into agri-chemicals, GM crops, and second generation bio-fuels. The British government, for example, is giving just £30m extra to the WFP but has pledged £400m in extra investment in “agricultural research” over next five years. Much of it will be spent in the UK.

UN secretary-general Ban Ki-moon is doing his best to keep the issue upfront but he faces a slow reaction by governments more concerned about the impact of the global financial crisis on shares and property values then they are about starvation. The WFP believes 100 million people are currently going short of food. The prices of staple foods including rice, grain, oil and sugar are all at least 50% higher than a year ago. Fertiliser prices have soared too, leading to a decline in production by poorer farmers.

As for the leading agencies of global capitalism, they see the food crisis as an opportunity to boost corporate-driven globalisation. Dominique Strauss-Kahn, managing director of the International Monetary Fund, says curbs on food exports, “have a damaging global impact”. He called for the completion of the Doha round of trade talks as it “would reduce trade barriers and distortions and encourage agricultural trade”. The World Bank is developing a “Strategic Framework for Climate Change and Development” which will “provide direction on how adaptation - in agriculture as well as other impacted areas, such as flood-prone coasts - can be integrated into country, sectoral, and regional development strategies”. In other words, a series of expensive, prescriptive and ill-planned strategies will be imposed on poorer nations in return for World Bank funds.

In an excellent report on the food crisis, the biodiversity group GRAIN says:
“Farmers across the world produced a record 2.3 billion tons of grain in 2007, up 4% on the previous year. Since 1961 the world’s cereal output has tripled, while the population has doubled. Stocks are at their lowest level in 30 years, it’s true, but the bottom line is that there is enough food produced in the world to feed the population. The problem is that it doesn’t get to all of those who need it. Less than half of the world’s grain production is directly eaten by people.

“Most goes into animal feed and, increasingly, biofuels – massive inflexible industrial chains. In fact, once you look behind the cold curtain of statistics, you realise that something is fundamentally wrong with our food system. We have allowed food to be transformed from something that nourishes people and provides them with secure livelihoods into a commodity for speculation and bargaining. The perverse logic of this system has come to a head. Today it is staring us in the face that this system puts the profits of investors before the food needs of people.”

The way out of this impasse is through putting land into the hands of the people who work it and giving them independence and self-determination. It also means placing the global chemical and agri-business and food distribution corporations under democratic control and common ownership. Scientists and technologists could then get to work on sustainable, holistic approaches to agriculture and food production on the basis of need and not profit.

Penny Cole
Environment editor

Tuesday, April 29, 2008

Nadine Gordimer and Gaza's dismay

This year Israel is marking the 60th anniversary of its declaration of independence in May 1948, which for the Palestinians immediately became a continuing disaster. Yesterday, for example, Israeli shells killed four children and their mother at their home in Ezbet Beit Hanoun in the northern Gaza Strip. Now former anti-apartheid activist and Nobel-prize winning author Nadine Gordimer is accused of lending her support to the oppression of Palestinians by joining in “Israel at 60” events. Gaza lecturer Dr Haider Eid, has written Gordimer an open letter.

I am a Palestinian lecturer in cultural studies living in Gaza. I happen to also have South African citizenship as a result of my marriage to a citizen of that beloved country. I spent more than five years in Johannesburg, the city in which I earned my PhD and lectured at both traditionally black and white universities. At Vista in Soweto, I taught your anti-apartheid novels My Son's Story, July's People and The Late Bourgeois World. I have been teaching the same novels, in addition to The Pick Up and Selected Stories, to my Palestinian students in Gaza at Al-Aqsa University. This course is called "Resistance, Anti-Racism and Xenophobia." I deliberately chose to teach your novels because, as an anti-apartheid writer, you defied racial stereotypes by calling for resistance against all forms of oppression, be they racial or religious. Your support of sanctions against apartheid South Africa has, to say the least, impressed my Gazan students.

The news of your conscious decision to take part in the "Israel at 60" celebrations has reached us, students and citizens of Gaza, as both a painful surprise, and a glaring example of a hypocritical intellectual double standard. My students, psychologically and emotionally traumatized and already showing early signs of malnutrition as a result of the genocidal policy of the country whose birth you will be celebrating, demand an explanation.

They wonder in amazement, as do I, that you might have missed Archbishop Desmond Tutu's contention that conditions in Israeli-occupied Palestine are worse than those under apartheid? They ask how you can ignore UN human rights observer John Dugard's dispassionate and insightful report on the dismal state of human rights in the occupied territories? Surely, you have not been unaware of South African minister Ronnie Kasrils' writings following his latest visit to Gaza and the West Bank? Like you, these three men, all South Africans, were also active in the fight against racism and apartheid. Dugard's words on Palestine are very significant: "I certainly have a sense of deja vu ... The sad thing is that Israel is unwilling to learn from the South African precedent." In an article titled "
Apartheid: Israelis adopt what South Africa dropped", Dugard observed that the human rights situation in the occupied territories continues to deteriorate and called the conditions "intolerable, appalling, and tragic for ordinary Palestinians." Significantly, Dugard made shocking parallels between the situation in Palestine and your country South Africa under apartheid: "Many aspects of Israel's occupation surpass those of the apartheid regime. Israel's large-scale destruction of Palestinian homes, levelling of agricultural lands, military incursions and targeted assassinations of Palestinians far exceed any similar practices in apartheid South Africa."

Moreover, in its final declaration, the World Conference against Racism non-governmental organization forum, held in Durban in 2001, stated that: "We declare Israel as a racist, apartheid state in which Israel's brand of apartheid as a crime against humanity has been characterized by separation and segregation, dispossession, restricted land access, denationalization, 'bantustanization' and inhumane acts."

You are no doubt aware of Israel's deep ties with apartheid South Africa, during which Israel, breaking the international embargo, supplied South Africa with hundreds of millions of dollars of weapons. Apartheid South Africa relied on apartheid Israel to persuade Western governments to lift the embargo. How did you relate to Israel during that period and what was your position regarding countries and individuals that did not support the policy of isolating apartheid South Africa? You were surely critical of the infamous policy of "constructive engagement" led by then British Prime Minister Margaret Thatcher and US President Ronald Reagan at the height of the struggle in the 1980s. And today, inexplicably, you have joined the ranks of sanctions busters.

The eminent Palestinian scholar Edward Said, who gave you his friendship, would have been dismayed by your decision. He named you as a model for what he called "oppositional intellectuals." It was his strong belief that, with regard to Israel, "[it] only takes a few bold spirits to speak out and start challenging a status quo that gets worse and more dissembling each day." Little did he know that you would fail the oppressed in Palestine.

My cold and hungry students have divided themselves into two groups, with one group adamant that you, like many of your courageous characters, will reconsider your participation in an Israeli festival that aims to celebrate the annihilation of Palestine and Palestinians. The other group believes that you have already crossed over to the side of the oppressor, negating every word you have ever written. We all wait for your next action.

Sunday, April 27, 2008

Coastal peoples hit by climate change

There is serious doubt whether the majority of people who rely on fishing and other coastal activities for their livelihood can survive the impact of climate change. Millions of coastal refugees could be forced to move inland, at a time when the interiors of continents are becoming hotter and drier.

A conference of fisher folk in the Kanyakumari District of Kerala, South India, has heard that the 56km coast they rely on for their livelihood is disappearing. Eighty per cent of their fresh water has been salinated by sea water incursions. Over the next 50 years, sea levels will rise by up to another five meters as climate change kicks in.

The conference in Tamilnadu agreed that the fisher folk are paying the price for the economic activities and lifestyles of others, and passed a resolution condemning polluting industries, chemical farming practices, non-renewable energy production, and the carbon emitting life style. They said that the polluters should pay the price for ecologically affected fisher people and other marginalised communities.

Thousands of miles north, in Scotland, a new report explains that 12 per cent of the coastline is currently vulnerable to erosion but that figure is set to rise. There has already been an increase in salinity in coastal waters and a rise in dissolved CO2 is threatening marine organisms. The seas round Scotland (not including the oil and gas industries) provide around 50,000 jobs.

At the other end of the globe, Australia’s 14 million square kilometer coast is the longest on earth and approximately 80% of people live within 50km of the coastline. It supports crucial economic activity, including fishing, tourism and agriculture. But Australia’s unique coastal wetlands, estuaries, mangrove swamps, coral reefs and marine life are under threat from erosion, inundation with sea water, and increased risk of flooding and storm damage.

A report from the UN Environment Programme (UNEP) says at least three quarters of the world’s fishing grounds will be seriously affected by changes in the ocean's natural pumping systems caused by climate change. These natural pumps, dotted at sites across the world including the Arctic and the Mediterranean, bring nutrients to fisheries and keep them healthy by flushing out wastes and pollution.

Higher sea surface temperatures will bleach and kill up to 80 per cent of the globe's coral reefs, which are not only tourist attractions but also natural sea defences and fish nurseries. CO2 emissions are making the sea more acid, threatening calcium and shell-forming marine life and the crucial planktons that form the base of the marine food chain pyramid – with humans at its apex.

Meanwhile the latest figures show record melting in the world’s glaciers and sea ice, the main cause of rising sea levels. UNEP found that between 2004 and 2006 the average rate of melting and thinning of glaciers more than doubled. And the massive Wilkins Shelf, the largest ice shelf in Antarctica which scientists had predicted would last until the 2020s, is now linked to the continent by just a narrow strip of thin ice.

Professor David Vaughan of the British Antarctic Survey (BAS) said: "It's bigger than any ice shelf we've seen retreating before, and in the long term it could be a taste of other things to come. It is another indication of the impact that climate change is having on the region." The only location where there is no impact is situated in the minds of the political and business elites, who continue to sit on their hands while global warming takes its toll. They are truly an obstacle to creating a sustainable future for humanity.

Penny Cole
Environment editor

Friday, April 25, 2008

Debt crisis behind Grangemouth strike

Members of the Unite trade union at Grangemouth are set for the first strike at an oil refinery for 73 years over pension rights. The dispute brings the potential impact of declining production of oil into sharp focus. The threat of a major impact on availability of fuel in Scotland and the North of England has driven already record prices higher and triggered panic buying as supplies from the North Sea oil and gas field are cut off.

What lies behind the dispute? The Grangemouth refinery became part of the Ineos Group, when it bought Innovene from BP for $9 billion in 2005. This was part of the debt-funded buying spree that in ten years created what is now the world’s third largest chemicals producer from a standing start in 1997/8.

Jim Ratcliffe, Ineos chairman and CEO, and listed by the Sunday Times as the UK’s 10th richest man in 2007, borrowed $12 billion for the Innovene deal from Barclays Capital, Merrill Lynch and Morgan Stanley. The extra cash of about $3 billion was used by Ratcliffe, known as “the alchemist”, to refinance Ineos’ existing debt. And it helped to treble Ratcliffe’s estimated personal fortune to £3.3 billion.

As Oligopoly Watch put it at the time “One warning sign: companies are now paying increasingly higher prices for assets. Part of that can be attributed to the competition with cash-rich equity firms. The world has a record amount of cash looking for a profitable home.” Three years later and things have changed. The tumbling cards of the house of fantasy finance are claiming victims.

Ineos is in trouble. Its sales and profits have been falling. In the third quarter 2007, its before-tax profits went negative – it started to make a loss. The impact of the falling value of the dollar only served to make things worse. In third quarter 2006 it made a profit of 96.9m euros on sales of 7395.7m euros. A year later, debt financing costs helped turn a gross profit of 485.9m euros on sales of 6934.1m euro into a before-tax loss of 0.9 m euros. But a tax rebate turned the loss into a profit of 1.2 m euros.

At the end of last year Ineos employed more than 15,000 people in 17 countries in 68 plants producing 50m tons of chemicals a year. Clearly Ratcliffe intends that they, not he, are going to pay to restore profitability. As his Grangemouth chief Tom Crotty put it: “The vote for strike action is hugely disappointing. We need to spend £750m modernising Grangemouth and a strike will make it virtually impossible for us to achieve this. We believe the proposed strike action could cost at least 650 direct jobs and indirectly many more. The union needs to understand that we live in the real world. If we are not competitive and we can’t get the investment, we will lose the jobs.”

Closure of the final salary pension scheme to new entrants and reduction of the value of pensions for existing workers at Grangemouth that sparked the dispute will prove to be part of a global assault by Ineos on wages, pensions and working conditions. As the global financial and economic crisis deepens, firms in every corner of the globe will passing the burden on to their workforce if they can.

Grangemouth workers should seek support from unions across the globe in their struggle to defend conditions. They should build a campaign to transfer petrochemical production into social ownership under the control of the workforce. This will not only create the conditions for defending pensions, jobs and other rights but a necessary step in dealing with the depletion of resources and global warming that both arise from the chase for profit.

Gerry Gold
Economics editor

Thursday, April 24, 2008

Form alliance to defeat government

Today’s strike by teachers, college lecturers and civil servants is an important challenge to the low pay and privatisation agenda that this government is inflicting on workers in the public services. It is the first national strike by teachers in the National Union of Teachers (NUT) for 21 years. For many lecturers in the University and College Union (UCU) and for civil servants in the Public and Commercial Services Union (PCS) it is the first time that they too have taken industrial action.

While the leaders of the unions will tend to see the strike as a protest and a chance to let off steam, for the 400,000 workers involved, it is a long-overdue opportunity to express their anger at the way they have been treated over a number of years, culminating this year with another below-inflation pay award. And beyond the pay issue, today’s strikers are all enmeshed in “an orgy of privatisation” plans, as Mark Serwotka, the leader of the PCS, has described it.

New Labour’s ringing slogan of 1997,” Education, Education, Education” turned out in practice to be the opposite of what most voters thought it meant. The Tory Education Reform Act of 1988, with the introduction of the prescriptive National Curriculum, the management of schools by themselves, the setting up of new types of school, such as the City Technology colleges, the ending of local control over these new schools and the polytechnics and FE colleges, and a regime of testing youngsters every other year, was left entirely in place by new Labour in 1997. The much-hated schools inspector Chris Woodhead, continued to oversee and terrorise schools up and down the country.

New Labour then built on this framework, encouraging competition between different schools and colleges and inviting the private sector to bid for control of so-called “failing schools” and even failing authorities (such as Islington). It created “academies” and school trusts outside the control of the local authority (but under the control of a local business, or a church or even an “intelligent design” outfit). The government outsourced school meals and school supplies and got private firms to build (and own) new schools and colleges through PFI deals. Many schools themselves are increasingly run along the lines of a business enterprise with the head teacher as the CEO.

This was called “modernisation” and was falsely touted as a means to increase parental choice. Apart from opening the door wide for businesses to cash in, it led to confusion and dismay amongst teachers, who now had to teach children to pass tests, the results of which became the all-important measure for attracting new parents.

Centralised, top-down management of education in the state sector, in schools and colleges, has largely cut across the old ideals of a learning environment, which was to encourage a genuine spirit of enquiry and discovery in youngsters. Class sizes have risen while wealth and job inequalities have manifested themselves in the form of disruptive behaviour. No wonder three out of four NUT members voted to support strike action,

The truth is that New Labour (and the Tories for that matter), dancing to the tune of the World Trade Organisation, will continue to pursue policies for the privatisation of all the public services, including the NHS and the civil service. That is the dynamic of the new market state, towards a world where eventually transnational corporations will provide everything for everyone from birth to death (in two or three distinct levels, of course, according to wealth and class).

With New Labour in a weakened and confused state in the midst of a growing global economic crisis, now is the time to force the issue, to build an alliance of all public sector unions teachers, parents and other supporters to defend services and to defeat this government of corporate globalisation and privatisation. Such an alliance can only strengthen the movement if and when it comes to confronting Cameron’s Tories. The reported meeting of the NUT and the PCS to plan for further action after today is an important first step.

Peter Arkell

Wednesday, April 23, 2008

New Labour's tame copper

Sir Ian Blair, commissioner of the Metropolitan Police, is New Labour’s favourite copper. Ministers can always rely on him to back the government when others are reluctant to do so. In fact, when it comes to plans to extend pre-trial detention to 42 days, Blair is about the only supporter of substance that they can wheel out.

Blair’s arguments in favour of what amounts to internment are absolutely in line with home secretary Jacqui Smith’s view that it is better to have new powers just in case you might need them one day. Yesterday, Blair told MPs examining the legislation that suspects might "suddenly emerge from left field" and have to be arrested at a very early stage, leaving officers with “huge amounts of investigative work”. Then he claimed: “We have reached a point where at 28 days we feel sooner or later - and maybe sooner - something is going to happen to make that insufficient."

On that basis, the state might as well assume greater and greater general powers over ordinary citizens in all areas on the grounds that, well, the state might just need them one day. Of course, that is exactly what New Labour has been doing over the last decade. Ministers have consistently disregarded basic human rights laws and the rule of law to introduce draconian powers, starting well before the 9/11 attacks and the so-called “war on terror”. As a result, we now live under a fully-fledged surveillance state, where the citizen is secretly monitored in a variety of ways.

Blair’s approach to 42 days is the same “pre-emptive” mentality that lies behind actions ranging from the 2003 invasion of Iraq by the Met chief’s namesake to the execution by his officers of Jean Charles de Menezes in 2005. Iraq could have had “weapons of mass destruction” – so let’s invade and wreck the country to make sure. Pity we couldn’t find any, says the government, but it is better to be safe than sorry. The same goes for the Brazilian electrician. He could have been a terrorist. The fact that he wasn’t makes him an unfortunate victim of the “war on terror”. Thanks to New Labour’s control of the Metropolitan Police Authority, no one – least of all Sir Ian Blair – is held accountable for their actions on that day. He is truly the government's man at Scotland Yard.

There are serious voices within the state opposed to extending the detention period from 28 days to 42 days (it was only 48 hours in 1997). These include Sir Ken Macdonald, the director of public prosecutions. The DPP told MPs yesterday: "For our part as prosecutors, we don't perceive any need for the period of 28 days to be increased. Our experience has been that we have managed comfortably within 28 days. We have therefore not asked for an increase in 28 days. It is possible to set up all sort of hypotheses ... Anything is possible - the question is whether it's remotely likely." And Britain’s most senior Asian policeman, assistant Metropolitan Police commissioner Tarique Ghaffur says increasing the limit will be “counter-productive”.

Whether such opposition will inspire enough New Labour MPs to vote against the proposal and defeat the government remains to be seen. Whether Blair remains in his post is also a matter for debate. That entirely depends on the outcome of the May 1 elections for mayor of London. Tory challenger Boris Johnson and Liberal Democrat (and former policeman) Brian Paddick wants him removed. Mayor Ken Livingstone running on the New Labour ticket, wants Blair to stay on. Who would have thought it?

Paul Feldman
AWTW communications editor

Tuesday, April 22, 2008

America's judicial murder machine

As the campaign between Barack Obama and Hillary Clinton for the Democratic Party presidential ticket comes to a head, it would be well to note that they both support the death penalty just when the gruesome American prison system is gearing up for a slaughter of the mentally ill, people of colour and Hispanics from a poor or working class background, not to mention the downright innocent.

Yesterday the US Supreme Court rejected appeals by 11 death row inmates in seven states. This followed on its macabre ruling last week upholding the lethal injection method of execution. The 7-2 ruling ended a seven-month moratorium on state-sanctioned murder, while the Supreme Court considered a lethal injection protocol in the state of Kentucky. The outcome of Baze v Rees, a grotesque debate about the suffering of prisoners during execution, now means that around 3,000 prisoners on death row in US jails may have a very short time to live.

Marlene Martin, director of the US organisation, Campaign to End the Death Penalty , said in response to the ruling: "I think of people like Troy Davis, Rodney Reed and Timothy McKinney - all on death row, all African American, all poor and almost all surely innocent. What does this decision mean for them and the countless others like them?"

The ruling has serious implications for the Afro-American journalist Mumia Abu-Jamal, whose jailing in 1982 for the alleged killing of a Philadelphia police officer, Daniel Faulkner, was the result of a state-inspired frame-up. Abu-Jamal first attracted the attentions of the authorities at the age of 15, when he helped form the Philadelphia branch of the Black Panther Party , and become its Lieutenant of Information. His epic 26-year struggle to prove his innocence against the combined forces of the FBI and the racism of the US judicial system, has made him a potent international symbol for anti-state strugglers around the world. The list of signatories demanding his release has won the support of a wide range of organisations and individuals like Hollywood actor, Danny Glover.

A World to Win supports completely the campaign to release Mumia and other US political prisoners, like Native American Indian activist, Leonard Peltier who has now served 31 years, in the wake of the attack by armed FBI agents on the Pine Ridge Reservation in South Dakota. We joined others in speaking at the London rally outside the US Embassy over the weekend, where demonstrators demanded an end to the US death penalty and the release of Mumia Abu-Jamal.

Speakers included Jessica Hartley from the Bogle L’Ouverture Press, Stephen Hedley of the Engineering Branch of the London Regional Council of National Union of Rail, Maritime and Transport Workers, Dean O’Hanlon of the Finsbury Park Branch RMT, and representatives from the Marcus Garvey Organising Committee, the Pan-Afrikan Community Forum and the International Bolshevik Tendency.

A World to Win pointed to the jailing of Abu Izzadeen and others by the British courts last week for the contents of a speech made in public outside a mosque. He is locked up while war criminals like Blair, Bush and Rumsfeld remain free and while the slaughter in Iraq and Afghanistan continues. The struggles against injustice and judicial murder in both America and Britain show yet again that the existing state is brutal, oppressive and undemocratic and can never serve the interests of the majority.

Corinna Lotz
A World to Win secretary

Monday, April 21, 2008

Another 'fix' for debt junkies

The true nature of New Labour doesn’t come clearer than this. If you are a low earner, New Labour says you should pay more tax. But if you are a banker, government hand-outs are the order of the day. So prime minister Brown is “standing firm” over the abolition of the 10% tax band, which reduces the incomes of five million people, while his chancellor is today helping out the major banks to the tune of £50 billion.

New Labour, which came to power a decade ago as champions of global markets and corporate-driven globalisation, is now struggling day and night to keep the faltering fantasy finance show from closing its doors to the public. With the market system holed below the water line, Brown’s government is launching one bail-out operation after another in an increasingly desperate bid to save it from floundering altogether.

The latest move is for the banks to trade in bundles of mortgages that until recently they bought and sold speculatively in financial markets. They used this trade to support mortgage and other loans to the general public. Since the credit crunch got underway, these kind of deals have taken on the air of musical chairs, where the last banker standing ends up holding bundles of increasingly worthless “assets”. The game is no longer played and, as a result, mortgage deals and loans to businesses are hard to come by. Interest rate cuts have not been passed on and instead are being used to bolster profits.

This outrageous behaviour by financial capitalists, whose reckless profiteering threatens to bring misery to millions in every country, ought to be condemned. The way they have gambled with other people’s money provides ample ammunition for them to be taken over without compensation to their major shareholders. Here is the case for reorganising the financial system on a mutual, not-for-profit basis. This is the furthest thought from the minds of the executive management of Britain PLC – aka the Brown government.

It is left to Vince Cable, the Liberal Democrat Treasury spokesman, to say: "We cannot have a situation where the banks are able to privatise their profits and nationalise their losses. Since the mortgages from the banks are of inferior quality and higher risk than the government bonds they replace, the implication must be that taxpayers are shouldering the risks and losses of the banks. This cannot be right."

But it is right as far as the government is concerned. You give us the relatively useless mortgage bundles and we’ll give you loads of cast-iron government bonds, which you can trade on international money markets. What’s more the “independent” Bank of England – which has resisted bail-outs for feckless bankers – has been ordered to arrange this swap shop at the expense of the taxpayers.

Whether all this will work is highly questionable. The credit crunch is a global phenomenon and the financial markets are wholly inter-connected. Germany’s banks, for example, are now in major difficulties, while Britain’s second largest bank RBS is having to raise £10 billion to bolster its balance sheet and may have to sell off parts of the group.

The value of assets like housing are continuing to fall in Britain and the United States, as well as in countries like Spain. Economic activity is already slowing to the point of recession in the US. Similar pump-priming action by the Federal Reserve in the United States has made little discernible difference. US interest rates are now just 2.25%, below the rate of inflation. Yet the more Fed does, the more the markets seem to need. They have simply become debt junkies, needing one fix after another.

Paul Feldman
AWTW communications editor

Friday, April 18, 2008

The real costs of the price of oil

The price of a barrel of oil reached and passed $115 yesterday. It has doubled in a year. As the price of oil goes up so must everything else, as everything that is produced, distributed and consumed depends on it in some way. The higher the price of oil goes, the deeper will be the global economic slump.

There are many reasons for the soaring price of oil. Despite attempts to stave off financial meltdown, banks are failing and the US economy is diving into recession. The value of the dollar is falling against other currencies, so speculators are looking for safer options, like gold, food and oil. The more they exchange dollars for commodities, the faster the dollar falls. The pound sterling is falling for similar reasons. The lower the dollar, the higher the price of oil. It’s a vicious spiral.

In a period of inflation, many price rises aren’t due to an increase in their value – which is measured by the real cost of production – but by the falling value of the money in which the price is expressed. But for oil the situation is different. The oil companies are finding it more and more difficult to extract. The cost of production is increasing. So the value is increasing as well. And that contributes to the sharply increasing price.

As the oil price feeds through into other products, the effect is to dampen consumer demand even further. Think about it. US consumers already began to run out of credit in 2005. That triggered the mortgage crisis and a lot more. Thousands of stores are now closing, taking their suppliers and hundreds of thousands of jobs with them. The closure by JJB of 72 sports shops with the loss of 800 jobs is a sign that the crisis is now hitting the UK. Meanwhile, investment bank, JP Morgan is predicting that the credit crunch could cost up to 40,000 jobs in London’s financial services sector during 2008 and 2009, further cutting purchasing power.

All this is against the background of “peak oil”, as production peaks and begins to fall. Earlier this week Leonid Fedun, vice-president of Lukoil, said that last year’s Russian oil production of about 10m barrels a day was the highest he would see “in his lifetime”. Russia is the world’s second biggest oil producer. Fedun compared Russia with the North Sea and Mexico, where oil production is declining dramatically. Because the entire capitalist economy depends on oil, and there is no substitute, in an editorial entitled “Preparing for the age of peak oil”, the Financial Times is pushing to offset the decline in output urging Russia to “press on with privatisation of state-controlled assets”.

Movements like the Transition Initiative are on a different track. It is a fine, rapidly-growing movement focusing on unleashing the creative genius of communities to discover ways to reduce energy use to overcome falling oil production and climate change. So far, however, it has sidestepped the corporate ownership of oil and the capitalist, for-profit pressure to maximise its extraction and use. Reducing the reliance on fossil fuels depends on them ceasing to be exploited for profit. And that means bringing the era of capitalist corporations to an end through a process of democratising their ownership and control.

Gerry Gold
Economics editor

Thursday, April 17, 2008

Climate change hits water cycle

Global warming has already brought about significant changes to what is known as the hydrological cycle, warns an authoritative new report on climate change and water. The International Panel on Climate Change’s (IPCC) stark assessment comes as the major economic powers refuse to take action to cut carbon emissions and, in Britain’s case, are actually allowing them to rise.

In the hydrological cycle, water evaporates from the seas, falls as fresh water rain, and is stored in different forms – as ice (not so much), in underground aquifers, human-made reservoirs, or flows back to the sea. The IPCC says that changes to this cycle include new rainfall patterns – at both extremes, with increases in northern latitudes and decreases in the south - reduced snow cover and melting ice; and changes in soil moisture and runoff.

Climate scientists agree that this pattern will continue. Low-lying areas in northern Europe will become more subject to flooding, and semi-arid areas, such as the Mediterranean basin, western USA, southern Africa and north-eastern Brazil will lose water resources. The new report warns: “By the 2050s, the area of land subject to water stress due to climate change is projected to be more than double that with decreasing water stress.” In many regions, any increase in supply will be “counterbalanced by the negative effects of increased precipitation variability and seasonal runoff shifts on water supply, water quality and flood risks”. The IPCC that these changes are certain to affect food availability in many areas.

Former Tory chancellor Nigel Lawson, speaking on Radio 4 this week about his new book which rubbishes climate science (I won’t bother you with the title – it’s completely bonkers and you’d get more useful knowledge from his previous book about how to lose weight!) said that the science is one thing but the real challenge is what we do about it. Human beings, he argued, are infinitely adaptable and resourceful, and will find ways to cope with climate change – and even turn it to their advantage, he suggested.

This argument is the basis of thinking of all governments – even those who accept the science of climate change – and the reason why technical fixes, military planning and profitable market solutions such as carbon trading and bio-fuel, form their response to the climate crisis, rather than action to halt the growth in emissions. But what Lawson and his co-thinkers like George W Bush and Tony Blair (impossible to say what goes on in the strange brain of Gordon Brown) do not articulate is that human resourcefulness takes many different forms.

At times humans co-operate in structured and rational ways – the IPCC itself is an example of this. Sometimes they are organised into ruthless armies, to oppress others. Sometimes they work together to help each other and sometimes they let the weakest go to the wall whilst the rich and powerful survive. In the macro scale, what form actually prevails depends entirely on social and economic circumstances, and the nature of the states that determine the laws within which people act.

This is why, within our existing capitalist framework, millions of householders are losing their homes in the US, whilst fund managers rake in big bonuses. Why British soldiers invaded Iraq though the majority opposed it. Why many of the 70,000 small UK businesses flooded last year now find they can’t afford insurance. Why millions are spent maintaining the Thames barrier, whilst for the Norfolk and Dorset coastline and other less valuable real estate – the watchwords are “adaptive management” and “planned withdrawal”. Why people across the globe are protesting against food price rises, while Lawson tells the rich how to get thinner. And why the developed economies are passing the buck on carbon emissions, making a new international agreement much less likely.

The IPCC report confirms that an entirely new set of social, economic and political conditions are needed to push through both an emergency response and a longer-term plan to tackle climate change.

Penny Cole
Environment editor

Wednesday, April 16, 2008

Italy at the crossroads

The election of billionaire Silvio Berlusconi as prime minister of Italy for the third time brings together an extreme right-wing coalition at a time of severe economic problems for the country, even before the global credit crunch hits home. These conditions are certain to create a nationalist-racist, authoritarian regime and, at the same time, deepen the crisis of a decrepit and corrupt Italian parliamentary state.

Berlusconi’s government is made up of his own sinisterly named People of Freedom Party, which last year absorbed Gianfranco Fini’s extreme right National Alliance. Fini himself was once a leader in the fascist MSI movement but now proclaims himself a “post-fascist”. Joining them in government is the separatist, anti-immigrant Northern League, led by Umberto Bossi, which was the big winner in electoral terms. Bossi wants the richer north to abandon the poorer south and for the Italian navy to shell people trying to enter the country by boat. Bossi’s party won 8.7% of the 47% cast for Berlusconi’s coalition. His movement runs neighbourhood patrols aimed at intimidating immigrant communities.

Italy's morale has been battered by the struggle to find a buyer for loss-making airline Alitalia, a rubbish crisis in Naples, a health scare over mozzarella cheese and gloomy economic news. The International Monetary Fund forecasts barely any growth this year for Italy, which has the third highest public debt in the world in absolute terms. The Mafia is said by Confesercenti, an association of small businesses, to control 7% of Italy's annual output, while the Spanish economy last year overtook Italy’s. A former British ambassador to Italy says: “It is no wonder that, during a recent visit to the US, I heard doubt being expressed in more than one quarter as to whether Italy still deserves its place at the G7, the capitalist top table.”

Berlusconi himself is, of course, Italy’s richest man by far and owns most of commercial TV, a massive publishing empire and will dictate to state television when he takes office. In 2001, the Economist magazine conducted a long investigation into his finances and declared him “unfit to govern Italy”. Berlusconi has evaded court action only by using his 2001-2006 government to change the statute of limitations and abolish the charge of false accounting with which he was faced. During this campaign, Berlusconi proposed that all prosecutors and judges should be given sanity tests in a verification of his total disdain for the rule of law.

For the first time since 1946 there are no socialist or former communist representatives in parliament. The only opposition to Berlusconi comes from Walter Veltroni’s Democratic Party, which won 38% of the vote and whose policies are hard to distinguish from those of the actual victors. One would-be voter on Sunday channelled his frustration by tearing up and eating his ballot before being led away from a polling station in the southern town of Sorrento by police. "What future are we preparing for our children? Who should I have voted for? Something has to change," said 41-year-old Ciro D'Esposito.

For some time, the Italian left has focused its efforts solely on trying to win control of parliament in the illusory hope that they could bring about change in this way. Following the dissolution of the once powerful Italian Communist Party in 1991, the Democratic Party of the Left (PDS) embarked on a project for the building of a "new left". Their failure once in government to make any headway, most recently within Romano Prodi’s administration, has seemingly ended this particular Italian road to nowhere.

Italy’s 1948 constitution is now under impossible strain. The absence of any left opponents in parliament will add to the endemic resentment towards the Italian state, which will abandon what’s left of its democratic credentials as it seeks to impose Berlusconi’s corporate agenda. The social and political struggle in Italy must now assume an increasingly extra-parliamentary dimension, in which the remaking of the constitution to break the power of the country’s economic and political elites is on the agenda.

Paul Feldman
AWTW communications editor

Tuesday, April 15, 2008

The German student revolt

Forty years ago today, students demonstrated in Berlin following the attempted assassination of their revolutionary leader, Rudi Dutschke. After narrowly surviving the attack, he and his family later took refuge in Britain, only to be expelled by the Heath government as “undesirable aliens” in 1971.

He died eight years later, aged 39, from the after effects of his injuries, but not before linking up with anti-Stalinist campaigners in Eastern Europe and anti-nuclear protesters in Germany. Dutschke had been born in former East Germany and fled to the West just one day before the infamous Berlin Wall was erected in August 1961. He became the most notable leader of the West German student movement, the Sozialistischer Deutscher Studentenbund (SDS) which organised mass demonstrations against the US war in Vietnam.

Josef Bachman, the man who shot him, had been provoked by the Bild tabloid newspaper which had urged readers to “eliminate the trouble makers”. The powerful Springer press, which owned Bild, was seen by many students as the main enemy, influenced as they were by Frankfurt School philosophers such as Marcuse, Horkheimer and Adorno and their theories of cultural criticism.

In an interview conducted a few months before he was shot, it is clear why Dutschke was seen as an enemy of the West German state. Dutschke believed that the 1968 movement was the heir of the 1918 revolution that had swept Germany 50 years earlier, when the Bolshevik seizure of power in Russia the year before inspired the creation of workers’ and soldiers’ councils. Dutschke also published articles making clear his support for the October Revolution in Russia and its leaders, including Trotsky, Bukharin and Radek. He condemned the governing parties for not bringing about unification with East Germany. In particular, he denounced the parliamentary system in West Germany for having disenfranchised the population.

He believed the SDS movement should not only be extra-parliamentary but against parliament, because there was in fact no dialogue between politicians and the electorate. His aim at this time was the creation of organisations which would be “different from the existing parties who manipulate people’s interests”. Politicians should be subject to recall. He believed that humans beings were not simply “blind objects of fate” but that they could make history, but that they had to make it consciously”. Dutschke saw Germany as part of an international system, in which “one part of the world exploited the other part”.

In 1967, Dutschke had begun to shift towards an urban guerrilla outlook, in which the SDS would become a “sabotage and civil disobedience group” to protect people against state terror. Others, though not Dutschke, founded the Red Army Faction, which went on to carry out political assassinations in West Germany. Inevitably, neither the “long road through the institutions” of the SDS nor the individual terror of the Red Army Faction could dislodge the German capitalist state.

Dutschke went down a different political path, joining others to help found the German Green Party which many years later would become part of the political establishment he opposed. Whatever Dutschke’s political weaknesses, he was a courageous opponent of the system and deserves to be remembered, not only in Germany but also in the UK. His political trajectory was an expression of the crisis in post-war Germany, as a new generation sought to come to terms with the history their parents had made. And, of course, he was completely right about the need to go outside and beyond the existing parliamentary bourgeois state.

Corinna Lotz
AWTW secretary

Monday, April 14, 2008

Meltdown hits New Labour

The turmoil in global financial markets is now reflecting itself as paralysis and confusion in the minds and actions of politicians, amid opposition from bankers to their plans for more regulation. Most significantly, the crisis is also finding a strong echo in the opinions of voters, especially in Britain where confidence in the Brown government has plunged to a record low.

Over the weekend, the Group of Seven industrialised nations and the International Monetary Fund governing council made up of global finance ministers and central bank governors, endorsed nothing less than 65-point plan to reform global financial markets. The plan involves raising the amount of capital banks have to hold if they want to invest in complex credit securities, new disclosure requirements and the creation of a “college of supervisors” from different countries to monitor banks.

This plan was dead in the water almost as soon as it was announced. Wall Street bankers rejected the G7 call to raise more capital, saying they were opposed to selling shares at the current depressed prices while others advocated self regulation. In any case, there was no particular timetable for implementing the changes, which would be left up to national governments to carry through.

As to the present crisis, there was nothing in the way of either a plan or a strategy. Ministers actually rejected the IMF’s call for globally co-ordinated public intervention to tackle the problems in the financial system directly. With the dollar and the pound continuing their free fall on currency markets, the G7 also ruled out any intervention in this area despite their fears that the slide could spiral out of control and intensify the economic recession.

Grandiose plans combined with lack of actual activity are a graphic illustration of the impotence of the G7, IMF and other global institutions in the face of the credit crunch. Last week, for example, the Bank of England cut interest rates only to see lenders not only fail to pass this on to homeowners but in some cases increase rates to borrowers. Now Alistair Darling, the chancellor, has called a meeting to urge them to respond to interest rate cuts while the bankers say the credit crunch prevents them from doing so. The problems of banks was shown today when Bradford & Bingley led a fall in shares after reports that it was going to have raise new capital to fill a large hole in its balance sheet.

There was more bad news for the government today when a poll revealed that Gordon Brown is less trusted to steer his country through the global financial crisis than any other major western European leader. A Financial Times/Harris poll suggests Britons no longer trust his government on the economy – 68% said they were “not confident at all” in its ability to deal with the economic crisis. The figure was 52% in Germany, 51% in the US, 50% in France, 43% in Italy and 36% in Spain. This came the day after a Sunday Times poll which gave the Tories a 16 point lead over New Labour.

Even previously pro-government newspapers like the Financial Times are beginning to have doubts. Its editorial said: “If British voters are worried about the global credit squeeze – more than a third expect their finances to worsen – then they are right to be. They have no more reason to trust politicians’ assurances that the UK can weather a US recession than believe their next-door neighbour’s.”

The paper added: “Like the US, the UK has relied on a debt-fuelled boom in consumer spending to drive growth. As the credit squeeze begins to bite and households cut back borrowing, overall demand is likely to weaken. A long-predicted correction now under way in the UK’s inflated property market will be painful too.” New Labour is unravelling almost as fast as the financial system itself and the need to create alternative political movements to challenge corporate and financial power is more urgent than ever.

Paul Feldman
AWTW communications editor

Friday, April 11, 2008

Food prices revolt grows

Governments across the globe are being shaken by mass protests, as people take to the streets demanding lower food prices. According to the World Bank, increases in global wheat prices reached 181% over the 36 months leading up to February 2008, and overall global food prices increased by 83%. The UN says the price of rice has soared by 75% in just two months.

There have been strikes and protests across Africa, in Ivory Coast, Burkina Faso, Cameroon, Senegal, Mauritania, Guinea and Mozambique. In Asia, there have been protests in India, Singapore, Philippines, and Bangladesh. In Mexico thousands have marched and people in El Salvador protested outside the state bank. This week alone:

· Protestors in Haiti marched on the presidential palace demanding a cut in food prices; five people were killed, leading to demands for the government to resign.
· in Vietnam, 15,000 workers in a factory making trainers went on strike demanding better to pay to cover higher food prices.
· In Egypt, strikers took to the streets demanding a cut in the cost of bread.

In Europe too, droughts in Spain, France and the Po Valley last year have led to big rises in fresh food prices. With durum wheat up 30% this year, pasta is becoming a luxury product. In Britain, the cost of an average basket of groceries has risen 12% in a year.

World Bank president Robert Zoellick has warned of growing unrest if a solution is not found. And Prime Minister Brown called for food price inflation to top the agenda at the G8 summit in Japan in July. Both Zoellick and Brown called for more aid. But G8 countries are not even meeting their existing promise, made at Gleneagles in 2005, to double aid to Africa by 2010. Aid was lower in 2007 than in 2006, and in fact rich countries gave a higher proportion of their GDP in aid in 1963 than in 2007.

As for “trade not aid”, the International Monetary Fund says more than 20 African countries will see their trade balance worsen by more than 1% of GDP through having to pay more for food. The World Bank among others blames biofuels production for driving up food prices. Brown says he will review the impact of the UK’s biofuels subsidies and opposes further increases in EU subsidies. This is too little, too late. The world is now locked into profit-driven, bio-fuel production at the expense of food production. The market itself is in the driving seat.

The immediate causes of food price inflation are selling food crops at high prices for bio-fuels; switching land from food production to bio-fuels; last year’s drought in food producing areas such as Australia and Central Europe and the increasing cost of oil, leading to higher production and transportation costs.

But the underlying cause is the profit-driven system of food production at the expense of local needs. With the expansion of agri-business in the last three decades of globalisation, food dependency has increased and local systems of food production and exchange have been overturned. Now agri-business is moving into more profitable areas, creating food shortages where there could be plenty for all.

With starvation on a global scale now looming, what is needed is a strategy to wrest control of all land and natural resources from the global corporations (and the governments that support their rule). We could then combine technology with new scientific understanding of agricultural production to create systems of sustainable, dependable local food production.

In two very concise and readable books – Running a Temperature, an action plan for the eco crisis and House of Cards: from fantasy finance to global crash, the members of A World to Win propose a programme of democratisation of both ownership and of the state as the only solution to the growing global crisis. Included in both books are radical proposals for food, agriculture and land use. We call on everyone to join us in developing these ideas further with a view to putting them into practice.

Penny Cole
Environment editor

Thursday, April 10, 2008

IMF predicts the unpredictable

Headline reports of the stark admissions, predictions and warnings in the two latest reports from the International Monetary Fund (IMF) literally overshadow the impact of the developing financial and economic crisis on the world’s population. A third report, also released this week, for the weekend spring meetings of the central bankers and finance ministers has been almost universally ignored.

The World Bank’s global monitoring report report deals with the results and prospects of action on the Millennium Development Goals (MDGs) such as child and maternal mortality, poverty, malnutrition, education, climate change, sustainable development. It’s not really surprising that nobody is paying them much attention now, since progress on the MDGs has always been made contingent on extracting crumbs from an ever-expanding capitalist economy.

Now the blunt statements from the IMF’s Global Financial Stability report and World Economic Outlook (WEO) tell us that “the financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression”.

Headlines refer to the $945 billion predicted losses to the banks and other financial institutions arising from the US sub-prime mortgage crisis. But you should put this together with a muted, unquantified reference in the WEO to “rising questions about the soundness of the credit-default-swap market’”, which has played a big role in the so-called spreading of risk. Some put the size of that market, now effectively worthless, at $45 trillion, dwarfing the sub-prime losses. Doesn’t bear thinking about.

And, as “both of the financial system’s twin engines [the banking system and the securities markets] are faltering at the same time” the present credit squeeze could “mutate into a full-blown credit crunch”, warns the IMF. Especially as the huge injections of additional liquidity by the Federal Reserve and other central banks intended to ease the problem appear to be having the opposite effect – credit is becoming less available and more expensive.

With the US already in a recession, the IMF has revised its previous predictions for growth sharply downwards offering a 25% chance of a global recession. But is this a prediction dependent on the success of proposed co-ordinated action by a broad group of countries, or is it what might happen if such multilateral initiatives fail? It is just not clear. At least to me.

What the newspapers don’t report is that the IMF points to “a collective failure” to appreciate the extent of growth of credit and “the associated risks of a disorderly unwinding”. In other words, all those who were supposedly in a position to steer the global economy failed to see the dangers of a 60-year boom made possible only by a ballooning of credit in a variety of forms.

So why aren’t they all resigning? And why should we believe any of the predictions they are now making? Like this one: “All the advanced economies are expected to face serious consequences if deepening losses to bank capital and a further loss of confidence in structured financing were to transform the current credit squeeze into a full-blown credit crunch.” The IMF also admits that no previous episodes of distress in the finance sector “provide much guidance for the current unprecedented situation”.

As the mathematically-based econometric models they use for prediction aren’t up to the job, they’ve invented a new one based on “a combination of negative shocks” just to see what might happen. They consider three related shocks:

• A temporary shock to consumption and investment from a further tightening of credit conditions while the financial system goes through a protracted rehabilitation period during which capital and credibility are repaired after extended financial turmoil.
• A permanent downward shift in expectations for long-term productivity growth in the United States.
• A shift in investor preferences away from US assets.

Once again, the global consequences of this combination of shocks - a deeper and longer recession - don’t bear thinking about. Except that the IMF recommends that countries should start contingency planning. The worst is yet to come.

The uncertainly around the unravelling of credit and its impact brings to mind the famous 2002 statement by the then US secretary of defence, Donald Rumsfeld:

As we know,
There are known knowns.
There are things we know we know.
We also know
There are known unknowns.
That is to say
We know there are some things
We do not know.
But there are also unknown unknowns,
The ones we don't know
We don't know.

Gerry Gold
Economics editor

Wednesday, April 09, 2008

Housing market misery

The morbid concern over the sharp fall in house prices in March not only expresses middle-class obsession with property values. It is also graphically illustrates how the market economy in housing results in gross distortions. In human misery terms, it means growing numbers of repossessions, more homelessness, overcrowding, extortionate rents and children denied the space to grow up or do their homework.

In places like London, most new households can’t afford a place to live for love or money while the number of homeless households living in temporary accommodation in England has almost doubled since 1997 to reach almost 90,000. More than 70% of these households are families with children – meaning the problem affects almost 125,000 children, says the campaign group Shelter. House prices have risen by 156% since Labour came to power in 1997; during the same period incomes have gone up by 35%. The average house price is now nearly 11 times average earnings. Not surprisingly, mortgage repossessions rose 65% last year to 17,000 homes. This is plainly the result of the laws of the jungle – sorry, laws of supply and demand in a capitalist market economy.

There has always some kind of a housing crisis in Britain, despite the fact that it is one of the richest countries in the world. Yet it has been exacerbated by the actions of successive governments, who have imposed naked market forces where once the state played a moderating role. For a long post-war period, local authorities built millions of homes for rent, enabling most new households to find somewhere to live. Rents in the private sector were controlled. The quality of housing was not always great, but the system provided access to an affordable roof over your head.

The rot set in with the Thatcher governments from 1979-1997, which pursued open monetarist policies and set out to break the power of local councils. They were compelled to sell their best housing stock and denied the chance to use the proceeds to replace the two million homes that were disposed of. Councils now build no homes whatsoever. The great “property-owning democracy” illusion began. With other routes closed off, people were driven into so-called home-ownership, whereby the bank/building society remains the actual owner. Prices crashed in the early 1990s and hundreds of thousands of people lost their homes as interest rates soared.

The Tories encouraged housing associations to build new homes for rent. The market-driven financing of these homes proved so expensive that the rents themselves became unaffordable for anyone who wasn’t receiving state benefits. So they were turned into ghettos of the unemployed and then made targets for experiments in dealing with “anti-social behaviour”. New Labour has gone further by using large parts of its housing budget to subsidise home ownership schemes instead of building for rent. These “shared ownership” homes have also become largely unaffordable, selling for as much as £300,000 in London and taking up huge proportions of average earners’ incomes.

More than 130 years ago, Frederick Engels wrote about the “so-called housing shortage, which plays such a great role in the press nowadays” and asked rhetorically: “How is the housing question to be solved then? In present-day society just as any other social question is solved: by the gradual economic adjustment of supply and demand, a solution which ever reproduces the question itself anew and therefore is no solution.”

Today’s housing crisis is testimony to the power of Engels’ analysis. The market’s “solutions” to the crisis are unacceptable. We need to devise a new plan for housing which should embrace public ownership of land, social ownership of housing finance, a halt to repossessions, conversion of mortgages into affordable rent, the requisition of empty properties (especially offices in the City of London now lying vacant) and a sustainable building programme agreed by local communities.

Paul Feldman
AWTW communications editor

Tuesday, April 08, 2008

Help - I could lose my seat!

If some New Labour MPs are suddenly concerned about how Gordon Brown’s tax changes benefit the well off at the expense of low earners, it is not because for the most part they have suddenly developed a political conscience. Their real worry - panic is probably a better expression - is about whether they can retain their seats, along with their comfortable, expenses-paid, two-house, lifestyle, at the next general election.

After all, the Institute for Fiscal Studies (IFS) showed in March 2007, over a year ago, at the time of Brown’s last budget as chancellor, what the impact of the abolition of the 10p income tax rate would be. Overall, 20% of taxpayers – five million people - would lose, 40% would be unaffected and another 40% would gain, said the IFS. The main losers would be single adults on £18,000 a year or less, with no children and not on tax credits. Families with two earners whose tax credit rise was not sufficient to compensate for income tax losses would also be worse off as would taxpaying women aged 60-64. Those earning £18,500 and £39,000 were set to gain.

So where have the brave New Labour MPs been all this time? Why did they only speak up a few days before the tax changes actually came into effect on Monday? Those who sit on the Treasury select committee heard evidence about the impact of the tax change some time ago. This week, the committee finally published a report saying that low wage earners were an "unreasonable target for raising additional tax revenues". The government doesn’t give a hoot about their bleating, however, and business secretary John Hutton quickly said that the changes would not be abandoned.

While the government can stump up billions to help failed banks like Northern Rock, it is not particularly concerned about poorer families. They have to make do with complicated, means-tested “tax credits”, which have proved an absolute failure in terms of their impact. In fact, the government is reclaiming money paid out in error, which people have already spent.

Poorer households are also hit hardest by the increases in food, travel and utility bills now running through the economy. Pensioner groups said a rise in winter fuel payments would do little to offset raised utility bills and council tax. The Civil Service Pensioners' Alliance, and National Federation of Royal Mail & BT Pensioners, said over the weekend that people aged 60-65 would be badly affected, including more than 600,000 female pensioners.

New Labour MPs have a right to be concerned – about their future that is. Three weeks before the local elections in May, a Sunday Telegraph/ICM opinion poll showed Labour on 32% and the Lib Dems on 18%, each trailing behind the Tories' 43%. This is enough to give the Tories an overall majority in a general election. In London, Tory right-winger Boris Johnson is ahead of Ken Livingstone in the race for Mayor.

Meanwhile, the housing crisis is gathering pace. Prices are falling at their sharpest since 1992 and Abbey today became the last bank to abandon 100% mortgages. Millions face steep rises in repayments as cheaper starter mortgages come up for re-financing while others who used rising house prices to borrow and spend against the value of their home are no longer able to do so. These are just some of the signs of market failure on a global scale, failures that look certain to destroy the fortunes of the capitalist New Labour government as well.

Paul Feldman
AWTW communications editor

Monday, April 07, 2008

Put this Olympic torch out!

Former Blue Peter presenter Konnie Huq no doubt summed up many people’s feelings after a protester tried to grab the Olympic flame from her yesterday. She valued the Olympic ideals but also condemned the “despicable” nature of the Chinese government’s role in Tibet. The Chinese Olympic organisers may well have lost control of the script for the flame, but they are still in charge of China and will get on with murdering Buddhist monks in Tibet and killing and jailing dissidents at home.

Yesterday’s torch run through London offered a ludicrous spectacle. Constantly surrounded by Chinese minders and British police, it was difficult to even see the flame. The whole exercise cost council taxpayers up to £500,000 plus an additional £2 million for the police “ring of steel”. Free speech also paid a price as police forced demonstrators to take down wholly inoffensive but political placards and made protesters take off their pro-Tibet T-shirts. You got a taste of what the 2012 Games in London will look like.

To suppose that politics and the Olympics don’t go together would be to ignore the history of the modern Games. The idea of a torch relay itself was initiated by the Nazis. The 1936 Berlin games, for example, were a showpiece for Hitler’s regime, even while being undermined by black US runner Jesse Owen’s amazing performance. In the Cold War, the United States, the Soviet Union and former East Germany, also used the Games for political ends. Forty years ago, at the Mexico City 1968 Olympics, American athletes Tommie Smith and John Carlos gave the Black Power salute on the podium in protest against US racism. Only days earlier, the Mexican authorities had massacred hundreds of students staging a protest.

In today’s world, corporate sponsorship for companies like Coca Cola – who are sponsoring the torch - and big business interests dovetail with the propaganda of authoritarian regimes to make the Games into their plaything. The cost of the London Games has spiralled up from an original £2.4 billion in 2006 to a current budget of £9 billion plus a £2 billion contingency fund. For what? So that land values in Stratford where the Olympics are being held can rocket, or that surveillance on spectators can reach Orwellian heights? Severfield-Rowen, the construction company for the London Olympics, has reported record profits and a doubling of its order book. MoneyWeek writes that “security companies should see good business from the Olympics as well…. These are likely to be the most watched-over games in history”. No wonder that three quarters of the British population and 60% of Londoners don’t think the Olympics will benefit them!

New Labour’s hypocrisy when it comes to human rights in China is breathtaking. For them, business comes first. In any case, the Brown government is hardly a paragon of democracy. The UK’s record on human rights, rendition and its role in Iraq, Afghanistan and the war on terror is, perhaps a bit more subtle than the Chinese kleptocracy, but just as authoritarian.

The Beijing Olympics should indeed be boycotted. In fact, the modern Olympics should be abandoned altogether! Why not simply call off the London Olympics? Even half the money could provide affordable housing in a city where only the rich can pay for somewhere decent to live as well as good, free sporting facilities. The ideals of friendly, international sporting competitions could then be pursued in an entirely new context.

Corinna Lotz
AWTW secretary

Friday, April 04, 2008

Martin Luther King's unfinished business

Martin Luther King, who was assassinated 40 years ago today in Memphis, where he was supporting a strike of low-paid municipal workers, is more often than not characterised as leader of the civil rights movement in the United States and man driven solely by religion. But King was much, much more than that and by the end of his life was advocating change of a revolutionary character, challenging the power of American capitalism.

In August 1963, under Kennedy’s presidency, King led a multi-racial rally of 250,000 in Washington demanding economic justice. It was the largest gathering in the capital’s history, and where King held the crowd spellbound with his inspiring, momentous “I have a dream” speech about how “this nation will rise up and live out the true meaning of its creed: 'We hold these truths to be self-evident, that all men are created equal’”.

King rebuked the country’s leaders for breaking the promises contained in the Constitution and the Declaration of Independence, to guarantee the unalienable rights of life, liberty and the pursuit of happiness. “Instead of honouring this sacred obligation, America has given the Negro people a bad cheque, a cheque which has come back marked 'insufficient funds,'" he said. Moreover, in a distinct rebuff to America’s black separatist movement, King urged unity, declaring: “Many of our white brothers as evidenced by their presence here today have come to realise that their destiny is tied up with our destiny and they have come to realise that their freedom is inextricably bound to our freedom. We can not walk alone."

From 1965, King started to attack America’s war in Vietnam. Exactly a year before his death, he delivered “Beyond Vietnam: A Time to Break Silence”. He insisted that the US was in Vietnam "to occupy it as an American colony" and denounced the government as "the greatest purveyor of violence in the world today”. King also said that people around the world would look with indignation and see “capitalists of the West investing huge sums of money in Asia, Africa and South America, only to take the profits out with no concern for the social betterment of the countries”.

In private he sometimes spoke of his support for democratic socialism. In a speech in front of his staff in November 1966, King told them: “You can't talk about solving the economic problem of the Negro without talking about billions of dollars. You can't talk about ending the slums without first saying profit must be taken out of slums. You're really tampering and getting on dangerous ground because you are messing with folk then. You are messing with captains of industry… Now this means that we are treading in difficult water, because it really means that we are saying that something is wrong… with capitalism… There must be a better distribution of wealth and maybe America must move toward a democratic socialism.”

In 1968, King and the Southern Christian Leadership Conference organised the "Poor People's Campaign" to address issues of economic justice. He criss-crossed the country to assemble "a multiracial army of the poor" that would descend on Washington — engaging in non-violent civil disobedience at the Capitol, if need be — until Congress enacted a poor people's bill of rights. Reader's Digest warned of an "insurrection". King cited systematic flaws of racism, poverty, militarism and materialism, and that "reconstruction of society itself is the real issue to be faced".

His family have never supported the official version of the assassination, which has James Earl Ray as the lone gunman. Ray was an escaped convict who later retracted his confession. He had neither the motive, money or mobility to have killed King by himself. Jesse Jackson, who was with King on April 4, 1968, says: “Our government was very involved in setting the stage for and I think the escape route for James Earl Ray.”

A report published today by the Service Employees International Union explores the economic implications of King’s movement and message. "Beyond the Mountaintop: King’s Prescription for Poverty", concludes that 40 years after King spoke of a promised land of social and economic justice, “we seem to be paralysed outside the gates of the city”.

Paul Feldman
AWTW communications editor

Thursday, April 03, 2008

Carbon emissions deadline looms

Carbon emissions have to peak before 2015 to have any impact on climate change, according to the International Panel on Climate Change (IPCC) meeting in Bangkok this week, where it discussed mitigation measures. It would take a reduction in average annual growth rates of less than 0.12%, to achieve this target, the IPCC report claims.

This relatively modest cost compares to the 2006 Stern Report for the British government, which stated that with “business as usual”, climate change would reduce welfare by the equivalent of a reduction in consumption of between 5% and 20% per head.

But the IPCC warns that “delayed emissions’ reductions lead to investments that lock in more emissions-intensive infrastructure and development pathways”. So the question is, can the global capitalist system change course in the next seven years? The signs are not promising.

About 50% of the total mitigation required could be achieved by reducing emissions from deforestation. But in September 2007, the Philippines’ government signed an agreement with China to develop 400,000 to 500,000 hectares of “idle, alienable and disposable lands and forest lands”. In other words they plan to grub up crucial areas of biodiversity and carbon sinks for agribusiness.

And a recent UN study found that virtually all the forests in Ethiopia have gone. A hundred years ago 40% of the country was tree-covered; today less than 3%. This is an environmental disaster in a country which was once one of nature’s most crucial areas of bio-diversity.

The report sets out a range of energy options to increase end-use efficiency as the best way of reducing demand. But the supply side is still the focus of global governments. The UK government is seriously considering an expansion of coal-fired power stations and China is opening new coal-fired power stations at the rate of two a week.

And this brings us to a paragraph which is in the main body of the IPCC report, but left out of the summary for policymakers, which makes clear what governments actually need to do.

“For low and medium stabilisation levels, developed countries as a group would need to reduce their emissions below 1990 levels in 2020 (on the order of -10% to -40% below 1990 levels for most of the considered regimes) and to still lower levels by 2050 (40% to 95% below 1990 levels), even if developing countries make substantial reductions.

“Under most of the considered regime designs for low and medium stabilization levels, developing country emissions need to deviate from what we believe today would be their baseline emissions as soon as possible, even if developed countries make substantial reductions.”

In other words, the argument that China and India must be permitted to go on polluting until they reach the same level of capitalist economic development as the developed countries simply does not hold water. Of course, some argue that this a kind of “justice”. But that assumes that there is some benefit is to be gained for the mass of people in developing countries from unfettered globalised profit-driven development, when the truth is quite the opposite. Rising food prices, drought, floods and pollution affect the poorest people first.

It is increasingly clear that the best way to mitigate the impact of global capitalism is to remove its power to continue on its current path. What the developing world actually needs is an opportunity to leapfrog this stage of development and move straight to a cleaner, more sustainable and humane economic model. And there is some justice in the argument that it is a duty of us, in the developed countries, to lead a struggle to achieve that.

Penny Cole
Environment editor

Wednesday, April 02, 2008

Out of control

Some people you meet have a touching faith in global capitalism, although they would never put it like that. They believe that the authorities are more or less always in control of affairs and they will always be able to “manage the crisis” to avoid disaster. The assumptions behind this are that a) capitalism is a rational system that follows a predictable logic b) they have all the answers up their sleeves. Of course, if you add a) and b) together, there is no chance of challenging, let alone defeating, the economic system.

This viewpoint is found not just in universities but among militant trade unionists too. They prefer not to talk about the current economic crisis because they believe it is a passing phase, which the authorities are getting a grip on. So in the end, both the academic and the trade unionist can carry on with their present activities. One can continue to write impenetrable texts which neverthless advance careers, while the other can still focus on industrial issues or speak demogogically at meetings, ignoring the economic crisis altogether but still sounding miitant.

In reality, the financial authorities only wish they had as much control and power as they are ascribed! They know better than their opponents that capitalism is far from a rational, organised system. Production is carried out by private corporations operating purely to maximise profit. Commodities are turned out without firms knowing for certain whether goods will actually be sold because this is subject to the whims of the market. Reliance on credit, especially in the sphere of consumption, adds to this uncertainty and leads to overproduction in a world of scarcity. Subjective factors like confidence and trust are essential aspects of capitalist economic activity which no one “manages”.

Taken together, these diverse aspects of the capitalist system come together to constitute an objective process, a level of reality that has always been beyond conscious control and is more so in the present period of globalised economy where borders and national government policies are disgregarded by powerful economic and financial forces. None of ths is hot news. In 1848, Marx and Engels in the Communist Manifesto compared modern bourgeois society to “the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells”. They wrote of crises of productive forces that become too powerful for private ownership to handle and as a result “bring disorder into the whole of bourgeois society” leading to “enforced destruction of a mass of productive forces”. Sounds familiar?

But let’s not take Marx and Engels as the sole authority. Fast forwarding to April 2008, those in the know say something quite similar. Take George Magnus, senior economics advisor to investment bank UBS. He has warned that “there is a quite serious risk that the de-leveraging downturn could run amok: credit contraction causes economic contraction, which causes further write-downs and capital destruction, which leads to more credit contraction and so on”.

Magnus has also said that what the central banks are doing is just “firefighting” and that if the banks don't want to lend, no amount of extra liquidity is ultimately going to help. He should know about the crisis. UBS this week announced a $19 billion writedown in assets, to go with $18 billion losses revealed earlier this year. UBS is now top of the global mortgage writedown chart.

Yesterday, First Direct becamethe first UK major mortgage lender to close its doors to new customers. The bank - one of the country's top 20 home loan providers - gave only five hours' notice. The move came as figures showed that more than 90 mortgage products a day have been scrapped over the past week as lenders put the shutters down. Oh yes, they are really “managing the crisis”!

Paul Feldman
AWTW communications editor

Tuesday, April 01, 2008

Speculation feeds rice price crisis

Across Asia, sudden stratospheric increases in rice prices have prompted countries to ban exports amid fears that shortages could provoke food riots following street protests in Jakarta, capital of Indonesia. World prices for rice, the staple food of about 2.5 billion Asian people, have almost doubled since the beginning of the year, joining those of wheat, corn and other agricultural commodities which have surged since the end of 2006.

Governments of producing countries are restricting exports to ensure their own populations get enough to eat at a price they can afford, but the result is to raise prices further. Last week, Cambodia banned all exports for two months to ensure "food security", following the lead of Egypt, a major exporter. Vietnam, which ships 5m tonnes abroad each year, on Friday declared a 20% cut in exports. Global demand outstripped supply by nearly 2m tonnes last year. The predicted shortfall this year is more than 3m tonnes of the 424m tonnes required.

The World Food Programme has raised the alarm on potential mass starvation. "There are hundreds of millions living at, or just below, the poverty line of $1-a-day, spending 70% of their day-labour wages on food. If food costs double they've no opportunity to increase their earnings and no alternative but to reduce what they and their families eat."

Global food prices, based on United Nations records, rose 35% in the year to the end of January, markedly accelerating an upturn that began, gently at first, in 2002. Since then, prices have risen 65%. Analysts attribute rising food prices to many causes: spiralling oil prices, the key input to all production; extra demand for biofuels to offset rising oil prices which reduces available food stocks; a rapidly growing population; the shift to an increasing consumption of meat as incomes rise for some in rapidly developing Asian countries - meat production needs a vastly greater amount of land; neglect of irrigation and research; and changing weather patterns throughout the world which have adversely affected production.

With global rice stocks at their lowest level since 1976, prices are expected to continue to rise until the end of next year, at least. Some analysts predict rice could hit $1,000 (£500) a tonne before farmers plant more crops and increase supplies – a response which will take years to come into effect.

Severe weather across Asia has certainly damaged production. Record icy temperatures were recorded in China and Vietnam, which also suffered a pest outbreak. Bangladesh endured a devastating cyclone while Australia suffered a prolonged and devastating drought. "It's been described as a 'perfect storm' of factors that have pushed prices to their highest levels since the 1970s," said Adam Barclay, of the International Rice Research Institute.

But even this ‘perfect storm’ explanation omits a surely more obvious source of the sudden inflation in food – speculation and profiteering. As credit markets remain closed, property values and stock markets are declining, and recession deepening, investors are seeking new homes for their capital – and fast. Andrew Lynch, a portfolio manager at global asset management company Schroders inadvertently lifted the lid:

"The food retailers, the Tescos and Carrefours of the world ... can manage to disguise quite effectively to the average person on the street food inflation by special offers here and discounts there, and get a lot of prominence while quietly pushing up the price of a loaf of bread by 10% in three months. That's why I own much more [shares] in food retail."

Gerry Gold
Economics editor