Friday, November 28, 2008

Brown's boot boys in action

When anti-terror police are used to arrest the shadow immigration minister for the grave "crime" of leaking information to the media, the Tories' use of the term "Stalinesque" to describe events is absolutely justified.

If the police needed to question Damian Green, they could have asked him to drop by with his lawyer. Instead, he was detained for nine hours while his homes, office and business premises were searched before being released without charge. Was it a coincidence that Parliament was not sitting at the time?

There may not have been a direct order from the government to the Metropolitan Police to act against the MP, but such an operation would have had to be authorised at the highest levels. There's nothing like a nod and a wink in these circumstances

The arrest of Green is state intimidation, pure and simple of an elected politician going about his business and is a warning to everyone of where Brown's government is heading. Only recently, the Tories were accused by ministers of being "unpatriotic" for criticising the government over the economy. Now their leading members are being arrested.

The question is: which of New Labour's increasing number of political opponents is next in line for a visit from Brown's boot boys?

Paul Feldman
AWTW communications editor

New Labour's borrowing bombshell

When the government borrows, who does it borrow off? This question from a reader arose in response to Monday’s crisis budget, when chancellor Darling announced record sums of borrowing. It’s an arrow that gets straight to the heart of the problem.

The straightforward, short-term answer is that the government offers to borrow money from anyone who wants to lend it. In exchange, it offers “government bonds” or gilts, the original form of securities which, in the old days, were considered relatively low risk, because they were guaranteed by the state. And, so the theory went, governments can’t go bankrupt, because they control the issue of money – one of the many forms of credit.

In the longer term, there’s the question of paying the loans back, with interest. Governments raise the money to repay borrowing by taxing the creation of value, and value is created when people work, by the people who do the work. But the historically unprecedented scale of the expansion of credit over the last 30 years has changed things out of all recognition.

Now Martin Wolf, chief economics commentator at the Financial Times, says “the horrific numbers” in the pre-budget report might well lead to a questioning of the creditworthiness of the UK government. “A creditworthy government”, Wolf says, can shift excess debt from the private sector on to the backs of taxpayers. An uncreditworthy government cannot. If the cost of debt becomes too high, the latter will be forced into default, either openly or via inflation. In the UK’s case, inflation would be triggered by a flight from sterling.”

In other words, if the government is unable to raise the money through taxes to repay the “horrific” level of borrowing it will be in default, be bankrupt, become a failed state. A bit like Zimbabwe. In fact, the markets are already beginning to consider this possibility. The cost of insuring against the British government defaulting on its gilts in the next five years surged this week.

Darling makes assumptions about the future trajectory of the economy that don’t impress anyone. Wolf says “…the Treasury surely remains too optimistic: despite the scale of the shock to the world economy and the financial system, it assumes an annual peak to trough decline in GDP of a mere 1 per cent; an economic recovery in the second half of next year; and then a return to trend growth at 2¾ per cent a year, despite the need to shift output into capital-intensive, export-oriented manufactures. This is not plausible.”

That’s putting it mildly. The effects of the crisis have already erupted onto the high streets with big names Woolworth’s and MFI in administration, Curry’s and PC World making big losses. In and around Llantrisant, the home of the Royal Mint in Wales, hundreds of jobs have been blown away in a few hours, in Bosch car components, Oreal and Budelpack cosmetics, Hoover, the Serious Food Company and Ferrari’s – a chain of bakery shops.

Yesterday, representatives from the building industry and car manufacturers got to the head of the queue of those trying to persuade the government to help them stave off bankruptcy. They went away empty-handed, apparently. The government’s tax income is destined to fall off sharply for years to come.

There’s a bit more to this excellent question. Earlier attempts to raise impossible levels of taxes have produced social unrest and political change. In 1381, the most extreme and widespread insurrection in English history, the Peasant’s Revolt, was triggered by the poll tax. It was the beginning of the end for a society based on exploitation through landownership. Attempts by Charles I to raise money without recourse to Parliament contributed to the English Civil War and his execution in 1649. On March 31 1990,there were riots in London against the Community Charge, commonly known as the poll tax. Watch this space.

Gerry Gold
Economics editor

Thursday, November 27, 2008

Save the reefs, not the banks

There is new and dramatic evidence that rising carbon emissions have increased the acidity of the world’s oceans ten times faster than predicted, endangering many species and corals.

Last year the International Panel on Climate Change (IPCC) reported that without urgent action to reduce CO2 emissions, most coral reefs would disappear by the end of this century. Now an eight-year long study monitoring pH (acidity) levels in an area of the north-east Pacific has found that acidity is increasing so fast that the survival of shellfish, molluscs and corals is under urgent threat.

Not all carbon dioxide emissions rise into the earth’s atmosphere. About one third of CO2 is fixed in the oceans - without this, the greenhouse effect that causes global warming would be dramatically worse. But dissolving CO2 in water creates carbonic acid, and that lowers alkalinity, making it harder for creatures to form shells.

Professor Timothy Wootton, head of the study carried out by Chicago University scientists, said the findings show that “variation on ocean pH through time was most strongly associated with increasing atmospheric carbon dioxide, which supports the prediction that increasing release of CO2 to the atmosphere leads to ocean acidification". And this is already damaging some species:

Our study reveals the strongest negative impacts of declining pH are on several species of particular importance – large calcifying mussels and goose barnacles. This finding illustrates several reasons why the effects of declining ocean pH are of general concern, as these species create critical habitats for other coastal species, are important players in coastal nutrient processing, and reflect the more general risks to shellfish harvesting.

Coral reefs are the most diverse ecosystems on the planet, inhabited by at least 25% of all marine species. Destroying them will have a dramatic effect on the marine food chain – not only threatening the loss of millions of species but also the lives and livelihoods of coastal communities.

So far, world governments have thrown $4.2 trillion at saving the wreckage of the banking system. US President-elect Barack Obama has promised to spend just $150 billion over the next 10 years to support the development of alternative energy. As Time magazine's special "energy issue" says:

The problem is, it won't be enough. As ambitious as Obama's campaign promises were — at least compared to his predecessor's — the future state of global energy will demand government policies with a much longer reach... The International Energy Agency's (IEA) annual World Energy Outlook, released Nov. 12, projects that global energy demand will increase by 45% between 2006 and 2030 — and that $26 trillion in power-supply investments will be necessary simply to meet those needs. Barring radical changes in our energy policy — beyond what Obama has pledged — greenhouse gas emissions will rise 45% by 2030, and extreme global warming would be virtually unavoidable

Meanwhile here in Britain, the climate change and energy Minister Ed Miliband made clear he plans to set aside air pollution targets in order to ease permission for a third runway at Heathrow, which is bitterly opposed by the local community. And he got the backing of Lord Adair Turner, chair of the “independent” Climate Change Committee (former director-general of the CBI, and executive at Standard Chartered Bank and Merrill Lynch and now head of the Financial Services Authority). Turner has made the astonishing claim that it would be possible to meet the target of cutting greenhouse gas emissions by 80% by the middle of this century even if aviation expands “especially if airlines were able to use biofuels or other low-carbon power sources”.

Meanwhile, back here in the real world, it is increasingly clear we need to remove the power of such people to determine decisions about our energy future. They would sacrifice millions of species – and millions of their fellow human beings – to keep the capitalist wagon rolling (even with several wheels already gone). We urgently need to seize the initiative, to develop and implement plans for a not-for-profit energy revolution, alongside urgent protection for species and habitats under threat. A World to Win says: “Save the reefs – not the banks!”

Penny Cole
Environment editor

Wednesday, November 26, 2008

'Extraordinary measures' the order of the day

The capitalist system is both broke and broken – and neither New Labour nor the Tories can fix it. Banks can’t and won’t lend, the housing market has collapsed, job losses are piling up (Woolworths finally collapsed this morning) and the state itself is being pawned in the hope that there’ll be money in the future to redeem the pledge.

And where will this money to repay the billions in government borrowing come from? From ordinary working people of course, in the shape of higher VAT purchase tax at 18.5%, increased national insurance contribution and cuts in spending in education and health. As for the so-called increase in taxes for higher earnings, experts have shown they probably won’t raise an extra penny.

At least this is the plan, which is based on an economic “recovery” in 2010 that exists only in the imagination of chancellor Darling and prime minister Brown. Yesterday the OECD (Organisation for Economic Cooperation and Development) forecast that the recession would hit the British economy hardest of all the major economies. The OECD’s latest economic outlook cites the housing market bubble and the banking crisis for their assessment.

Mervyn King, the governor of the Bank of England, warned that the recession would be “steep” unless commercial banks started lending again. But why aren’t the banks lending? After all, a bank that doesn’t lend can hardly call itself a bank. King did not answer this question when he was questioned by MPs. For the governor’s information, the banks are not lending because they consider borrowers too high a risk and, most importantly, their capital base is as firm as jelly, despite huge government bail-outs.

The reality, which is admittedly difficult to comprehend, is that there are no capitalist-style policy fixes for an economic and financial crisis that is both global in scope and extremely deep. So the choices are stark: either sit back and let the crisis takes its course (Tories); bankrupt the country (New Labour) in a desperate bid to revive the economy; or put capitalism out of its misery, which is the most difficult option but would be the most rewarding.

How could this done? How can working people be organised and mobilised to take power out of the hands of an undemocratic capitalist state that cannot control the monster it helped create and transnational corporations that drove the credit-fuelled consumer binge that is ultimately responsible for the financial crash?

First, we have to take our case to every corner of the land and say: the economic and financial system isn’t working and can’t be fixed and the consequences for ordinary people are unacceptable in every regard. Secondly, we must show that the existing political system is dominated by the interests of the very people who have wrecked the economy. On this basis, we can mobilise people around the proposal to create a new political democracy that will enable ordinary people to take direct control of economic and financial resources along the lines proposed in Unmasking the State and our Charter for Democracy.

In place of bail-outs for the banks, a real democratic government would re-establish the banking system on a co-operative, mutually-owned basis. It would outlaw fantasy finance activities such as derivatives and “securitisation” of debt and other forms of speculation that have contributed to the crash. The economy would be reorganised too, developing production motivated by social and personal needs and not shareholders’ profits. These changes would allow for a substantial increase in workers’ income, alleviating the need to build up vast debts in order to buy goods and services. These are, of course, revolutionary proposals. But, as even chancellor Darling himself has admitted, we need extraordinary measures for extraordinary times!

Paul Feldman
AWTW communications editor

Tuesday, November 25, 2008

Darling deludes no-one except himself

The measures set out in the New Labour government’s emergency budget yesterday were designed to set pulses racing and induce a collective sigh of relief across the country. Instead, the record amounts of borrowing required will not only reinforce the economic and financial crisis but also point towards the possibility of state bankruptcy in the not too distant future.

At any other moment, the unprecedented scale of government borrowing, mostly aimed at stimulating consumption, would have seemed beyond imagination. But, even with £20 billion more now and £118 billion by end of next year, the best that Chancellor Darling said he could hope for was to lessen the severity of the downturn!

To put it bluntly, the emergency budget will not stop the avalanche of company failures, job and pension losses, personal bankruptcies and house repossessions. Initial reactions from the high streets and businesses to a 2.5% cut in VAT were dismissive and rightly so.

As Jeremy Warner, business editor of The Independent put it: “The … reduction in VAT, which accounts for the bulk of the giveaway, will make no difference at all to low and moderately earning households, virtually all of whose disposable income is being eaten up by essentials unaffected by the VAT tax changes. Even on petrol, alcohol and cigarettes, the VAT concession is all clawed back again through a compensating rise in excise duty.”

The real problem that New Labour is incapable of tackling is that the global production overcapacity induced by 30 years of credit-led investment generated tsunamis of consumer goods which overwhelmed the market. Inevitably, consumers reached the limits of their ability to repay the debts they’d amassed under intense pressure to buy.

Consumers eventually had to stop buying ever more products. Under capitalism, if people don’t buy, companies can’t sell. So the global corporations that were the result of the growth hysteria needed to sustain profits are tumbling one by one. And with the promise of future profits disappearing over the horizon, the whole house of cards is crashing to the ground.

Neither Darling’s emergency measures, nor US President-elect Barack Obama’s massive stimulus package to be financed by very large deficit spending announced virtually simultaneously, can put Humpty back together again. The previous packages have failed and so must these. Remember those bank bail-outs that were supposed to get lending going again?

There is worse, far worse to come. In a research report published last week, the International Monetary Fund warned that the failure of a single major financial institution could result in losses to the derivatives market of $300-$400 billion. “What’s more, since such a failure would likely cause cascading failures of other institutions, the total global financial system losses could exceed $1,500 billion,” the IMF warned. That’s a big number by anyone’s standards.

Darling is predicting – gambling is a better word – that the record borrowing can be repaid in seven years through higher taxes derived from an economy that has returned to buoyant growth. This is delusional behaviour because a) there is a global recession in place and b) the future tax increases and public expenditure cuts needed to repay the borrowing will stop any hint of recovery dead.

The Financial Times was dismissive: “The UK consumer is now too stunned by the housing crash, stagnant wages and fears of unemployment to be coaxed into resuming the insane credit-fuelled binge of yesteryear. The government’s belief that output will contract by just 0.75-1.25 per cent next year will, therefore, prove too optimistic.”

What the paper doesn’t say is that restarting the economy after every previous crash has required the destruction of productive capacity – factories, offices, transport infrastructure, employees. It’s in the nature of the capitalist system. It’s what “boom” and “bust” means. But this time the scale and severity of the crash will be far greater than at any previous time in history. New Labour’s policies of promoting free-for-all, corporate driven globalisation and the fantasy financiers of the City have made certain of that.

Gerry Gold
Economics editor

Monday, November 24, 2008

Time to slay the dragon

As the clocks struck midnight in Washington on Sunday, the Bush government scrambled to rescue Citibank, formerly one of the world’s most powerful financial institutions, to prevent it from total collapse when the markets opened today. Another weekend, another bail-out of bankrupt banks as the era of fantasy finance unravels in remorseless fashion.

This time the bill for US taxpayers was $20 billion down and another $270 billion in guarantees in the likely event that Citibank cannot sell off its so-called toxic assets – bad debts to you and me. Not even the planned sacking of 75,000 staff could stop the downward plunge of Citibank shares. So the US Treasury’s printing presses continue to spew out crisp new dollar bills in a desperate attempt to keep the show on the road.

And that’s all it amount to. Despite all the bail-outs in the United States and Britain, the banks still refuse to lend to each other and to most corporate and small business customers. That is because the financial system remains weighed down by incalculable debts, tied up in packages that there is no longer a market for.

These so-called securities are now so insecure they are literally not worth the paper they are printed on. Even the US Treasury believes that to be the case. At the end of last week, it announced that it would not buy distressed mortgage securities through the Troubled Asset Relief Program (Tarp). Yet this plan was at the heart of the package voted through by Congress in October at the second attempt. Another month, another plan.

Governments are literally staggering from pillar to post in increasingly frantic efforts to sort out the financial system and “kick-start” the real economy at the same time. Today in Britain, hard-pressed, debt-burdened consumers will be told it’s their responsibility to save the capitalist economy by spending like there is no tomorrow.

The media is increasingly gripped by the need for governments to do something, anything, to stem the flow of job losses, home repossessions and the other consequences of the recession that have followed the financial crash. The right-wing Daily Express was almost beside itself at the weekend, declaring in its editorial: “Like it or not, the global economy depends on high indebtedness and rampant consumerism. We have created this monster and we must continue to feed it. Otherwise it will devour us.” (November 22).

So there you have it. The monster of globalised capitalism demands to be fed, assuming a mythical power over people, with shocking results if they don’t obey. It’s hard to believe we are living in the 21st century when you read drivel like this, which is more suited to fairy tales about the Dark Ages than a description of the state of affairs in 2008.

The fact is that we don’t actually have to feed the “monster”. It would make more sense to slay the dragon and set society on a more rational course where real people, not speculators and capitalists, assume rational control of social affairs. Don’t, of course, expect to see any recommendations along these lines from the Express or the rest of the media. And certainly not from New Labour, the party of choice for big business.

Paul Feldman
AWTW communications editor

Friday, November 21, 2008

Shocks to the system

It would be difficult to overestimate the significance of even one of the economic events of the last 24 hours. Fears of a severe recession sent financial markets into freefall once more while retailers launched their January sales two months early in an attempt to tempt now wary consumers into deeper debt.

The price of oil slipped below $50 to a third of the $147 reached earlier this year, a measure of the speed and depth of the slump. Only hours earlier, Robert Shapiro, an advisor to Barack Obama, gave a chilling warning of more financial shocks to come that would shake the system to its roots. Perhaps he had the impending crash of Citigroup in mind, whose planned sacking of 75,000 staff has done nothing to stop its share price from imploding.

Even before Democrats in the US House of Representatives failed to come up with a bail-out plan for the near-bankrupt car producers GM, Ford and Chrysler, another 542,000 workers filed new claims for jobless benefits last week alone, the highest number since the early 1990s recession. More than 10 million American workers are now unemployed.

The big three car makers employ 240,000 in the United States directly and indirectly support more than 4.5 million other workers, including thousands of dealerships and parts suppliers. Up to 3 million jobs could be at stake in a bankruptcy as well as retirement benefits for millions more. The impact of their collapse would be felt everywhere as these are among the giants of the global corporations with manufacturing, distributing and selling operations throughout the world. The crisis has spread to Honda too, which has just announced the closure of its Swindon plant for two months next year.

In Britain, as the Royal Bank of Scotland’s shareholders voted to accept a state hand-out, chairman, Sir Tom McKillop, said he was "profoundly sorry" for the bank's financial difficulties and "sorry" about the human cost that RBS’s troubles have caused. Its demise is a significant point in the history of British capitalism. RBS’s 300 years of operation closely follows the history of capitalist production. The bank’s forerunner, the Equivalent Society, was set up following the 1707 Acts of Union that created the United Kingdom of Great Britain. Now, the once great banking empire is reduced to receiving a £20bn hand-out from New Labour, and, as a consequence it seems, its shareholders will receive no dividends.

Gordon Brown’s dream of getting New Labour to act as a private equity fund by asset-stripping Northern Rock and returning it to private hands has turned into a nightmare as defaults on mortgages held by its previously highly profitable subsidiary Granite have soared, forcing it to stop making payments to the parent company. Repayments of mortgage debt which have fallen 90 days or more behind have risen four-fold since mid-2007. Figures out today have revealed a massive increase in repossessions by the major lenders. They were up by 12% in the third quarter, as another 11,300 were made homeless by the same banks who are guaranteed by the government.

In the midst of all this, the British state’s finances are themselves in dire straits. Borrowing is at unprecedented levels, while tax revenue is plummeting. Tax rises are on the way and the room for manoeuvre is extremely limited. Whichever way you look, the crisis can neither be contained nor solved within the existing political and economic frameworks. This raises the possibility and necessity of a reconstructed system based on not-for-profit finance, servicing sustainable production for need, carried into practice by a new democratic politics as outlined in our book, Unmasking the State.

Gerry Gold
Economics editor

Thursday, November 20, 2008

The great biomass grab

Although three-quarters of the world’s biomass has remained beyond grasp of the market economy, corporations are now poised to appropriate and further commodify biological products and processes in every part of the globe - as well as further destroy biodiversity, deplete soil and water and displace marginalised farmers.

Amidst a world food crisis, collapsing ecosystems, financial crisis and climate chaos, new technologies are once again being promoted by international institutions, governments and big business as the “magic bullet” for boosting food produc­tion and saving the planet. They are certain, of course, to have the exact opposite impact on people and planet.

A dramatic new report, Who owns nature?, published by the Canadian-based ETC Group, which has been monitoring corporate power in the industrial life sciences for the past 30 years, outlines the threat. The report indicts government for “stepping aside” and “working hand-in-hand with corporations to reinforce the very institutions and policies that are the root causes of today’s agro-industrial food crisis”.

The 48-page report exposes corporate concentration in commercial food, farming, health and the strategic push to commodify the planet's remaining natural resources. It reveals that:

  • From thousands of seed companies and public breeding institutions three decades ago, 10 companies now control more than two-thirds of global proprietary seed sales
  • From dozens of pesticide companies three decades ago, 10 now control almost 90% of agrochemical sales worldwide
  • From almost 1,000 biotech start-ups 15 years ago, 10 companies now account for three-quarters of industry revenues
  • The top 10 pharmaceutical companies control 55% of the global drugs market.

Who Owns Nature? warns that against a background of ecological, economic and financial crises, and with engineering of living organisms at the nano-scale, “industry is setting the stage for a corporate grab that extends to all of nature”. ETC Group's Pat Mooney explains: "About one-quarter of the world's biomass has already been commodified. With extreme genetic engineering, we're seeing new corporate strategies to capture and commodify the three-quarters of the world's biomass that has, until now, remained beyond the market economy."

Advocates of synthetic biology - the creation of designer organisms built from synthetic DNA – are, says the report, promising a “post-petroleum future” where fuels, chemicals, drugs and other high-value products depend on biological manufacturing platforms fuelled by plant sugars. Industrial production will be based on biological feedstocks (agricultural crops, grasses, forest residues, plant oils, algae, etc.) whose sugars are extracted, fermented and converted into high-value products. Synthetic microbes will become "living chemical factories" that require massive quantities of plant biomass. The report concludes:

When the food crisis is defined as food scarcity and hungry people, the market-based prescription is to further liberalise markets and boost agricultural production with heavy doses of new technology. The real disaster is the cor­porate controlled agro-industrial food system. This system has entrenched corporate power while undermining the ability of small-scale producers to pro­duce food for their own communities. No matter how much new technology is employed in the name of boosting food production, the agro-industrial food system is incapable of feeding hungry people. And that’s because hunger and poverty are the consequences of ineq­uitable systems – not food scarcity or inadequate technologies.

However, ETC Group’s Kathy Jo Wetter then goes on to call for “monitoring and oversight of corporations” by the same governments and institutions that the report correctly identifies as joint villains of the piece. This is simply not going to happen, especially as the economic recession will be used to give corporations a green light to do whatever it takes to boost growth and profits. There is no “vacuum in governance”, as the report claims, but an out-of-control global capitalist system and compliant governments. Wresting power out of their hands is the only way to go.

Paul Feldman
AWTW communications editor

Wednesday, November 19, 2008

High art - high prices

The National Gallery's struggle to raise the cash to buy a Titian masterpiece says a lot about the art market and access to cultural works. Yesterday, the gallery announced that it has been granted a £10m lifeline by the National Heritage Memorial Fund “of last resort” to acquire the painting, currently on special loan and on view in London. This leaves it 41 days to raise a total of £50 million to secure the Titian.

Diana and Actaeon belongs to the Duke of Sutherland. Last August he announced that he wanted to sell it but would make a “bargain offer” to the National Galleries in Scotland and London of £100m to purchase it, plus its pendant, Diana and Callisto. The first £50m would have to be raised by December 31. The amount is billed as a bargain, since the painting would fetch much more than double that at auction.

Last month the National Art Fund helped out with £1m, the largest grant it has ever made in its 105-year history. Well-known artists including Lucian Freud, Damien Hirst, Antony Gormley, Alison Watt and Gerhard Richter have lent their support. Tracey Emin presented a letter signed by 39 artists to Downing Street, saying that they believed that “in challenging times, the heritage of the past and the heritage of the present are more important than ever”.

Sir John Tusa, chair of the University of the Arts in London and the university’s new rector Nigel Carrington, have seized the Titian issue as an chance to draw attention to a lack of funds for art colleges. Right as it is that they should highlight the need to support young and living artists and not over-emphasise the past, they are also missing the point.

In recent times, the international art market has seen unprecedented prices due to buyers like Roman Abramovich and other Russian oligarchs. It is this which gives aristocrats such as the Duke of Sutherland a powerful leverage. The reason that the Duke is selling his paintings in the first place is because he is making “an elaborate piece of inheritance tax planning”, as Lucy Warwick-Ching puts it in the Financial Times. According to the Musems and Libraries Archives Council, £15.2m was written off last year in relations to donations of art.

If arts institutions become rivals scrambling around an ever-decreasing pot of public money, they will let the government off the hook and miss the wood for the trees. As long as corporate interests, especially the global auction houses rule the roost, high art and great masterpieces will be the playthings of the super rich. Art and art training will become less and less accessible to ordinary people as students accumulate vast debts and museums are obliged to charge high prices for temporary exhibitions and sell reproduction rights to global corporates.

Great public institutions like the National Gallery were formed when capitalism was in its ascendancy. In a pioneering move, Parliament provided for the creation of a gallery for all in 1824. As its site says: “With a commitment to free admission, a central and accessible site, and extended opening hours the Gallery has ensured that its collection can be enjoyed by the widest public possible, and not become the exclusive preserve of the privileged.”

These great aims are clearly endangered by successive governments like New Labour who have sought to “liberate the market” and now are totally at sea. At a recent meeting with members of the Critics Circle, the new culture minister, Andy Burnham, refused to be drawn on a commitment to help secure the Titians, saying the government would “take a middle seat and broker the situation”. How mealy-mouthed can you get?

Corinna Lotz
A World to Win Secretary

Tuesday, November 18, 2008

There is another way

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

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

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

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

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

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

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

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

Paul Feldman

Communications editor

Monday, November 17, 2008

The spirit of Shankly lives on

“The socialism I believe in,” said the legendary Liverpool FC manager Bill Shankly, “is everybody working for the same goal and everybody having a share in the rewards. That’s how I see football, that’s how I see life.” He is no doubt turning in his grave over the plight of his former club, whose future is now in the hands of crisis-ridden banks.

Shankly’s sentiments, common enough amongst football fans through time, have long been side-lined and ignored as big money and even bigger egos have taken a grip on the clubs at the top of the game and steered them away from their historic roots into a very dangerous place – the capitalist market place.

Premier league clubs alone are in debt to the banks to the tune of £3 billion; the situation in the lower professional divisions is even more critical. The total debts of these clubs is over £400m. Many clubs in the lower divisions are in hock to the tax authorities and could go bust at any time.

Liverpool and Manchester United have debts of £350m and £650m respectively. Their new American owners in both cases are extracting large sums from the clubs just to finance the buying of them in the first place. It is by no means certain that Liverpool’s owners, Tom Hicks and George Gillett, will be able to extend or re-finance their loan with their bankers, the troubled RBS, in January. Everton, with debts of around £60m, is up for sale, but so far there are no takers.

It is possible that with TV money, continuing big crowds, loans from the billionaires, and a soft approach by the banks (unlikely now), they will be able to ride the storm for a while, but there will be no hiding place in the medium and long term. What happens when hundreds of thousands of fans lose their jobs or find their savings and pensions funds, if they have them, devalued? How will they possibly afford the high-priced tickets? There will be gaps in the stands, ticket prices will have to come down and revenue will fall.

The other, and perhaps the most important factor, that could overturn the survival strategies of the clubs is the fans themselves. Long taken for granted, they are now beginning to assert themselves. Many Liverpool fans, for example, would support a financial boycott of the club should the present American owners remain in control after January 2008. In a poll carried out by the Liverpool Supporters Network last week, three quarters of the 2,000 fans canvassed said they were willing to withdraw financial commitment to the club in the form of match tickets and merchandising.

In Manchester, when the Glazer family bought Manchester United in 2005, a group of angry fans set up a rival club United FC which regularly attracts over 2,000 to home matches and boasts on the home page of their website that “FC United is owned by its members”. An adult ticket to a home game costs £7.50. Governing bodies FIFA and UEFA, which have warned about the indebtedness of English clubs, have taken an interest in United FC’s progress.

In Liverpool at the beginning of the year 350 supporters packed into a pub in Anfield and set up what they claimed was the country’s first football supporters union, with a series of aims. A short term aim is “to hold whoever owns the football club to account” and the ultimate aim is “the supporter ownership of Liverpool Football Club”. They call themselves the “Spirit of Shankly”, they have the quote about socialism by Shankly on their banner, and they symbolise the spirit of revolt by fans of football at the way in which their passion has been prostituted by the profit agendas of the new owners.

Peter Arkell

Friday, November 14, 2008

Can we do it? Yes we must!

As the political leaders of 20 of the biggest economies gather in Washington to work out how to fix the global capitalist economy as, like a runaway train, it heads straight for the buffers, the range of “solutions” is piling up. None of them have a hope of taking off.

For outgoing US President George Bush, the oh-so-obvious answer is “sustained economic growth”. He told a New York audience that "the answer is not to try to reinvent that system” but to “make the reforms we need, and move forward with the free-market principles that have delivered prosperity and hope to people around the world".

Others are into reinvention. Gordon Brown, who until recently thought globalised capitalism could not possibly be improved upon, is now for “creating a new global financial architecture” to replace the Bretton Woods monetary system (which actually collapsed 40 years ago!). The Germans want a “new balance between market and state” while the Canadian suggestion is that "dynamic new economic players ... must be full participants at the global table".

There’s another proposal aired by Bob Geldof. He is back banging the drum for Africa, which has been left out of the discussions. Bob wants to ensure that “900 million potential producers and consumers” are drawn into “the next round of globalisation”. With the whole world diving into slump, Bob sees salvation for capitalism in Africa.

And on that he’s at one with Bush, who just yesterday received a major humanitarian award from Africare for his work in Africa. No really, it’s true. According to Voice of America White House correspondent Paula Wolfson, Bush was honoured for his efforts throughout his administration to combat disease across the continent. Bush says America has an obligation to help the people of Africa. "It is in our national security interest that we defeat hopelessness. It is in our economic interest that we help economies grow.”

The brutal truth is all these plans, pleas and proposals are non-starters. Why? Because they all look beyond the current disastrous disintegration of the global economy to a bright, newly refurbished, much more regulated, fairer, capitalist world. This is not how capitalist slumps work themselves out.

Fixing the real problem - an overhang of capacity as global production turns from recession to depression and slump - has only one solution as far as capitalism is concerned. In 1942 in the midst of the Second World War, economist Joseph Schumpeter, a critic of Keynes, but a big fan of credit-led investment, published his most famous work Capitalism, Socialism and Democracy. It was then, with the world at war, that he chose to develop his version of the concept of “creative destruction”. That is already under way, with 10 million Americans already out of work and General Motors on the edge of bankruptcy.

Bush bemoaned the fact that critics were "equating the free enterprise system with greed, exploitation and failure" and objected to it. He is right to warn against the coming assault on the citadels of capitalism. There’ll be many demonstrations and protests against the G20 over the weekend and the election of Obama last week was itself a product of the anger millions of Americans who want action against bankers and corporations.

What is urgently needed is a concept of a society beyond the private ownership and control of capital, together with the leadership and organisation to make it a reality. Can we do it? Yes we must!

Gerry Gold
Economics editor

Thursday, November 13, 2008

Work makes you sick

As the planet’s eco-systems cannot cope with the stress imposed on them by capitalist forms of production, human beings are bound to be similarly affected.That is reflected in the fact that 2.8 million people in Britain claim what until recently was called incapacity benefit.

To reflect New Labour’s insistence that work is good for you, whatever the price in human terms, the benefit has been renamed “Employment and Support Allowance”. All new claimants must complete an assessment of their capacity to work and by 2010, all existing claimants will need to “sit the test”. Only those who know they are going to die soon or are so disabled that nobody could expect them to work (even benefits minister James Parnell) will be exempt.

People deemed capable of work could have their benefits cut if they don’t find a job. But only about £3 per person has been allocated to help people retrain and track down a job. Only around 50% of people who are registered disabled have a job and when they are in work they earn on average far less than other workers.

And the big question is how many people currently unable to work are in that situation because of their experience of Britain’s dangerous work environment?

For example, the death rate from asbestos-related mesothelioma and lung cancer is around 7,000 a year and it is still rising. Though asbestos is now banned, there are still millions of tons of the stuff in office buildings, factories, prisons, ships and shopping centres – sooner or later it will have to be removed. Around 250,000 Britons will die from asbestos before the death rate finally begins to decline.

The chemical industry is the UK 's largest manufacturing sector, with a turnover of £41 billion, employing more than 400,000 people. As many as 10,000 commercial chemicals are hazardous, of which 150-200 may cause cancer.

Around 4,000 building workers die each year from accidents and industrial diseases. Hazards they face include asbestos, musculo-skeletal disorders, falls, slips and tips and noise. Diseases they face include dermatitis, asthma, and emphysema.

There are between 1,500 to 3,000 new cases of occupational asthma every year, rising to 7,000 if you include pre-existing asthma made worse by work.

Exposure to noise at work is a significant occupational hazard. Research suggests that170,000 people in the UK suffer deafness, tinnitus or other ear conditions as a result of exposure to excessive noise.

People exposed to high levels of vibration – such as miners, road workers and people operating a range of machinery – can suffer serious impairments of their hands, arms and backs. A Medical Research Council survey in 1997-98 estimated 301,000 people suffer from vibration white finger (VWF) in Britain.

And finally, since the government implies that many of the people claiming incapacity benefit are simply shirkers, there is the crippling effect of stress at work. In research carried out in 2001-02 it was found that 5 million UK workers suffer stress at work and half a million believed it made them ill. The Samaritans, which counsels people thinking about taking their own lives, says that work is the biggest single cause of stress.

As Karl Marx explained, there is a major difference between work freely done with passion and enthusiasm, for a common end, and work that simply supports the production of profit. The first is “a free manifestation of life, hence an enjoyment of life”. But, presupposing private property, “my work is an alienation of life, for I work in order to live, in order to obtain for myself the means of life. My work is not my life”. Or as William Morris argued, useful work not useless toil, is what a fair, equal, democratic society aspires to provide.

Penny Cole
Environment editor

Wednesday, November 12, 2008

New Labour isn’t working

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

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

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

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

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

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

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

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

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

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

Paul Feldman
AWTW communications editor

Tuesday, November 11, 2008

A drawing down of blinds

What is left unsaid on November 11, when the slaughter of World War One finally ended exactly 90 years ago, needs to be shouted from the rooftops: the 750,000 British soldiers who were killed – and those from other countries who died – were victims of a war not of their making and fought not in their interest and that the reason for their deaths is still present today.

This shocking waste of life needs to be remembered and honoured – but not in the sickening and hypocritical way that politicians from the major parties and the establishment do. They still can’t even look after their fallen or wounded troops, who, instead, often have to rely on charity and the proceeds of poppy sales in civilian life.

We need a memorial that spells out the truth, which explains that those who died and the hundreds of thousands who were maimed, were cannon fodder for others. Propaganda would have it that it was the “war to end all wars” and fought for British democracy against the tyranny of the Hun.

In reality, it was an imperialist war fought over the division and redivision of colonial spoils, with the challenge of Germany to Britain’s empire and passing industrial might the principal cause of the first global conflict. The war was followed shortly afterwards by recession and slump, leading directly to a resumption of hostilities in 1939.

The connections with 2008 are more and more self-apparent. At the heart of the 1914-18 war was an essential contradiction of the capitalist system. Capitalism has to expand on a continuous basis, to discover and conquer new markets, to drive out competitors and secure sources of raw materials. If it cannot, it plunges into crisis and international tensions inevitably build up.

Today, globalised capitalism is heading for a slump greater than the 1930s because it is an irrational system that from time to time is compelled to destroy a large portion of what it created. As British political leaders scrabble around to promise better tax cuts than the next party, their actions look more and more irrelevant. General Motors, one of the world’s biggest carmakers, is bankrupt. The fall-out from the financial crash is building into a tsunami.

As the same capitalist fundamentals that produced two world wars in the last century are still present, we must be on our guard against new calls to arms to fight for Queen and country. Wilfred Owen, the war poet, was killed a week before the ceasefire (right up until the last minute, until the 11a.m armistice, generals were sending troops over the top to die) and his words are more honest than those who claim to speak for the fallen:

Anthem for Doomed Youth

What passing-bells for these who die as cattle?
Only the monstrous anger of the guns.
Only the stuttering rifles' rapid rattle
Can patter out their hasty orisons.
No mockeries now for them; no prayers nor bells;
Nor any voice of mourning save the choirs, –
The shrill, demented choirs of wailing shells;
And bugles calling for them from sad shires.
What candles may be held to speed them all?
Not in the hands of boys but in their eyes
Shall shine the holy glimmers of goodbyes.
The pallor of girls' brows shall be their pall;
Their flowers the tenderness of patient minds,
And each slow dusk a drawing-down of blinds.


Paul Feldman
Communications editor

Monday, November 10, 2008

In the state's firing line

Behind the turmoil of the economic and financial crisis, New Labour is stepping up its construction of a surveillance state that assumes that every citizen is an “enemy within”. The latest threat is contained within the innocuous sounding Data Communications Bill.

This will authorise the construction of a single massive database to hold the details of every phone call and email sent and received and every Internet site visited by the UK population. This is Big Brother writ very large indeed. It has alarmed even the government's own reviewer of anti-terrorist legislation, Lord Carlisle, who openly says such a database is too “awful” to contemplate.

Awful or not, it is full-steam ahead on all fronts. ID cards are being introduced for airport workers and no doubt pressure will mount for everyone to carry one. You can see it being a requirement when you open a bank account, transfer money or use your credit card. A sign of this is the requirement in the new bill for people to produce their passport when buying a mobile phone. In this way, the database state will build up details of everyone’s mobile.

As an article by Martyn Warwick on the TelecomTV site warns: “Currently, these can be bought, anonymously, for cash over the counter and there is no doubt that pre-pay phones are the communications devices of choice for terrorists and criminals. However, despite the hysteria the government, post 9/11 and 7/7, likes to whip-up and maintain to keep us fearful and biddable, terrorists and criminals form a minute part of British society. What's more, most of them are clever and can, and will, easily and quickly circumvent appearing on any Big Brother phone-ownership database while the rest of us will be ‘on The List’ and subject to God knows what disproportionate secret surveillance.”

Meanwhile, a conference of IT, security and finance executives has been warned that suppliers who collaborate with the government may be at risk of acts of violence, including the smashing of computer centres. Ian Pearson, a former BT "futurologist" and a chartered fellow of the British Computer Society, predicted that the government's crackdown on law-abiding people could lead to marches in the street, demonstrations outside some computer centres and targeted acts of violence.

He told the invited audience : "By 2012 to 2013 tops you will see a technology backlash in the major population. Why is it relevant to you? Because if your firm is providing services to government authorities, which help the government to crack down on law-abiding people, you are in the firing line." He added: "Be careful how you market new products. Make sure people do not understand the link between you and the government which is trying to crack down on their everyday lives. That will make you on the wrong side of the firing line." Pearson listed what he called examples of “The Stepford Society”:

  • Road tolls via satellite-tracking
  • Speed cameras
  • DNA databases
  • Identity cards
  • 25% of the world's CCTVs
  • Face recognition systems
  • Tax enforcement via integrated databases
  • Speed limits built in car management system
  • Government knows everywhere you go
  • Extensive and permanent police records
  • One stop shop for all government data
  • Monitoring of e-cash
  • Number-plate recognition
  • Abuse of millimetre wave cameras (which measure waves naturally emitted by the human body, exposing "cold" objects under clothing)
  • Extensive monitoring of all electronic activity.

While Pearson is warning suppliers to get out of the firing line, ordinary people remain right in the government’s sights. The proposals made in Unmasking the State for a new, democratic system in place of the authoritarian, surveillance, database capitalist state are more relevant than ever.

Paul Feldman
Communications editor

Friday, November 07, 2008

The 'great debt unwind' continues apace

Central banks are slashing base rates across Europe in a renewed, desperate attempt to minimise the impact of the unstoppable descent into slump. Their combined efforts can be compared to joining hands in a line to confront an avalanche of snow head-on. You just know what the result will be.

Many, but not all, commentators and analysts have expressed surprise and shock at the unexpectedly large 1.5% cut made by the previously ultra-cautious UK Monetary Policy Committee which is supposed to be motivated by keeping inflation under control. Many of those amazed by the size of the cut simply haven’t cottoned on to the historically unprecedented depth and breadth of the global crisis.

With Britain predicted to be the worst hit by a shrinking economy of the developed countries – the extinction of companies like Royal Worcester & Spode, one of Britain's oldest pottery makers, with its roots stretching back to 1751 is significant – the fear is now that inflation will turn into its opposite. Falling prices may suit consumers but with raw materials' prices volatile and sales falling, many companies will see their margins squeezed even further and be forced out of business.

Indebted consumers with pressures on jobs and housing growing daily, have been forced to turn their back on many goods. New car sales in the UK slumped by 23% last month - in effect, the biggest fall for 17 years. In the US and Europe things could hardly be worse as car sales have declined dramatically – falling as much as 20% on last year. GM, Ford, Chrysler, Peugeot, Fiat, Tata owned Jaguar Landrover and BMW, Honda and Bentley are all in big trouble, closing plants and laying off workers.

Despite appeals and exhortations from Chancellor Alistair Darling, the likelihood that the deep cut in the base interest rate will be passed on in full to individuals and small businesses is close to zero. There are some who are beginning to realise what is going on. Alex Allen, chief investment officer at fund of hedge funds boutique Eddington Capital Management, believes that equities are set for a four- to five-month rally before a "cataclysmic crash" next year.

"At the edges where markets are liquid we've been willing to call the bottom. We're bullish on equities for the next four to five months and then we expect to see the final cataclysmic downleg," he said. "Equities will go to at least 50% below where they are now. It's going to be as bad as 1929," he said. "Equity markets are extremely expensive."

But what is going on now puts 1929 in the shade. In the few years following the Wall Street crash, share markets fell by 90% of their pre-crash value. The scale of today’s burst balloons of credit and debt are unimaginably much greater. A month ago the assets of failed global investment bank Lehman Brothers were auctioned off. The loss in value gives just a hint of what is to come. The auction set a price for Lehman bonds of 8.625 cents on every dollar. Financial firms that sold credit default swaps, therefore, left owing 91.375 cents on the dollar. And this is just a small part of the big, much bigger picture.

Warnings from those who are in the know should be taken seriously. “This time next year, Obama euphoria will be crushed under the weight of the unfolding economic and market meltdown,” says Albert Edwards, analyst at Société Générale. “The crushing weight of the ‘Great Debt Unwind’ has only just begun.” Throwing that weight off and re-establishing the economic and financial systems on a new, not-for-profit foundation is the urgent task at hand.

Gerry Gold
Economics editor

Thursday, November 06, 2008

Paying for oil with their lives

People are enjoying a national holiday in Kenya today to mark Barack Obama's family connections with the country and across Africa millions look hopefully towards the USA and its new African-American President-elect. Also today, in San Francisco’s District Court, the oil company Chevron is fighting a case brought by a group of Niger Delta villagers. The company is accused of using soldiers to attack a peaceful demonstration, killing two people and wounding many others.

In May 1998, Larry Bowoto – one of the plaintiffs – led 100 villagers who occupied Chevron’s Parabe oil platform, nine miles off shore. Other plaintiffs are the wives and children of Arolika Irowarinum, who was killed, and of Bola Oyinbo, who the villagers say was detained by the soldiers, hung by his wrists and tortured to death.

Chevron claims the villagers took 150 workers hostage, and demanded money and employment. The villagers say they were protesting against the devastation caused by leaks, gas flaring and pollution and that they were demanding compensation, not a ransom. They were unarmed, and say they were preparing to leave at the moment the troops arrived by helicopter and opened fire. These were Nigerian soldiers, stationed in the Delta and housed and fed by Chevron. They arrived in helicopters leased by the company.

Based on the iron law of private property, the oil companies view with contempt any demand from the 20 million people who live in the Niger Delta to share in the wealth generated by oil production. Tribal leaders try to use the courts to prise compensation for their ruined land and livelihoods out of the oil giants, with little success. There are around 14,000 outstanding compensation cases. The compensation sought amounts to about $100 million. The Chevron Corporation’s net income for the first nine months of 2008 was $19 billion.

Not surprisingly, a number of militant movements have sprung up in the Delta, including the Movement for the Emancipation of the Niger Delta whose leader Henry Okah is currently facing trial in Lagos. They take hostages and blow up pipelines; they are characterised by the US and Nigerian governments as terrorists when they are actually fighting for what belongs to the people.

The oil companies pay the Nigerian government to station thousands of troops in the Delta to protect their operations from the militants. They have little success in doing that, but are entirely indiscriminate in attacking the civilian population who are living under brutal occupation.

The US Government is clear that Africa will be its major source of oil in the near future. One of the decisions that Barack Obama will have to make is about the future activities of AFRICOM, a special military command centre set up by George Bush which began to function in October this year. Whilst for the moment its headquarters are in Stuttgart there are strong rumours that is planning a base of operations in Nigeria.

Another of its special areas of interest is Equatorial Guinea. One might wonder why the focus on Africa’s smallest country which consists of a tiny coastal strip and a group of offshore islands. But in the sea off those islands there are major oil deposits, ripe for exploitation. Will Obama be halting the quasi-imperialist activities of AFRICOM? Don't put money on it.

Penny Cole
Environment editor

Wednesday, November 05, 2008

US voters vent their anger

Barack Obama’s historic and clear-cut victory in yesterday’s US presidential election is the result of a mass mobilisation of people and energy by his campaign that will prove all but impossible to contain within the narrow confines of the American political system.

Obama has articulated and unleashed a popular fury against a degenerate system of government based on back-room deals done in Washington with lobbyists representing powerful corporations. His appeal for change united classes and races against the corrupt, undemocratic status quo, winning overwhelming majorities of young voters, new voters, women, blacks and Latinos. It enabled Obama to overcome the country’s racial divides and become the first Afro-American president.

He built an extensive grass-roots movement, using the Internet in new ways to reach people across the country. This movement in turn galvanised voters to turn out in record numbers on election day. Obama created a formidable machine that the Republican Party could not hope to match.

Yet the principal issue cited by voters - the economy - is one that Obama and the Democratic Party will almost certainly be overwhelmed by. Before the collapse of the US financial system in September, which led to the $700 billion bail-out for the banks, Republican candidate John McCain was edging ahead in the polls.

Then came the collapse of Lehman Brothers and other institutions. After that American people who are losing their jobs, pensions, homes and healthcare, turned to Obama to put things right.

Several things stand in Obama’s way. The US economy is in meltdown as a global slump on a far greater scale than the one that followed the 1929 Wall Street crash takes on a momentum of its own. This will be exacerbated by further earthquakes in the financial system as the era of fantasy finance comes to a crashing end.

Finally, the Democratic Party is a capitalist party. Half of Obama’s $630 million in campaign funds came from corporate sources. Challenging the ultimate status quo – capitalism itself – is not considered an option, even though the profit system is demonstrably showing itself as unsustainable in every conceivable way. Fixing American capitalism is what Obama aims to do, bring workers and capitalists together; it is a doomed project.

Obama’s other project – to renew people’s faith in a political system and constitution that has fallen into deep disrepute – will be thwarted if Obama is unable to deliver. People’s expectations and aspirations are clearly sky high, leaving them with a long way to fall.

A period of history has to come a shattering end with the ousting of the Republicans from the White House. The Bush-Cheney regime personified the greed and the lust for power that was corporate-driven globalisation. Their Project for a New American Century (PNAC) led to the invasion of Iraq and Afghanistan and the “war on terror”, which only encouraged would-be Jihadis everywhere and authoritarian rule at home. The crash of 2008 it what finally destroyed the ideological underpinning of this most reactionary of projects and propelled Obama to the White House.

A popular movement against the status quo is now on the march in America and it will encourage others around the world. What Obama has demonstrated is that it is possible to mobilise hundreds of thousands, even millions, of people if they feel they have a leadership to trust and be inspired by. In his acceptance speech, Obama invoked Abraham Lincoln’s Gettysburg address, where he talked of “government of the people, by the people, for the people”. Fulfilling that aspiration means going beyond the US Constitution’s current framework. Obama has started something that others will have to finish. The failed PNAC will have to be followed by the Project for a New American Revolution.

Paul Feldman
Communications editor

Tuesday, November 04, 2008

A global land grab is underway

Today's food and financial crises have, in tandem, triggered a new global land grab. "Food insecure" governments that rely on imports to feed their people are snapping up farms all over the world to outsource their own food production and escape high market prices.

Private investors, hungry for profits in the midst of the deepening financial crisis, are eyeing overseas farms as an important new source of revenue. As a result of both trends, fertile agricultural land is being swiftly privatised and consolidated by foreign companies in some of the world's poorest and hungriest countries. A new report from the sustainable farming group GRAIN examines 100 cases of agricultural land grabbing - whether for food or simply for profit - that have exploded this year. The report says:

"Given the current financial meltdown, the investment houses that manage workers’ pensions, private equity funds looking for a fast turnover, hedge funds driven off the now collapsed derivatives market, grain traders seeking new strategies for growth – are turning to land, for both food and fuel production, as a new source of profit. Land itself is not a typical investment for a lot of these transnational firms. Indeed, land is so fraught with political conflict that many countries don’t even allow foreigners to own it. And land doesn’t appreciate overnight, like pork bellies or gold.

"To get a return, investors need to raise the productive capacities of the land – and sometimes even get their hands dirty actually running a farm. But the food and financial crises combined have turned agricultural land into a new strategic asset. In many places around the world, food prices are high and land prices are low. And most of the “solutions” to the food crisis talk about pumping more food out of the land we have. So there is clearly money to be made by getting control of the best soils, near available water supplies, as fast as possible."

Saudi Arabia and China are just two nations out buying farms, from Sudan to Cambodia, to satisfy their own food needs. In these cases, governments, sometimes through sovereign wealth funds, are negotiating rights to foreign land - whether by purchase, concession or lease - so that their corporations can come in and produce food to export back home.

In return, they are offering oil contracts, soft loans, infrastructure projects and development funds. The food-hungry land grabbers include China, India, Japan, Malaysia, Korea, Egypt, Libya, Bahrain, Jordan, Kuwait, Qatar, Saudi Arabia and United Arab Emirates. Those giving up their land, in exchange for the oil deals or investments, include the Philippines, Mozambique, Thailand, Cambodia, Burma, Laos, Indonesia, Pakistan, Sudan, Uganda, Brazil, Paraguay, Uruguay, Ukraine, Russia, Kazakhstan and Zimbabwe. The plan is to capitalise on low land costs and high food prices wherever fertile farmland is available, such as in Ukraine, China, Russia, Nigeria, Argentina, Brazil and Kazakhstan.

The money-hungry land grabbers are getting help from agencies like the World Bank, its International Finance Corporation and the European Bank for Reconstruction and Development, who are pressing target countries to change their laws and make stronger land ownership by foreigners possible. While political leaders and UN bodies are trying to "manage" the potential backlash, farmers' organisations, opposition parties, human rights groups and others are challenging and resisting these deals. But much more needs to be done to stop this massive sell-out of the very basis of food sovereignty.

This is an edited version of the GRAIN launch of the report Seized: The 2008 landgrab for food and financial security.

Monday, November 03, 2008

Obama is riding a tiger

As the most expensive election campaign in US history draws to a close – candidates have spent over $1.5 billion since the primaries began last year – one thing is certain whoever gets to the White House: the power relations that dominate American society will not change.

Despite Barack Obama’s fine oratory in which he rails against the corporations, chief executives and Wall Street, all they are threatened with is having their feathers trimmed at worst and a rap over the knuckles at best. In fact, John McCain’s speeches as Republican candidate have sounded remarkably similar in their populist appeal to those of his Democratic Party rival. While Obama has raised $300 million in small donations, he has raised an equivalent amount from big business.

As the film-maker and activist Michael Moore, who has campaigned for Obama, has pointed out, his promise to extend health care to ordinary Americans is hedged with conditions, saying: “I don't agree with Senator Obama's health plan. It's not a single-payer universal healthcare plan. It doesn't cover everybody. It's not non-profit. It still sends billions of dollars into the hands of insurance companies and pharmaceutical companies, etc.”

Moore, like many US liberals is hoping beyond hope that Obama is a) playing it cautious to get elected and/or b) control of the US Congress by the Democrats will force Obama to adopt a more radical position and go for universal health care. I heard similar arguments on the eve of the 1997 general election in Britain, when people said New Labour under Tony Blair had played it safe just to get elected and when they got in, everything would change. It sure did – for the worse!

Whoever wins the race for the White House is facing a meltdown in the American economy and a financial system that is on its last legs. General Motors, once synonymous with US manufacturing power, cannot continue without state support; many smaller firms are going to the wall. Tens of thousands of Americans are losing their jobs and homes each month. The government itself is heavily in debt, borrowing like there is no tomorrow to bail-out Wall Street. These are fairly insuperable problems.

If, as seems probable, Obama is the victor tomorrow it will, of course, be an historic event. Electing a black man to the White House will be remarkable for a country where slavery was legal less than 150 years ago and where racial discrimination meant blacks in some states had to sit at the back of the bus only a half a century ago.

Obama has mobilised a formidable grass-roots campaign (his Facebook site has 2,500,000 members!) in virtually every community across the country. Tens of thousands of volunteers have helped create a new political movement in parallel with the Democratic Party. The volunteers are treated as equals inside the Obama machine, given a relative autonomy to go out and build. There are lessons to be learned from this approach, no doubt.

America is undergoing a massive change. The demonstrations against the Wall Street bail-out were only a start in a country where hatred for the power of the corporations and bankers is only second to the contempt many people have for the games played out in Washington. The deeply reactionary Bush years have produced one telling statistic: 90% of Americans think the country is on the wrong course.

The contradiction is this: In the end Obama is a capitalist politician and leader of a capitalist party; yet if Obama triumphs, he will have been swept to power on a tide of social discontent and anger. It will be like riding a tiger – you either succeed or get eaten.

Paul Feldman
Communications editor