Monday, August 31, 2009

Oil sharks circle Libya’s party

Guests from around the world are gathering today in the Libyan capital, Tripoli for the 40th anniversary celebrations of the revolution which toppled the colonial puppet King Idris. The week-long festivities mark an unprecedented opening up to outsiders just as Libya has hit the headlines with its warm reception for Mohamed al-Megrahi, the only person ever convicted in connection with the Lockerbie bombing.

The commemorations will help to free Libya from the pariah status it has suffered ever since 27-year-old army officer, Captain Muammar al Gaddafi led a group of army officers to overthrow the corrupt monarchy in a nearly bloodless coup. The Revolutionary Command Council aimed to “turn Libya, now under-developed and badly governed, into a country which will fight against colonialism and racism and will help colonised countries”.

Gaddafi sought to improve the lot of Libyan citizens, who had suffered under Italian occupation and under Idris, a cat’s paw for US, Italian and British oil interests. Gaddafi was inspired by Gamal abdel Nasser, who achieved Egyptian independence in 1952 and inspired anti-colonial revolutions throughout the Middle East. The Libyan leader went far beyond his hero in his moves to democratise Libyan society.

The September 1 regime struck horror into the United States and Britain, who until then extracted cheap oil through companies like BP while Libyans languished in poverty. Gaddafi urged the liberation of Palestine and redistribution of land and resources. He removed foreign bases, nationalised the banks and established the Libyan national oil company. He also raised the price of Libyan oil. (Libya, the Struggle for Survival, Geoff Symons 1993).

Gaddafi set out to transform Libya from the world’s poorest country into a rapidly developing one. Oil income was invested into diversifying the economy, irrigation and desalination, health and agriculture. The nomadic Bedouin and Tuareg of the desert were protected.

In 1973 Gaddafi launched a political revolution which culminated in 1977 with the creation of the “Authority of the People” through the Socialist People’s Libyan Arab Jamahiriya – translates as “state of the masses created to give power directly to the people”. In 1975 the Libyan General Women’s Federation was established; Libyan women enjoyed greater freedom than almost any in the Arab world.

But his dream of achieving pan Arab and African unity were actively thwarted both by the big powers as well as Arab and African national regimes. The Soviet Union provided MiG-25 combat fighters, but the Kremlin Stalinists bitterly opposed Gaddafi’s support for revolutionary democratic movements. In 1975, Egyptian president Sadat, who signed a peace deal with Israel and the US, described Gaddafi as "100 per cent sick and possessed by the devil".

The Reagan regime was obsessed with hatred for this tiny but obdurate country, and on 15 April 1986, US Air Force Navy and Marine Corps carried out air-strikes against Tripoli and Benghazi, Libya’s main cities. Forty people were killed, including Gaddafi’s daughter. Two of his sons were injured as the US narrowly missed their key target.

Embargos and sanctions forced through the UN by the US, Britain and Israel, as well as falling oil prices took a heavy toll and GDP shrank by 40% in the 1980s and 1990s. In 1984 anti-Gaddafi exiles surrounded the Libyan Embassy in London and a policewoman was shot. After an 11-day siege by the British state, the Libyan officials were released and returned to Tripoli. Britain broke off relations with Libya.

In December 1988, a Pan-Am flight was brought down by a bomb over the village of Lockerbie, and Libya was blamed. Last week’s release of al-Megrahi had two aims: to sweeten deals between British companies and Libya and to prevent Megrahi’s appeal from taking place.

The economic meltdown of the global economy is driving a renewed search for cheap sources of oil. While visitors and locals party in Libya’s cities, ships chartered by BP are greedily prospecting the Gulf of Sidra off Libya’s coast. And details of the secret deal signed in 2007 by BP with Libya’s National Oil Corporation with Blair looking on have just come to light.

Gaddafi remains a champion of the cause of African unity in words at least and today he will chair a summit meeting of the 53-nation African Union (AU) in Tripoli. But Libya has made a nasty deal with Italian Prime Minister Berlusconi, at the expense of refugees and asylum seekers. Libya’s Internal Security Agency is described by Amnesty International as having “unchecked powers to arrest, detain and interrogate individuals”.

The US, Britain and other European countries want to draw Libya into their orbit from a position of weakness. Reeling from their failures in Iraq and Afghanistan, they are trying a more softly-softly approach. This is a sign that the gains of the national liberation movements of the 1960s and 1970s have not been entirely lost. We now live in a very different time with the capitalist economy in a much deeper crisis. Signing deals with the corporations is not the way to go.

A return to pan-Arabism and pan-Africanism at a new pitch, to reflect the challenges of the globalisation of the world economy and the role of transnational corporations, is what is needed. Otherwise Libya risks becoming yet another pawn in the global oil game, where countries alone, however tough they try to be, find it hard to defend their national interests.

Corinna Lotz
A World to Win secretary

Friday, August 28, 2009

From blessing to curse

Capitalism, by its very nature, transforms paradises into deserts. Take Uganda, a country that enjoyed fertile soil, excellent water supplies, good rains and sizeable deposits of copper, cobalt, gold, and other minerals.

Now after a long drought which has left many people dying of hunger, the country is bracing itself for another round of torrential rain and floods which have replaced the former more stable climate. Uganda has faced similar severe conditions in 1994, 1997 and 2007. Last year’s main food crops were washed away,

There is no doubt that Uganda is suffering the effects of global climate change; and its local contribution to the problems include draining of wetlands for agricultural use, deforestation and overgrazing. Cash crops, such as coffee and vegetables for export, have exacerbated the problems.

Farmers are now being told to look at changing the crops they grow, to reflect the new seasons. The government is promoting growing of cassava, which can survive on low soil fertility, and grows quickly. Cassava is a quick fix for hunger, but lacks key vitamins and minerals needed for long-term health.

Now this week it was announced that some of the world’s biggest oil companies – including BP, Shell and state-owned Chinese oil companies, are planning to bid to take over a small British firm which has struck oil near Lake Albert.

Tullow, the company involved, has found an oil field that may be as big as some of the North Sea’s biggest.

But is this find a blessing or a curse? Ugandans are looking with great concern at what oil has meant for Nigeria. Environmental destruction has gone alongside wholesale corruption and robbery, leaving the Nigerian people worse off then before the oil find. Dictatorships have been kept in place with the oil money; thousands of people in the Niger Delta have died or been killed.

The government of Yoweri Musaveni had asked Tullow to refine any oil they found in Uganda, to ensure the country benefited from jobs and revenue. Now Tullow is selling, Ugandans will be subject to the same corporate smash and grab operations.

And at the same time as the oil companies are moving in, the Ugandan government is fighting a rearguard action to stop the all-Africa land grab from reaching their country. Musaveni has just blocked an attempt by Libya to purchase a 60 square mile ranch in Masindi province. Already Indian agribusiness has bought up the Ugandan rice crop, and Chinese growers are also looking their way.

In a civilised world, it would not be possible for rich countries to literally take the food from the mouths of people. But in countries where the food supply is insecure and famine threatens – such as Sudan, Tanzania, Ethiopia and Kenya – thousands of acres have been bought up. And it is not only for grain crops, but also bio-fuels, where British, US and German firms are the biggest culprits.

The global capitalist system actually needs a level of starvation for its survival, and continued profits. And so it is a system that does not deserve to survive. The challenge is to remove it by first replacing the political structures that support the rights of private property and profit above all other considerations.

Penny Cole
Environment Editor

Wednesday, August 26, 2009

Not holding back the tide

US President Obama has re-appointed Bob Bernanke as chairman of the US central bank the Federal Reserve for a second four-year term. You can see why.

Bernanke is an expert on the Great Depression, and has sophisticated views about what he sees as policy errors that brought it about following a catastrophic financial crisis. Sounds familiar?

Bernanke is justly famous for the ideas on monetary policy he adopted from Milton Friedman – Margaret Thatcher’s economic mentor. These ideas were a big factor in the introduction of quantitative easing designed to increase the flow of credit (and debt) once interest rates had fallen to zero. “QE”, as it’s become known, is credited with a slight slowdown in the rate of economic deterioration.

It was back in 2002 that Bernanke referred to the use of the ‘helicopter drop’ of paper money directly into the hands of the population, bypassing the banks as a way of restoring demand. Astonishingly, that policy was used for real during the invasion of Iraq.

The effect of his policies can be seen in the White House’s latest estimate of its budget deficit: $2,000bn – that’s $2 trillion - higher over the next 10 years than it had predicted as recently as March.

As the recession drives US unemployment beyond 10%, those losing their homes through foreclosure have spread from the sub-prime mortgage holders in the poorer areas to the middle classes, and the numbers are increasing. Government income from tax is being hit hard, and the cost of the limited benefits that the US states do provide – food stamps and short-term payments to the newly unemployed - is accelerating.

And, despite optimistic predictions about a recovery, the White House’s near-term revised expectation is for the US economy to shrink by 2.8% this year – far worse than its previous estimate of a 1.2% decline.

It’s not just the White House that got it so wrong. The Congressional Budget Office released sharply higher deficit projections predicting the 10-year deficit would reach $7,140bn, some $2,700bn more than it had thought in March. The newly published figures on the rising tide of debt don’t even include the effect of Obama’s latest plans. Bill Gale, a senior economist at the respected Brookings Institution says taking these into account implies a ‘deeply alarming’ deficit increase way in excess of $10 trillion over the next decade.

The only conclusion to be drawn from the latest US figures is that the economy is way beyond the control of Bob Bernanke. Four decades of globalisation have ensured that the financial and economic juggernaut can not be guided, let alone controlled by the pilot of even the world’s most powerful economy.

As the global capitalist crisis deepens, it exposes the absurd optimism – indeed, the helplessness - of those supposedly in charge of putting things right. Indeed, the pink pages of the financial world’s most prestigious daily, The Financial Times, are sprinkled with perplexed mutterings. On the back of this week’s “Fund Management” review, for example, is the headline: “Time to ditch all economic models”. Writer Vince Heaney argues that the “efficient markets hypthothesis”, - the EMH, has a “lack of relevance to how financial markets actually work”. In other words, the Friedman-Thatcherite-New Labour dogma that market forces must be allowed to prevail has been exposed as a formula for disaster. Heaney goes on to warn of coming “extreme events” in the financial markets.

Bernanke’s middle name is ‘Shalom’. It means peace, but don’t expect it anytime soon.

Gerry Gold
Economics Editor

Monday, August 24, 2009

Perils of the Swedish model

The stakes are being raised between those cheering on Tory proposals for “free” (read for the privileged few) education - and those who believe in the principles of equal, universal and free access to education.

Leading the charge to endorse what the Tory shadow education minister calls the “Swedish model” of “free” schools - is one Toby Young.

Young, who has attended Oxford, Harvard and Cambridge universities, says he wants to adopt the Tory notion of a new-style school for his four children, because, in his view, “comprehensives let down some pupils” especially himself. He made his proclamation in yesterday’s The Observer. Young’s glowing endorsement of “free schools” follows revelations of an ever more yawning class and wealth divide after the publication of A-level results last Thursday. The exam results showed a record number of pupils achieving A-level results, but with a record gap in their “class distribution” .

Pupils at state schools have fallen way behind in the fierce competition for A level grades which are essential to secure university places. More than 50% of A-levels taken by privately educated pupils scored an A compared with 20% of those in comprehensives.

Last year, the chasm between privately-educated pupils and comprehensives stood at 31% of privately-educated pupils achieving triple ‘A’ scores, as against 26% of selective grammar schools and 7.7% in comprehensives. Studies at Buckingham University and one by Cambridge Assessment (which runs three exam boards) last week revealed what amounts to a collapse of some state schools. Pupils are not being entered for subjects like A-level physics, history, science, geography or languages because it is thought they are unlikely to pass them.

Toby Young’s father Michael, who founded the Open University, coined the word “meritocracy” in his futuristic 1958 book The Rise of the Meritocracy. In it he argued that the vested interests of the middle classes would undermine the movement to establish comprehensive education. Michael Young latterly asked former PM Blair to drop the word “meritocracy” from his vocabulary.

“It is ironic, says Michael Pyke, of the Campaign for State Education, “that Michael Young’s son would help make his father’s prediction come true. Toby Young is from an extremely privileged background. For him to blame comprehensives for his failure to get O-levels is frankly dishonest. All research shows that such pupils do extremely well at comprehensives. Measured outcomes of school performance are determined 85% by parental background.”

In Pyke’s view, the success of independent schools is no mystery. “Resources are an important factor in success. A school with teachers and pupils who have the time and resources to research the methodology of exam boards can maximise their marks. In my view coaching is on the way to replacing education. The independent sector has doubled fees over the last 20 years but not the intake of pupils. Rich people are focusing their wealth on educating their children.”

As with New Labour’s ‘academies’, those who suffer from “free” schools being set up are existing public authority schools – this is already the case in Sweden. “Children are a crucial resource in schools,” says Pyke. “Concentrating the most aspirational children in new schools is robbing state schools of those who encourage others to do well,” Pyke explains.

The stark truth is that behind the “discovery” of the Swedish model is the desire to rob the public purse to fund the education of the rich and the upper middle classes. Much as we have seen Brown and Darling do with the banking bail-out. The only thing free about the Cameron-Young plan for schools is the freedom of the well-educated rich to exploit the rest of society to benefit their offspring, while the poor sink ever lower in the education stakes.

Corinna Lotz
A World to Win secretary

Friday, August 21, 2009

All out for the Climate Camp!

Climate Camp 2009 will “swoop” on a site near the hated City of London, on August 26 and the camp’s website sets out 10 good reasons for choosing this location.

One reason is that there are more branches and subsidiaries of international banks in London than in any other city in the world. “The Royal Bank of Scotland, Britain’s high street bank most closely associated with financing fossil fuel projects, has received billions of pounds of public money and is now more than 70% owned by the UK government.

“Yet despite this research shows that, since October 2008, RBS has financed loans to companies involved in the oil, coal and gas industry worth almost £10 billion. And yet renewable energy projects, like the Isle of Wight wind turbine blade factory, are being abandoned,” says Climate Camp 2009.

Top of the list for being in the City, however, is the fact that “London is currently the natural habitat of the transnational corporation, one of today’s most powerful causes of social and ecological injustice. Unaccountable, undemocratic and causing catastrophic climate change, these creatures need to driven into extinction.”

How to achieve this excellent goal will be the focus of the workshop that A World to Win is hosting on Saturday, August 29

The title of our workshop is “Composting Capitalism”, and we will argue that it is the capitalist state that stands between us and a sustainable future for humanity and other species and eco-systems.

The transnational corporations do not maintain their rule over us directly. For that they rely on the state - parliament, local government, education, the police, the army and of course, the monarchy. This network of control maintains the rights of private property and the right of the transnationals to exploit the planet for the extraction of profit.

Whether we like it or not, we can’t ignore the state, jump over it, or opt out of it. And experience shows that it is impossible to reform it, either. We must not rely on these structures to act to halt climate change.

We cannot start to tackle the devastation wrought by the capitalist drive for profit until we liberate the resources, talents and technologies created by humanity as a whole from their power and control.

We need to overcome what Marx called the “metabolic rift” that capitalism has imposed between humans and nature. Only in this way can we defend our own society, other species and eco-systems.

Therefore, creating a new democratic, transitional state is the key to liberating nature from corporate pillaging. We need to start now by organising local, regional and national Conventions that bring together people whose lives and livelihoods are being destroyed by the capitalist crisis.

As more and more people reject parliamentary politics and parties and start looking for new democratic solutions, we have a window of opportunity. We should not hesitate to establish our own parallel structures as test beds for democracy.

Direct actions along these lines would amount to a sustained challenge for power.

We look forward to seeing you at Climate Camp, and hearing your views!

Penny Cole
Environment editor

Wednesday, August 19, 2009

Counting the cost of the meltdown

While the International Monetary Fund suggests that the recession has bottomed out, all the signs merely indicate a pause in the crisis before a further lurch towards slump in the coming months.

The recession continues to deepen in Chile and South Africa, for example. Further shocks are to be expected as commercial property values decline, and rising unemployment forcing more workers to default on mortgage and credit card debt adds another twist to the downward spiral.

Germany’s economic ministry is working with its central bank on measures to deal with a second credit crunch expected early next year. Hartmut Schauerte, the economic state secretary says firms with weak balance sheets may struggle to roll over loans as they come due in coming months. Negotiations with banks could prove "very difficult", he admits.

The UK government’s gamble with quantitative easing, its last-ditch largely failed attempt to restore the flow of credit by printing money, is looking dangerously inflationary and is leaving buyers of government bonds increasingly jittery.

The costs of slowing the decline to slump, let alone any return to growth, are appearing in many forms. Alongside short-lived government sponsored scrappage schemes designed to clear millions of over-stocked cars, billions have been poured into “restructuring” the industry worldwide – the costs of mothballing factories and sacking workers.

Where workers have resisted – as in the now ended 77–day occupation of Ssangyong’s plant in South Korea – the price included the mobilisation of state forces in scenes evoking dystopian medieval pitched battles, with besieged workers armed with slingshots and bamboo staves taking on company thugs, helicopters dropping teargas and taser-wielding riot police.

UK tax income has fallen as economic activity has shrivelled and, at best, will continue at low levels for the foreseeable future while government borrowing to bail-out the banks will result in huge cuts in public sector spending in every area, whoever wins the next election.

It’s already beginning in at least 12 of the 50 states in America, and many more of its counties and cities. They have begun slashing services and forcing unpaid holidays on their employees as revenues from sales taxes, property taxes, investment income and service/building fees continue to plummet.

California's economy, the world's eighth largest, is expected to register a jobless rate near an agonising 13% next year. That state's attempt to reduce its massive $24 billion budget deficit includes three unpaid days a month for state workers to save $820 million. The unemployment figures leave out many of the illegal migrant workers from Mexico on whom the economy depended in the boom times. The loss of remittances is having a devastating impact on the families they left behind.

Michigan, home state of the bankrupt car industry in Detroit, has scheduled six days – a day a week- on which it won't pay about 37,400 employees to save $21.7 million by September 30.

The corporate-sponsored backlash against Barack Obama’s modest proposals for a state health insurance scheme in parallel with the existing for-profit schemes run by insurance companies are the palest of indicators of the political struggles to come.

Obama’s crisis also signifies that this is not the period when capitalism is prepared to grant reforms. Quite the reverse is true. For the mass of the world’s population there can be no acceptable solution to the deepening crisis without a wholesale transfer of productive resources to common ownership subject to democratic control.

Gerry Gold
Economics editor

Monday, August 17, 2009

Not worth dying for

So Gordon Brown says that British soldiers are on a “vital mission” in Afghanistan. That mission would appear to be about dying for no good reason, leading some relatives of dead soldiers to accuse the government of “having blood on its hands”. They are right.

It’s election week in Afghanistan, and president Hamid Karzai is relying on the American and British occupiers to allow the polls to take place. But these “elections” are like no others you may recognise. Karzai has a unique way of building support. Take the Shia minority, for example.

A bill allowing a husband to starve his wife if she refuses to have sex has just become law. The law governs family life for Afghanistan's Shias. It allows a man to withhold food from his wife if she refuses his sexual demands; a woman must get her husband's permission to work; and fathers and grandfathers are given exclusive custody of children.

Definitely not worth dying for.

Or the return yesterday evening to Kabul of warlord Gen. Abdul Rashid Dostum from exile in Turkey in an apparent attempt by Karzai to attract ethnic Uzbek voters. Dostum was responsible for the deaths of up to 2,000 Taliban prisoners early in the Afghan war. Karzai has now reinstated him as chief of staff of the armed forces,

Dostum's forces placed Taliban prisoners in sealed cargo containers and drove them for two days to Sheberghan Prison, suffocating them then burying them en masse, according to an American State Department report. US special operations troops were working alongside Dostum's troops at the time.

Definitely not worth dying for.

As to the electoral process itself, it is widely believed (just like in Iran) that the electoral commission is in league with Karzai. Reports suggest that as many as three million out of the electorate of 17.5 million have been fraudulently registered.

Definitely not worth dying for.

Then there’s the corruption. Money earmarked for schools and construction projects is usually diverted into the pockets of Karzai’s supporters. David Kilcullen, an incoming advisor to Gen. Stanley McChrystal, the top US commander in Afghanistan, admits contractors collude to rig the bidding process and sometimes murder competitors.

Definitely not worth dying for.

As the number of British dead swept past the 200 mark over the weekend, the father of a serviceman killed in Afghanistan accused the government of “ignoring the blood on its hands”.

Graham Knight, whose 25-year-old son Ben was killed in a Nimrod explosion in 2006, said:
“My son died because of failures by the MoD and yet still we are hearing that their kit is not good enough out there now.” He added: “As far as I can tell, it [the government] is ignoring the blood on its hands.”

Anthony Philippson, whose son James, 29, died after trying to fight the Taliban without night-vision goggles, said all 200 deaths were “effectively pointless”. He said the entire conflict had been based on “falsehoods”.

He is right. The war in Afghanistan is nothing to do with making “Britain’s streets safer”, as Brown claims, but everything to do with delusions of imperial grandeur. The more-or-less bankrupt British state can’t even afford to equip its soldiers properly, or look after them when they are wounded.

The Brown government is refighting the Afghan wars of the 19th century, which were part of the struggle with Russia for control of the region. The first Anglo-Afghan War of 1839-1842 ended with the destruction of the entire force of 20,000 British and Indian soldiers and the Afghans have hated foreign occupiers ever since.

Today, British soldiers are dying for the honour of New Labour and the corrupt Afghan government. It is a price not worth paying.

Paul Feldman
Communications editor

Friday, August 14, 2009

Seeing the wood for the trees

A row has broken out between Greenpeace Canada and other environmentalists, including those who run the website, over an agreement Greenpeace signed with paper products giant Kimberly-Clark.

Greenpeace hail the deal as a major breakthrough that will gradually reduce the cutting down of ancient forests to make toilet paper and tissues. The opposition denounce it as greenwash:

"Greenpeace Canada claims victory, falsely stating that clearfelling old forests for paper products is "sustainable" when this is FSC (Forest Stewardship Council) certified. [They] fail to grasp the ecological necessity of ending consumption of all products made from old forest destruction, and generally reducing consumption of all paper products."

Greenpeace Canada responds:

"We hope you understand that complete change does not happen overnight - neither for governments nor individuals, nor for multi-national corporations like Kimberly-Clark. But change has already taken place for the betterment of ancient forests under Kimberly-Clark's new policy. We are confident that change will continue to happen."

Kimberly-Clark is a major polluter with brands including Kleenex, Kotex toilet paper and Huggies disposable nappies. It operates in 80 countries and has just announced it expects earnings per share to rise from $4 to $4.25 this year.

Campaigners across the world reject the whole idea of giving global corporations certificates that permit them to go on clearing ancient forest. Governments in countries like Ghana are battling to keep big corporate loggers away from their virgin forests. And the rate of destruction goes on rising, in spite of FSC and other certification measures.

At the same time, communities across Canada relying on forestry and paper manufacture face disaster. The downturn in the world economy has reduced the demand for timber for the building trade and the development of web-based media has slashed demand for paper and newsprint.

Thousands of forestry and paper mill workers have lost their jobs. The Communications, Energy and Paperworkers Union of Canada points out that 300,000 Canadians directly earn their living from forestry, and three times that number rely on these industries indirectly.

This apparently insoluble contradiction – the need to halt logging as a key contribution to halting climate change; Greenpeace’s method of working inside the system to get whatever reforms they can out of governments and corporations; and the need for workers to earn a living – is the Gordian knot that human society needs to unpick.

None of the interconnected crises of climate, eco-system and species survival, or mass unemployment, can be resolved within the profit-driven capitalist status quo. Whether declaring themselves bankrupt or grabbing increased profits while they can, the corporations bring nothing but destruction and misery in their wake.

In the ancient myth, the Gordian knot is undone not by timid negotiation but by a bold stroke. And that’s what is needed now – a global ‘bold stroke’ by all those who want to protect the climate and the right of people to earn a decent living.

We must unite to bring about political change, to foster a new system of democracy where the majority can end the rule of profit. The urgent need is to reverse the destruction that corporate global capitalism has wrought. And there will be plenty of work for everyone achieving that turnaround.

Penny Cole
Environment Editor

Wednesday, August 12, 2009

Two years into the crisis and the human toll mounts

Two years ago this week, the global capitalist economy entered uncharted territory. It started with a crisis in the credit markets – the so-called “credit crunch” – and within a year it had led to a precipitate collapse in economic output in all sectors.

The collapse of inter-bank lending in August 2007 was bad enough to prompt senior, respected commentators to declare that “the system” – they only meant the unregulated system of institutions trading in credit-derived financial products – was broken beyond repair. These contagious sentiments expressed a mounting worldwide panic exemplified by the queues of customers outside Northern Rock in the middle of the following month.

Most of the attention then as now is focussed on the financial system. Attempts to prevent the financial crisis turning into a complete meltdown produced the second transformation in the role of the capitalist state since the 1970s.

The first transformation became known as globalisation. The irresistible need of capital for expansion resulted in transnational corporations dictating policy to national governments both directly and via global agencies like the International Monetary Fund and from 1995 the World Trade Organisation.

Lobbyists for corporate interests demanded that regulation and control on the movement of capital be eliminated for all practical purposes, accompanied by an assault on workers’ income and conditions. Civil war conditions were launched against British miners in 1984. The benchmark for wages was set by the transfer of much manufacturing to China where the rate was reduced to as little as a dollar a day. Profits soared.

A series of worsening crises from the mid-nineties onwards gave warning that the years of credit-led growth were reaching their limits and that overproduction was unsustainable. As we said in A House of Cards – from fantasy finance to global crash (free download) published in November 2007: “Then on 9 August 2007, the long period of corporate-driven globalisation of the world economy came to an abrupt end. That Thursday, major banks suddenly refused to lend to each other and a ‘credit crunch’ hardened the arteries of the global financial system.”

Losses from the financial crisis alone are colossal. Bank write-downs and losses currently total more than $1,500bn. The IMF has predicted losses across the financial services industry could eventually total $4,000bn, or nearly one-third the annual value of US production.

The effects on the real economy are more devastating. As the scale of the worsening crisis unfolds, millions more families are being driven from their repossessed homes, reclaimed by their owners, the banks and other mortgage lenders. Industry after industry is emulating the collapse of car-making worldwide because consumption has shrunk. Today will show that unemployment in the UK has soared to record levels, with young people making up more than a third of those without work.

This dramatic decline in the fortunes of capital changed the role of states once again, obliging them – those that aren’t yet bankrupt - and their central banks to launch a series of attempted rescue packages and the large-scale printing of money. The new bursts of credit designed to enable production to continue will have to repaid by as yet unborn generations of taxpayers, but the best that has been achieved is a temporary slowdown in the rate of deterioration.

The true cost of engineering a return to growth involves the elimination of not just failed banks, but huge swathes of no-longer, profitable credit-dependent factories, farms and software houses. Workers facing the consequences will find the cost too great to bear. The system – the capitalist system of production – is broken and the cost of fixing it would be counted not just in closed factories, but in the elimination of rights, of human lives and an inhospitable planet.

This is the moment to prepare the ground for a revolutionary transformation to a society where property is held in common and goods and services are produced to satisfy needs not profits, according to priorities determined through a new democratic process.

Gerry Gold
Economics editor

Monday, August 10, 2009

Rats desert sinking Parliamentary ship

When the MPs expenses scandal broke out like an ugly rash earlier this year, many cynics pooh-poohed it. Oh, we all knew that they were only in Parliament to line their own pockets, they scoffed.

Well, as so often, what first appeared as a bit of rottenness, turned out to be a much deeper and bigger decay. Scorn and contempt for Parliament is running at levels not seen since the late 18th century when painter William Hogarth satirised electoral corruption and Tom Paine, author of the Rights of Man, denounced the Rotten Boroughs, under which rich landowners could buy political influence.

But has the exposure of their greed made MPs contrite and willing to mend their ways, as party leaders would have us believe? No, quite the reverse, certainly for most New Labour MPs. Since it is apparent that New Labour could suffer a massive defeat in a possible spring 2010 election, backbench MPs are handing in their notice.

Yesterday’s Observer announced that 120 Labour MPs plan to resign at the next election. Some 63 have already told Brown that they will leave. Their reasons for leaving and their timing of their departures are due mainly to their desire to keep up their high earnings. One Labour MP is quoted as saying “I’m off. You can’t earn a decent living anymore. We’re going to have the most inexperienced parliament even after the elections with some big decisions to make. It is not somewhere I want to be. I want to earn some money.”

Denis MacShane, Labour MP for Rotherham, rightly warns that the mass exodus by MPs has a significance beyond rats leaving a sinking ship. In so far as Parliament has been a protected space and political forum where those who had any principles could speak freely, the upcoming implosion of Parliament will suit those he terms the “secret power holders in Britain – the media proprietors, the City and the permanent state bureaucrats, who have always believed the country would be better run if politicians did not get in the way.” In other words, when there is a severe crisis of democratic representation, the sinister forces of dictatorship shadows can seize the chance to the fore.

Is the answer to this crisis, the creation of another reformist organisation, reprising the formation of the Labour Party early in the 20th century? A number of left organisations and trade union leaders think so. Recently the Socialist Workers Party (SWP) issued a call for a discussion about “a single left alternative” to be formed “to represent working class interests at the next election”.

Behind-the-scenes discussions have been going on between the Socialist Party, the Communist Party of Britain, the leadership of the RMT rail union (who together recently created NO2EU), the SWP and Respect. The possibility of such an alliance deconstructing a system which has become little more than a façade for the interests of the global corporations and banks is pretty remote, however.

The inexorable drift, instead, of a faux "left unity" is towards a NO2EU Mark II on the back of Mark I, which stood in the recent Euro elections on a nationalist platform that counterposed British “democratic structures” to those of the European Union and hardly referred to the economic crisis at all.

The notion of a new “left” parliamentary party, comfortingly safe as it may seem, completely ignores the reasons for Parliament’s decline. The expenses scandal is the straw that is breaking the Parliamentary camel’s back, not some strange anomaly, but an indicator of the way in which economics and politics have been transformed in the decades of rampant globalisation, as A World to Win has analysed in its book, Unmasking the State

There is powerful symbolic context to MacShane’s warning about the dire consequences for democracy in yesterday’s Observer. Britain’s oldest Sunday newspaper – it was founded in 1791 – like parliamentary democracy itself, could be on its last legs. If it is forced to close, that will leave Murdoch and other right-wing media moguls to rule the roost, certainly on Sundays. It’s high time not to leave audacious political thinking to the far right but to set a course for a revolutionary transformation of politics and the state, thereby creating an enhanced democracy as well as defeating an incipient dictatorship. Anything less will simply reinforce a decaying status quo whatever the intentions.

Corinna Lotz
A World to Win secretary

Friday, August 07, 2009

Production, jobs and climate change: one story

Drax power station in Yorkshire, the UK’s largest single CO2 emitter and the site of the first-ever climate camp and numerous actions since, this week announced a fall in profits for the first quarter of 2009, due to a collapse in demand caused by the recession.

The power generator’s profits for the first quarter of 2009 were £34m against £150m in the same quarter last year. Demand overall for its electricity was down 6.1%, and most significantly, demand from industry was down 8.2%. Long closures and shorter working at car factories and companies making vehicle parts, was the major factor.

As climate campaigners in Scotland yesterday put out of action a conveyor belt that takes 100,000 tonnes of open cast coal from Glentaggart to power stations like Drax, this profit collapse is something worth thinking about.

It is an excellent example of how a reduction in production of goods, such as vehicles, reduces the need for power. It underlines that only a global transformation in the quantity, durability and materials content of the goods human society produces to meet its needs, can make an immediate reduction in global emissions of greenhouse gases.

However, as long as these reductions take place within the social context of capitalist enterprise, the impact of a cut in production is devastating for those workers who rely on these industries for a living.

Over the same period that Drax experienced its slump in demand, the number of people in work in the UK fell by 271,000, the biggest quarterly drop since comparable records began in 1971. Young people have been particularly hard hit, with the unemployment rate in the 18-24 age group reaching 16.6%, its highest point since 1993. The highest rate of unemployment is in the West Midlands, the UK’s manufacturing heartland, where 9.3% of people are now out of work.

However, new car sales rose this month, as a result of the government’s scrappage scheme. A total of 157,149 new cars were registered in July - an increase of 2.4% on the July 2008 figure, according to the Society of Motor Manufacturers and Traders (SMMT).

The government itself admits while the scheme MAY deliver a small reduction in emissions as a result of people buying more fuel efficient cars , the real purpose was to boost the car industry.

And it won’t reduce emissions. As a report from the Campaign for Integrated Transport explains: “Technical improvement in engine efficiency is vital, but it cannot meet the [government’s climate change] targets alone, not least because the fuel saving from more efficient vehicles will of itself lead to an offsetting increase in travel. It needs to be said quite simply that transport will not effectively contribute to carbon reduction unless the growth trends in private car use and air travel are changed....”

The reality is that we cannot unpick the economic devastation that capitalism is wreaking on people’s lives and livelihoods from its destruction of environment and eco-systems. They are an interconnected whole and need to be tackled in that way.

Workers who occupied the Vestas wind turbine plant in the Isle of Wight and car workers in South Korea who took over their plant and fought pitched battles to defend jobs, have everything in common though the products they make couldn’t be more different.

Both struggles raise the central issue of who owns and controls production. While these resources remain in the hands of shareholders who demand year-on-year profit increases, there are no real prospects of tackling climate change or the misery of mass unemployment.

Penny Cole
Environment editor

Wednesday, August 05, 2009

Occupations confront the state as crisis deepens

Hopes of a recovery in the health of the banking sector and the real economy look more like pipe dreams in the wake of worse than expected figures from Lloyds and Northern Rock. Both sets of losses reveal the impact of the deepening recession.

Financial institutions worldwide are now suffering the second wave of destruction of value since the crisis erupted in 2007. The first wave was triggered by the end of the credit-induced boom as consumers reached the limits of their ability to pay the interest on their mortgage debt. The most exposed to the pyramid of fantasy finance built upon sub-prime loans were the first to be hit and the result was the closure of the credit markets.

The vast sums poured into the financial sector by central banks and governments last year in an attempt at a globally co-ordinated programme to restart lending came to nothing. Rather than disappearing into a black hole as some said, the money has found its way into the gambling houses of the world’s soaring stock markets and is once again driving commodity prices up. These are the figures that are used to bolster belief in a recovery.

Lloyds’ losses of £4 billion are worse then the most pessimistic of expectations, partly as a result of its exposure to the sharp and continuing deterioration in the commercial property market. New Labour’s fabled asset protection insurance scheme designed to help banks by nationalising their losses and passing the cost to taxpayers has also come to nothing, as neither RBS nor Lloyds have fulfilled their promises to sign up.

As businesses fail, jobs are lost and unemployment soars no-one should be surprised that Northern Rock is suffering a greater exposure to mortgage payment default than the rest of the industry.

As the crisis deepens, corporate employers and the capitalist state that stands behind them must attempt to rescue their economic system and pursue a return to profitability by intensifying the elimination of excess capacity in the real economy. They will stop at nothing to achieve this aim.

Yesterday, Vestas, the Danish wind-turbine company won a court order for the bailiffs to end the workers’ occupation aimed at preventing closure of their factory on the Isle of Wight in the UK. Earlier in the day, in South Korea, police commandos descended from helicopters onto the roofs of the Ssangyong car assembly plant in Pyeongtaek, about 80 km south of the capital Seoul, to try and break the occupation by workers trying to protect their jobs. The police commandos stopped short of trying to storm the paint shop after fierce resistance from the workers inside, who were armed with metal pipes, firebombs and projectiles launched by catapults.

As the crisis deepens and workers are forced to fight for their livelihoods they will increasingly find themselves confronted by the capitalist state and its forces. In Britain, this takes the form of the courts, the police and bailiffs and the government. All are dedicated to upholding the legal right to private property – the basis of capitalist exploitation.

Now we must move beyond protest, turning our attention to composting the capitalist economic system and the state which defends it. In the end, “their” property has to become ours if we are to tackle the economic crisis in the interests of ordinary people and not the rich and powerful.

Gerry Gold
Economics editor

Monday, August 03, 2009

A meeting of minds in Tehran and Moscow

During the continuing street protests in Iran, in the wake of the disputed re-election of president Mahmoud Ahmadinejad, protesters have been heard shouting “Down with Russia”. This is not as strange as it seems. In fact, as the show trials get under way in Tehran, the slogan carries more historical significance than the marchers may know.

The Russian government was the first to congratulate Ahmadinejad on his “victory” in the 12 June elections. So denouncing Moscow makes sense. And the marchers also wanted to distinguish themselves from the usual “Down with America” slogans of state-orchestrated demonstrations in support of the regime.

Many of those on trial in Tehran have apparently “confessed” to "acting against national security" and "conspiring with foreign powers to stage a velvet revolution". Opposition leaders have denounced the torturing of those arrested and the staging of a mass trial where the defendants have few if any legal rights.

The historical connection with Russia, of course, is the most infamous show trials of modern times, which were held in Moscow between 1936-8. The principal leaders of the 1917 Revolution similarly “confessed” to working with and for “foreign powers” and were executed. Senior generals in the Red Army were tried in secret and also shot.

Only a half a century later, in 1988, during the perestroika and glasnost period inaugurated by Mikhail Gorbachev, were the Old Bolsheviks officially rehabilitated. However, Russian is once more rewriting its history to present the Stalinist period, including the notorious trials, in a more “favourable light”.

On 19 June, Russia’s largest online history resource at was shut down by the home affairs ministry in St Petersburg. Founder Vyacheslav Rumyantsev said the closure followed after an article criticised the city’s governor for cutting an allowance given to survivors of the Nazi siege of Leningrad.

In December, police in St Petersburg raided the human rights organisation Memorial, removing much of the material used by Orland Figes in The Whisperers, his book on family life under Stalin. It included interviews with gulag victims, photos and personal testimonies.

The attack on the website comes in the wake of the publication of school textbooks that now portray Stalin not as a mass murderer but as a great national leader and an "efficient manager" who defeated the Nazis and industrialised a backward Soviet Union. In May, president Dmitry Medvedev announced he was setting up a new body to counter the "falsification of history", which, naturally, actually means the opposite.

The commission will be dominated by members of Russia's FSB intelligence service rather than professional historians. Its first job is to counter interprations of the 70th anniversary of the August 1939 Nazi-Soviet pact, under which Hitler and Stalin agreed to carve up Europe, with Moscow annexing the Baltics and two-thirds of Poland.

As a taster of the “new history” to come, this month Russia's defence ministry posted a lengthy article on its website claiming that Poland provoked the Second World War! The article said Poland refused to yield to Germany's "modest" ultimatum demands in 1939 for a land corridor to East Prussia and Gdansk. The ministry withdrew it after Poland protested to Russia's ambassador in Warsaw.

Meanwhile, on Saturday, Mohammad-Ali Abtahi, a former vice-president arrested for protesting against Ahmadinejad, reportedly testified in Tehran that now he understood that the vote was "clean" and that allegations of fraud in the election were "a lie". No doubt there is quiet approval for all this in the Kremlin, where the rehabilitation of Stalin is proceeding apace, in a country where anti-government demonstrations are usually banned and where investigative journalists are gunned down.

Paul Feldman
Communications editor