Tuesday, November 30, 2010

The truth behind secret diplomacy

For all Washington’s outrage at Wikileak’s publication of hundreds of thousands of hitherto secret diplomatic cables from America’s embassies around the world, they confirm much that was already known.

Who doubted that the United States has ever-so cosy relations with Israel at the expense of the Palestinians and that none of the cables published so far mention the continuing suffering in Gaza resulting from the vice-like blockade?
Or that the US spies on the United Nations?

The tittle-tattle gossip about various world leaders says more about the low level of “analysis” made by US embassy staff than anything else. No wonder the United States has been way behind just about every major international change in recent decades.

They were sleeping when the Shah of Iran was overthrown by a popular uprising in 1979 and failed to detect the changes in the Soviet Union in the early 1980s. More recently, the absence of a coherent analysis left the United States vulnerable to the attack on the twin towers in 2001. Ironically, the latest Wikileaks releases were made possible by Washington’s decision after the 9.11 failure to pull together in digital form all diplomatic communications from its embassies and link them to the Pentagon.

Clearly there are insiders in the US State Department who believe that the public has a right to know about these cables. And they are correct. You may ask: what has secret diplomacy ever done for us? Behind closed doors, diplomats and states have prepared for war, using pretexts where necessary (before the 2003 invasion of Iraq, for example) and signed away the rights of smaller nations (Yalta and Potsdam at the end of World War II).

Diplomats, it is said, are sent abroad to lie for their countries. The real truth about American foreign policy will never appear in these kinds of cables. For example, to what extent is Washington involved in the current round of assassination of Iranian nuclear scientists?

Two scientists have been killed this year and others injured in highly-sophisticated attacks that have all the hallmarks of Mossad-CIA operations. These will be “deniable” attacks possibly carried out by third parties on behalf of Israel and the US. Perhaps they are the alternative to the full-scale military attack that King Abdullah of Saudi Arabia and others are demanding or the prelude.

The cables will certainly not reveal the illegal policy of systematic assassination of suspected Taliban and Al-Qaeda personnel in the Afghan-Pakistan border area. These are carried out by unmanned drones and have resulted in “collateral damage”, including the deaths of many innocent women and children.

Nevertheless, the publication of the cables has wrong-footed Washington, in particular secretary of state Hillary Clinton. That can be no bad thing. You have to admire the courage of Wikileaks founder Julian Assange. He is victim of a Swedish state frame-up and some US politicians want Wikileaks categorised as a “terrorist” website.

It is fitting that Ecuador has offered Assange "unconditional" residency in the country. Deputy Foreign Minister Kintto Lucas praised people like Assange "who are constantly investigating and trying to get light out of the dark corners of information". In the 1970s, Ecuador was destabilised by the CIA and a brutal military junta ruled until 1979. In September this year, President Rafael Correa was held hostage during an attempted coup d’état. No prizes for guessing who Ecuador’s politicians held responsible.

Paul Feldman
Communications editor

Monday, November 29, 2010

Resistance must go beyond opposition

The question of how to stop the Con-Dem government’s programme of cuts lay on the table, but remained unresolved at the massively attended Coalition of Resistance conference in London on Saturday.

Around 1,300 people from around the country thronged in and out of the overflowing conference hall to hear dozens of speakers in different parts of the building and nearby halls.

The opening plenary featured school students and heard the newly-elected UNITE leader Len McCluskey leader of Britain’s biggest trade union. McCluskey pointedly ignored calls by Bob Crow of the transport union RMT and Mark Serwotka of the PCS civil service union, who spoke in favour of co-ordinated strikes.

Earlier last week, McCluskey breathed fiery words calling for "an alliance of resistance" he claimed would “rock the establishment” and force the Con-Dem government to step back from its plans to "decimate the very fabric of the welfare state".
But, adhering to the Coalition of Resistance’s founding statement, which talks only of general “opposition” to cuts, the notion of taking effective action to disrupt the state’s plans, was not part of his script.

CoR co-founder former NATFHE General Secretary Paul Mackney said it was in transition from being a pressure group to becoming a mass movement. Its success, he said, will be measured not by “programmatic elegance but by the breadth of the movement” – implying that united action was everything and clarity of purpose unimportant.

There were a few references to the raging crisis in Ireland which brought together EU finance ministers in an emergency summit in Brussels yesterday. But in practice, participants struggled to go beyond the low-levels aims set out in the CoR’s founding documents. From the platform, there was a studious avoidance of using the “capitalism” and “crisis” in the same sentence.

In the “analysing the crisis” debate, a wide range of people discussed the nature of the crisis: was it only financial, was it deeper, was it systemic? Keynesian and Old Labour solutions such as increased state spending, more taxation flew thick and fast as did proposals for various levels of protest up to and including General Strike. Film maker Ken Loach, who denounced the trade union leaders and Ed Miliband, was one of the few to point out that there was a crisis of the capitalist system that could not be remedied by policies such as “taxing the rich”.

A group of campaigners from North East England put forward a resolution proposing a “representative structure based on democratically elected representatives from local/regional groups”. In the event, the 120 people were nominated to a national committee due to meet in the coming weeks.

The big turnout and open spirit of the conference, despite its generally limited politics, shows a huge willingness to build a united movement against the government. The ongoing campaign by school students, some of whom will be picketing with rail and tube workers in London today and rallying in Trafalgar Square tomorrow, shows the enormous determination of a new generation not to cave in and to take their struggle to the wire.

They, and millions of working class people who are being offered only mealy-mouthed words by their leaders, are owed a lot more than patronising support. They deserve a real explanation of the crisis and a way out of it that can mount a serious challenge to the bankrupt capitalist system.

The raging debt crisis in Ireland, which on Saturday saw 50,000 people on the streets of Dublin on a bitterly cold day, with their leaders calling for a “campaign of civil disobedience”, was up against the fact that the mainstream opposition parties are signed up to the same cuts as the discredited Fianna Fail-Green government.

Struggles around Europe – from Portugal to Ireland, from students to public sector workers – are up against the same brick wall. The strategy of taking the struggle against the cuts forward to the formation of People’s Assemblies that can become the vehicle for transforming economic and political relations, is the red-hot issue of the day. Come to the December 11 event and start to go beyond resistance.

Corinna Lotz
A World to Win secretary

Friday, November 26, 2010

Game over as the Met's mask slips

Just in case any student still thinks that the police’s role ought to be to facilitate protests and demonstrations, the commissioner of the Met, Sir Paul Stephenson, has put them right. As they showed in London on Wednesday, the police as a state force have other loyalties.

They kept a mainly teenage, mostly peaceful group of protesters against the rise in tuition fees hemmed in between police lines for over nine hours in the freezing cold. This was after a police van was conveniently left isolated and promptly vandalised.

Stephenson defended the notorious “kettling” operation, describing the area as a “crime scene”. What rubbish! The police on the ground were under orders from Scotland Yard and no doubt the Home Office. The clear objective was to demoralise the school and university students by denying them the right to move through the streets.

Michael Chessum, a co-founder of the National Campaign Against Fees and Cuts, was right when he commented: "It is the kind of policing we saw on Wednesday that creates disorder. If you refuse to allow people, many of them young, first-time protesters, the right to walk down the streets of their own capital city, and then 'kettle' them in Whitehall for eight or nine hours, people are going to get frustrated."

As Jenny Jones, a Green Party representative on the Metropolitan Police Authority which questioned Stephenson, pointed out, the effect had been to “imprison thousands of people”, adding: "You kept people for nine-and-a-half hours. You punished innocent people for going on a protest. How can that be right? I just do not see it."

Stephenson does not have to account for tactics to the MPA and he told – or rather warned – the authority that the “game has changed and we must act”. In recent years the Met had reduced the numbers of officers deployed to tackle demonstrations, he said. "Regrettably, we are going to have to review that. We are going to have to take a more cautious approach."

The Met chief’s statement is a clear indication that the police are preparing to suppress mass civil disorder which is an expression of the anger that the spending cuts and the consequent rise in tuition fees – have already provoked and which is bound to intensify.

In practice, is not that the “game” has changed but that the mask has slipped. How the police like to portray themselves and the reality of their actual role in the power structures of the state is usually obscured by anodyne statements like “serving the community” and “protecting the public”.

But when push comes to shove, when resistance to government’s policies strays beyond marching from point A to point B or signing petitions and actually expresses social frustration and anger, the role of the police is solely to protect the state. Before most of today’s student marchers were born, the police showed their loyalty by brutally attacking pickets and communities during the 1984-5 miners’ strike for jobs.

So this not some “neutral” state that is just a little too skewed towards big business and property, which can be redirected to serve a more progressive purpose. The modern state evolved alongside and in response to the needs of capitalism and is geared in every way to sustaining and developing the profit system. So when, for example, the financial markets insist on spending cuts, the state – and its political expression in the form of the government – jumps to attention.

A strategy for resisting the cuts and the rise in tuition fees must, therefore, incorporate the vision of creating new democratic social and political structures, building on the ideas like People’s Assemblies. Then the game of capitalist rule will really be over.

Paul Feldman
Communications editor

Wednesday, November 24, 2010

The 'nether world' of capitalism

The propaganda that accompanies the cutting, slashing and burning of government spending is all about “securing the fragile recovery”. It is used in every country from Iceland, Greece, Ireland, Spain, to the US and Britain - to justify what in effect adds up to crashing the economy.

But don’t get the idea that anything else can be done within the capitalist framework. After decades of credit-led expansion the logic of capital now demands its opposite – ruthless contraction. It turns public pronouncements into lies, and politics inside out. Ireland’s government won’t be the last to find itself in trouble.

The economic trajectory of country after country, region after region confirms that the slide from recession to depression. The Organisation for Economic Co-operation and Development last week cut its forecast of UK economic growth in 2011 from 2.5% to 1.7%. The Institute of Directors is forecasting UK growth of 1.2% next year. In real terms, these figures represent a decline in activity.

The eurozone, having pumped billions of euros into recovery measures, achieved relatively strong second-quarter growth of 1% to the surprise of the markets. But the “recovery” was short-lived. Despite the export of capital goods from Germany to China, growth slowed to 0.4% in the third quarter. Euro zone unemployment rose to 10.1% in September and it is forecast to go higher next year. In the United States, another round of “quantitative easing” – aka printing money – is under way in an increasingly desperate bid to boost economic activity.

The World Bank predicts that China’s growth will slow in 2011 from attempts to constrain the country’s uncontrollable credit boom. Lending by its vast, unregulated underground financial market is sending the prices of staple foods soaring and triggering social unrest. The average price of 18 staple vegetables is 62% higher than a year ago.

Inflation is eating away at incomes not only in China. Commodity speculators have driven up the price of food worldwide, while transport and energy prices in Britain are set to soar. The inexorable fall in consumer spending power – VAT is going up to 20% in January – can only deepen the contraction.

Desperate times lead to panic measures, as the so-called rescue plan for Ireland’s bankrupt banks shows. Ireland, however, is only an extreme example of the rotten core of the global financial system, which has been on state life support since 2008. All the talk of the dangers of “contagion” and the threat to the euro itself indicates that another crisis-point has been reached.

We are not the first to analyse the destructive side of capitalism. In 1848, Marx and Engels wrote in their Communist Manifesto: “Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells … In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed."

No amount of counter-propaganda against spending cuts can halt the inexorable contraction of the global economy. Avoiding the consequences means that the system must be replaced as a matter of urgency. Today’s general strike in Portugal against budget cuts and student actions in Britain against soaring tuition fees are only flashes of the struggles ahead. Going beyond resistance to putting an end to capitalism is the real challenge.

Gerry Gold
Economics editor

Tuesday, November 23, 2010

A new Irish sovereignty

“Instead of drums and trumpets, our little apocalypse was played out against the background noise of the Taoiseach and the Minister for Finance murmuring evasive and mechanical denials.”

Thus writer Fintan O’Toole, in the Irish Times on Ireland’s bail-out by the International Monetary Fund and the British government.

The 94 years that have gone by since Ireland’s legendary Easter Uprising against British imperial rule seem to have come full circle. Yesterday Chancellor George Osborne announced that the British government was offering Ireland a £7bn loan in addition to the £77bn being offered by the European Union.

A sorry end indeed to the symbolic significance of the Irish Free State as a plucky David to Britain’s Goliath. That state, for all its betrayals, came into being following the martyrdom of many hundreds of heroic fighters. O’Toole points to the sense of a “historic threshold being crossed” in the psyche of the Irish.

The IMF-EU-British bail-out pulls away the façade of sovereignty that has provided a legitimacy –however threadbare – for Fianna Fáil and Fine Gael, the political elites who have ruled the Irish Republic since the end of the civil war in 1923.
But the truth is that the Irish state lost sovereignty to its own banks and speculators a long time ago. And by reducing its corporation tax to 12.5%, they already handed over control to the corporations in the mid-1990s, just as they are now doing to the IMF and EU.

Taoiseach Brian Cowen and his Minister for Finance Brian Lenihan are presently using the word “sovereign” in a new sense. In the past, as O’Toole notes ironically, “The Sovereign” used referred to the British monarch, “and as such it touched the rawest of nerves in nationalist Ireland. As the two Brians used it this week, though, the phrase is market-speak for ‘sovereign debt’.”

“There is nothing abstract”, O’Toole says, “in the sudden reality of officials from the EU and the IMF poring over the books in Merrion Street and the prospect of all big decisions on Government spending and taxation having to be approved by those same bodies for years to come. A simple rule of thumb for a sovereign state is that it – and it alone – makes its own decisions about taxation and spending. For the foreseeable future, Irish governments will not pass this test.”

But it is not only Ireland that is being humiliated by the arrival of the IMF-EU financial police. Greece has already had the visit and the “contagion” also threatens Spain and Portugal as Jean Claude Juncker, Luxembourg’s prime minister and chairman of the eurozone finance ministers’ group, warned yesterday. And the European Union is already interfering with the Irish government’s decision to hold a snap election in December.

Chancellor George Osborne claims that Britain helping Ireland because it is ‘a friend in need’. In reality, though, smaller states are being swallowed up by larger states, themselves subject to the global financial system. This is not the reimposition of “direct rule” or the old British imperialism. Neither is it the British government bailing out the Irish government. It is in fact a loan by the British government to British commercial banks, who hold £140 billion worth of outstanding Irish debt in business and property loans. RBS says it will have about £10 billion in "impaired" Irish loans next year. Lloyds is expected to write off more than £1.6 billion. And the bottom line is that the taxpayer is once again bailing out the banking system.

The new overlords are the global financial institutions to which even the most powerful governments and states are increasingly subject. So much for the notion of the “sovereignty of the people”, which was the aspiration, not only of the Easter Uprising of 1916, but the democratic idea behind national independence in general.
Dublin satirist Morgan C Jones, one-sixth of the Emergency acting group, is calling for a citizens’ protest outside the government’s Leinster House with placards saying “You’re fired”. He’s right – the days of governments in thrall to the financial markets are numbered. Regaining sovereignty – in other words, the self-determination of people over their own destiny – is only possible by developing alternative economic and financial ownership and control.

A World to Win’s new booklet, Beyond Resistance, published online today, through its analysis of the crisis, offers real ways forward to achieving real sovereignty.

Corinna Lotz
A World to Win secretary

Monday, November 22, 2010

Miliband's New Labour Mark II

There are some in and around the Labour Party who believe – or perhaps imagine – that the election of Ed Miliband opens up the prospect of a qualitative break from the Blair-Brown years. After reading his first major interview as party leader, you have to say they couldn’t be further from the truth.

New Labour Mark I may be over but watch out for New Labour Mark II, is Miliband’s essential message. In his interview with The Guardian today, Miliband talks about going “beyond New Labour” without ever repudiating the way his predecessors transformed the party into a cheerleader for market and corporate-driven globalisation.

In fact, Miliband praises much of what New Labour did, saying: “Don't knock it, because it achieved a lot, like the rebuilding of the public realm, tackling poverty.” He omitted to mention the downsides like increased inequality and encouraging an economy dominated by finance capitalism, which contributed to the 2008 meltdown.

Although Miliband claims he is starting with a “blank sheet” in terms of policy, it is clear what direction he wants the party to travel in. Sounding not unlike David Camerons’ New Tories, Miliband says the main task is to examine "how you can create greater social justice in the economy without having to rely only on redistribution and the welfare state.”

What does this actually mean, you may ask? This is Miliband saying that the idea of using the state to redistribute wealth is over. No doubt one reason is that the state no longer has the money to pay for things like tax credits, which were a feature of Brown’s policies. And his criticism of the welfare state uncannily echoes Cameron’s attack on “welfare dependency”, which is behind the Coalition’s plans to dismantle what is a safety net for millions of people in terms of housing and benefits.

Miliband explains: “"However, I think it's very clear that as we are reformers of the market – we should also need to be reformers of the state. I don't consider myself a sort of statist. The top-down idea of the state is as much of a problem as an idealised view of the market and in a way they have their similarities. Both treat people not as people but as kind of objects."

So how is the aim of “social justice” to be achieved? If it’s not through the state, then it can only be via capitalist markets and corporations. There Is No Alternative – within our present political and economic framework, that is. What Miliband is burying is a central principle of what was Old Labour in order to come to terms with the financial crisis that broke in 2008 and that shows every sign of exploding once more.

And that means cutting the budget deficit. Miliband may disagree with the Tories’ rate of attrition, but admits that Labour would be making deep cuts in spending if they’d won the election. In fact, Labour is already preparing to make massive cuts at local council level, from Manchester to Lambeth, and at town halls across Scotland and Wales.

Labour councillors say they have no choice because the instructions to cut are coming from Whitehall and, by law, they have to make a balanced budget. In other words, they are just carrying out orders. That’s never been an acceptable excuse at any time in history. But for Labourite councillors and leaders, it’s all water off a duck’s back.

Paul Feldman
Communications editor

Friday, November 19, 2010

Ireland and Britain in the same boat

You would be wrong if you thought that Ireland’s banking and budget crisis that has all but overwhelmed the country’s government, couldn’t repeat itself in Britain. In fact, the two countries’ fates are inextricably linked.

Ireland’s banks are essentially insolvent. They don’t have the money to cover the write-offs of loans to property developers that have gone sour. And the Irish government doesn’t have the money to bail them out. That’s why Dublin has had to bite the bullet and go cap in hand to the European Central Bank (ECB) and the International Monetary Fund (IMF).

The price to be exacted for a bail-out is destined to fall on the backs of Ireland’s workers. Public sector workers have already had their wages reduced by 15%. Further cuts are planned, along with tax rises and a reduction in the minimum wage, plunging the economy into even deeper crisis.

British banks have a massive exposure to debt-ridden Ireland. According to the latest figures, their total lending to Irish households and companies totals a mammoth £140 billion. The Royal Bank of Scotland, which is largely owned by the British taxpayer, is the most exposed at £54.4 billion, a third of which is residential mortgages.

Clearly, British banks are going to have go whistle for most of these loans, which explains why coalition chancellor George Osborne is so keen to lend Ireland billions (which would have to be borrowed as the British exchequer’s coffers are largely empty too).

It gets worse.

British banks, like their Irish counterparts, are also insolvent, despite commitments from the state amounting to £1.2 trillion following the global financial meltdown of 2008. A recent report by the New Economics Foundation, Where did our money go? warns:

“Based on Bank of England data, banks now appear to face a funding cliff. In order to maintain existing levels of activity they currently have to borrow £12 billion a month; the projections we reproduce in this report indicate that in 2011 they will have to borrow £25 billion a month. We believe the public sector is likely, once again, to be asked to bail out the banks for the emerging funding gap.”

Other analysts suggest that British banks will require another £1 trillion in 2011 as existing loans mature and need refinancing. There is no way that the Lib-Con coalition can stump up this kind of money, despite the savage cuts in public expenditure planned for the next four years. The banking system all but failed in 2008 – it may well do this time around.

Those who still insist that the crisis is largely “ideological” had better wise up. There is an objective, evolving global crisis of the capitalist economic and financial system. It is having a direct impact on governments, tearing them apart as in Ireland or rendering them helpless and ineffective as in Washington.

The bail-outs of 2008 only postponed matters. Mountainous debts and valueless securitised assets dominate the balance sheets of the banks. As the IMF-ECB team will insist in Ireland, those who work, add value and are the source of profits will be told they have to sacrifice their living standards and futures so the bankers can survive for another day.

Quite simply, it’s a price not worth paying. A revolutionary reorganisation of society on both sides of the Irish Sea, restarting the financial system on a new, co-operative basis, is rapidly becoming the only practical alternative

Paul Feldman
Communications editor

Thursday, November 18, 2010

Extreme weather is all about climate change

This week serious floods in Cornwall, and in September, floods in Ayrshire and Aberdeenshire. Last year, unprecedented rains and flooding in Cumbria; in 2008 Wales and the Midlands; in 2007 Humber, Yorkshire and Gloucestershire and in 2006, Norfolk and Suffolk. Extreme rain and flooding are becoming more frequent events in the UK.

The floods come as one of the climate change deniers’ key myths has been exploded by a report by US and British meteorologists. It confirms that not only is the earth’s surface warming, but the troposphere – the area where weather happens – is warming too.

This is entirely in line with climate science predictions of what happens as greenhouse gases build up in the upper atmosphere. And it means more extreme weather – both drought and floods – and not in the future, but now.

This year, terrible floods in Pakistan affected 15 million people, 300,000 homes were destroyed or damaged and two million left homeless. Public infrastructure of health, education, governance, roads and rail were destroyed in some areas.

There have also been heat waves and wildfires in Russia and Ukraine. Ten million people are currently facing starvation in Chad and Niger after years of drought followed by flash floods. More than a thousand people were killed in landslides triggered by torrential rain in China’s Gansu province. Deforestation, reckless development and political neglect all play a part in these tragedies, but the weather is the major cause.

This year’s hurricane season brought 19 major storms to Mexico and Central America. Weeks of heavy rains triggered landslides in Central America, killing hundreds of people and destroying infrastructure. In Mexico, swollen rivers washed away fields and coastal towns were submerged when tropical storms surged ashore. This wet weather followed a year of severe drought, with the lowest rainfall in 68 years. Cattle and crops all died in some of the driest parts of Mexico.

“This is our new life with climate change," said Gabino Cue, governor of Mexico's southern state of Oaxaca. One of Mexico's poorest states, it faces a $163-million bill for repairing roads, bridges and public buildings damaged by the floods. The cost of extreme weather to Latin America and the Caribbean could equal 137 percent of the region's current economic output by 2100, according to a United Nations report.

So when officials gather in Cancun later this month to try to negotiate a follow-on treaty to the Kyoto Protocol, the evidence of the impact of climate change will be all around them. Climate change models show the situation can only get worse as temperatures rise.

In spite of all that, the officials are not planning to sign any agreement, and people across the globe will pay the price. The sole result of the last round of climate talks in Copenhagen was a commitment to funding for climate change mitigation in the form of aid from richer to poorer countries. In advance of the Cancun meeting, the European Union published claims to have fulfilled a pledge of 2.2 billion euros ($3 billion) to be delivered on a ‘fast track’. But Oxfam challenges this, suggesting that money from existing pledges is simply being rebranded.

The whole UN process, which started with high hopes of success in 1992, has become a process specifically aimed at avoiding action and channelling people’s anger and fears into a bureaucratic dead end. To escape this impasse we need an urgent action plan for climate change, thinking globally and acting locally. For example, People’s Assemblies in flood-affected areas would plan to mitigate the effects. In Britain, they would reverse the government cuts in spending on flood defences which has been reduced from £335m a year to £261m a year for the next four years.

Penny Cole
Environment editor

Wednesday, November 17, 2010

Royal wedding cannot hide suffering in Wales

It can’t be a coincidence that the announcement of the engagement of Prince William – “Baby Wales” as his mother called him - to Kate Middleton, after a ten-year relationship, is made on the day before the Wales Assembly Government reveals its budget cuts.

No doubt the months of preparation for the wedding are aimed at taking people’s minds off what’s happening in the real world of ordinary people’s lives. But it won’t do anything to lessen the impact of the deepening global crisis on the people of this small country.

As the people of Wales braced themselves for a savage assault on jobs, public services and living standards hundreds of thousands are already drowning in debt. Over 38,000 sought help from Citizens Advice Bureaux in the last year – an increase of 20% over the previous year. Rent arrears to landlords are up 88%, and 42% to housing associations. People with arrears in their water rates have increased to 59% and cases involving private bailiffs are up 88%.

Like many others, Kate – not the would be-princess but a young mother who was desperate to buy Christmas presents for her children – felt her only option was to approach an illegal money lender. Operating on estates across the country, they charge interest rates as high as 5,000% and extract payments using threats and intimidation.

Fear of the consequences of failing to make a payment meant that household bills went unpaid and there was no money left to feed the children. Kate said: "Everything runs round in your head - are they going to burn my house down? Am I going to end up getting murdered over this? It was a constant worry, every single day."

She has joined the 14,000 people in Wales in the last year granted a debt relief order - a form of insolvency for people that have a certain amount of debt, little disposable income and few assets. Shelter Cymru is warning that for many poorer families, things will get a lot worse as the recession deepens.

Dave Sheridan, a senior debt specialist at the charity, said: "With the changes that are coming, I think we're in for a major storm. Things are going to get a lot worse - at the moment it's only the tip of the iceberg. It's difficult for agencies to provide face to face advice to meet demand as it stands, let alone with the cuts coming down the line."

Across the water in Ireland, as the government tries to negotiate it way out of state bankruptcy, a gang of legalised loan sharks from the European Union and International Monetary Fund officials will visit Ireland for a “short and focused discussion” on the country’s debt crisis, in advance of its budget announcement on December 7. They are desperately trying to prevent Ireland’s incipient bankruptcy spreading to Portugal, Greece and Spain, which would almost certainly end the euro’s viability as a trading currency.

Like their counterparts across the world, the EU-IMF group’s mission is to ensure that everything possible is done to ensure that payments on the debt’s incurred in rescuing the banks are extracted from ordinary people. These relentless attacks can’t be allowed to continue.

Detailed plans of action and support are needed to occupy and defend all places of work at the first suggestion that they may be slimmed down or closed. Empty houses, like the brand new ghost estates in Ireland, should be taken over and occupied by homeless families and individuals. Communities in Wales, England, Scotland and Ireland have to unite in People’s Assemblies and start the struggle to terminate a system that heaps misery upon misery on the backs of ordinary people.

Gerry Gold
Economics editor

Tuesday, November 16, 2010

Haitian people fighting back

Haiti is usually depicted as the archetypal impoverished underdog – never as a fighting republic with a proud revolutionary history. Earthquakes and disease make the news but not the self-organisation of the Haitian people and their struggle for political independence.

It is in this light that we must view the present explosive cocktail of disease and political tension which is once again rocking Haiti. The killing of a demonstrator by UN forces yesterday results precisely from the fact that a combination of charitable donations and big power political interference can resolve nothing.

On the contrary, imposing “solutions” from outside has only worsened things for the 10.1 million inhabitants of the island. Haiti has in no way recovered from the January 12 earthquake which killed around a quarter of a million people, out of a total population of around 10 million.

The immediate cause of the street clashes aimed not only at the UN troops but also local police stations is the rising death toll from cholera – now approaching 1,000. Some locals blamed Nepalese forces who form part of the multinational UN occupation for introducing cholera and vented their anger against them.

The UN has appealed for $164m (£102m) in emergency funds in a desperate effort to prevent the lethal disease from spreading beyond the capital Port au Prince to the 1.1 million people who still live in camps. Less than 40% of the aid pledged internationally for the past year has in fact reached the country, while US aid is still due to arrive, seven months after it was promised.

On the ground, investigative writer Georgianne Nienaber quotes social networking sites:

“Chatter on Twitter and Google paints a picture of a totally broken health care system, and demonstrates malfeasance in planning for an epidemic …Here is a World Share report from Twitter: Cholera now hits the island of La Gonave, Haiti. The only functioning hospital on the island is filled to capacity. There is insufficient medical staff to treat those affected. Newborn babies and their mothers are dying.

“Here is another from a Google Group: The situation at the other Limbe hospital (Government hospital St. Jean) was worse. We brought a patient there only to discover a huge tent and no one attending a building full of patients. There was no doctor or nurse present, dry IV bags, and when we asked how a doctor could be reached no one really knew. Staff have been overwhelmed and they are looking for nurses. I think that things are not great at the hospital (St. Michel) or at the gymnasium where they are putting the suspect cholera cases. I had thought that MSF [Doctors Without Borders] was all set up, but they still won't be for a couple of days apparently.”

The street clashes are taking place in the run-up to the November 28 elections. On November 1 there was a massive demonstration organised by the Fanmi Lavalas party through the streets of the capital, Port au Prince. Tens of thousands called for the return of forcibly exiled President and Lavalas leader Jean Bertrand Aristide to the island, currently living in South Africa.

As pro-Lavalas writer Randall White says: “The picture of a meaningful, healthy and politically engaged Haitian popular movement is a picture rarely painted outside of Haiti. In fact, it the greatest resource that Haiti has today, its people. Disrupting, diminishing and destroying this movement has been the primary objective of the power elite in Haiti and Washington D.C.”

The forthcoming election is raising expectations amongst Haitians for an alternative to the corrupt elites and those backed by corporate interests who currently hold sway. The need for an alternative to these is more urgent than ever before.

Corinna Lotz
A World to Win secretary

Monday, November 15, 2010

The state prepares for a showdown

Rank-and-file students and their national leaders are travelling in opposite directions. At college and university level, students are preparing for further action against soaring tuition fees. At national level, the Labour-led leadership of the National Union of Students (NUS) is heading for the hills.

Behind the rhetoric of a “decapitating” Lib Dem MPs, the NUS is actually trying to behead the spontaneous movement that erupted on London’s streets last week. The NUS wants to direct student energy towards – wait for it – collecting signatures with the aim of making Lib Dem MPs face by-elections!

This is not so much a strategy as a travesty. The proposed law about recalling MPs is not even published yet and it will simply be restricted to issues of corruption like expenses fraud. Meanwhile, the majority party in the Coalition, Cameron’s Tories, are simply let off the hook.

The aim of NUS president and aspiring Labour MP Aaron Porter is to postpone, hinder, divert and fragment a growing social movement against the Coalition government. Simply marching from point A to point B with the aim of winning over “public opinion” won’t bring about change and frustration with a failed political process exploded at Millbank. Naturally, Porter – who is not opposed to tuition fees in principle – condemned as “despicable” the students who went on to attack the Tory Party HQ.

The reality is that the struggle against the Coalition’s massive spending cuts, which are driven by a deepening global debt crisis (with Ireland this morning on the verge of bankruptcy), cannot be contained within “normal” boundaries of protests and one-off strikes. And the state is conscious of this and will learn from the police’s obvious unpreparedness for the size and anger of last week’s march.

According to the Observer, defence firms are working closely with the government on a "militarisation" strategy to meet mass resistance to the impact of the cuts. Firms are apparently in negotiation over possible orders for armoured vehicles, body scanners and surveillance equipment. Scotland Yard's National Public Order Intelligence Unit and other state bodies are said to be stepping up monitoring of left-wing groups.

So while the NUS and the leaders of the major trade unions in Britain sit around in la-la land, the state, as always, is getting tooled up. This has to be the case because, ultimately, the emerging struggles revolve around and are decided by the central question of state power – who wields it and for what purpose.
The present capitalist state will everything and anything to sustain the very system upon which it rests. If that requires massive spending cuts and propping up failed banks, that is precisely what it will do. If that obliges the state to bring out the iron first, it won’t hesitate.

In these unprecedented times, where existing political processes are reduced to a cul-de-sac against a background of insoluble economic crisis, direct action and extreme forms of protest will in themselves not be enough to defeat the Coalition and the state. Students, however, having taken the lead in the struggle against Cameron-Clegg, are in a position to inspire a significant shift.

They could achieve that by going outside of their campuses to the local communities and workplaces with an appeal to create People’s Assemblies. These could become a democratic alternative to a failed undemocratic political system. A network of People’s Assemblies will have the capacity to facilitate a transition to a society based on co-operation and self-determination instead of profit and corporate power. Then we could repudiate the state’s debts to the banks and create an education system free for all.

Paul Feldman
Communications editor

Thursday, November 11, 2010

Students come up against a political brick wall

The explosion of anger on London’s streets yesterday was not confined just to the students who attacked the Tory Party HQ. It was also expressed in the fact that unexpectedly vast numbers of students and lecturers turned out to demonstrate against soaring tuition fees and education cuts.

Over 50,000 came to express their opposition to the Con-Lib government’s programme of cuts. It was the first major march against the Coalition and the biggest student turn-out for over a decade. Frustration and anger ran through the whole march. A common refrain was that “no one is listening” – reflecting the fact that the accepted political process is a dead end.

“Tory scum”, chanted students breaking in to the Millbank headquarters of the Tory party. They should have added “Liberal Democrat and Labour scum”. In fact the Tories are the only main party that are not fees turncoats. Before the election, every Liberal MP signed a pledge to oppose a rise in fees. And it was New Labour that first introduced top-up fees in 2001, against Blair’s specific election pledge not to do it.

New Labour commissioned the Browne review of higher education funding, which went even further than the Coalition to propose lifting the cap on fees altogether. Who can say they wouldn’t have accepted its proposals if they were in government?

NUS President Aaron Porter, a member of the Labour Party and like Ed Miliband a supporter of a graduate tax, cannot explain how a tax, rather than higher fees, would enable young people from less well off backgrounds to go to university in the first place.

Lord Browne’s proposals represent the completion of the marketisation of higher education, which is enthusiastically supported by all parties in parliament. It discusses university entirely in the narrow terms of economic growth and money. David Cameron was happy to be able to tell a Chinese student that raising fees for British students would mean fees for overseas students could be held down.

Public funding for universities is being slashed by 40%, to be replaced by 2012 with student fees of up to £9,000 a year at some universities. Students starting university this year will already leave with debts of at least £25,000 each and the new measures will push that even higher.

And when they graduate, they will enter a job market in slump. With 69 candidates chasing every graduate job, the 2010 graduate cohort joined thousands still unemployed from the previous two years. They are now part of a generation of young people, graduate and non-graduate, who are over-represented in the ranks of those unemployed for more than a year. Youth unemployment is nine times higher than the national average.

The reality is that universities are now part of the market state and unworthy of the passionate commitment that lecturers and students continue to give them. The answer to this massive problem is to go beyond protest against the Con-Lib government, and recognise the transformation of the state as a whole that has resulted from corporate-driven globalisation.

States provide education only insofar as it will benefit big business. Whichever party is in control they are ready to sacrifice the future of millions of young people – and everything they could achieve for human society – on the altar of the mighty market.

But using technology and networks that have been largely created by the younger generation, a global alliance of the young and older workers can facilitate a transfer of power away from these global elites, and their corporate masters, and into the hands of the majority.

In the end, neither marching nor extreme forms of protest like the attack on the Tory Party HQ by themselves will bring about the kind of social revolutionary change that will create a world free from profit and exploitation.

People’s Assemblies, with full representation of every part of the community including students, young people and the unemployed, are the way to make a start in the process of transforming society’s economic and political power structures. All students are invited to come to Liberation Beyond Resistance – Towards a People’s Assemblies Movement in London on December 11, to plan the next steps along this road.

Penny Cole

Wednesday, November 10, 2010

Sinister attack on unemployed

Hundreds of thousands of workers in Washington State, among the eight million who have lost their jobs in the US since the recession, are now receiving letters warning them that their unemployment benefits could run out much earlier than they expected.

They thought they were entitled to 99 weeks of support, including 53 weeks of emergency unemployment compensation and 20 weeks of extended benefits. But it is looking increasingly likely that the newly-elected Tea Party influenced Congress is preparing to abandon the unemployed to their fate. With emergency benefits ending within days, those registering as unemployed will now be eligible for just 46 weeks of unemployment benefit – less than half the previous limit.

President Obama has talked of the danger that very high unemployment – currently running at 9.6% - is now “the new normal”, while senior economic adviser Paul Volcker warned that unemployment will remain high for a long time to come. The prospect of millions with no form of income looks set to become commonplace, and not just in America. One in five is out of work in Spain.

Tomorrow Britain’s Lib-Con Coalition will publish a White Paper expanding the meaning of its sinister threat that people who are in work will always be better off than those on benefits. Work Activity Scheme proposals to be outlined by Iain Duncan Smith, work and pensions secretary, could force long-term benefit claimants into unpaid manual labour on community work placements doing jobs like litter clearing and gardening.

With hundreds of applicants chasing every job in places like Merthyr Tydfil, the new scheme would give job advisers the power to require them to do community work for charities and local councils in exchange for the new universal benefit. With 1.9 million children living in a home with no working adult, the UK has 5 million people on out-of-work benefits and one of the highest rates of workless households in Europe.

The contraction of the global capitalist economy is irreversible, and Duncan Smith knows it. Whilst millions of employment contracts have been broken and millions more are about to be busted, he is talking about a profound shift. The Coalition plans to establish a new, punitive form of contract between the individual and the state. Just as in the US, benefits will be withdrawn, and wage levels driven down.

In Ireland, which is just a few months further down the track towards state bankruptcy, with unemployment at over 14%, wages in the public sector have already been driven down by 14% and in the private sector by 7%. That is what is planned for Britain.

Duncan Smith’s threat is clear: "I think most of the public think that progressively you send them signals. They have a bit withdrawn, then a bit more, then eventually to have to say you will eventually lose all your benefit.

"The signal will get round very quickly that you are serious about this. We may have to do it initially to some of the more recalcitrant people. But I have a view about human nature, most people once you start to show them the right way out I think most people move. Those who won't play get lost in the system at present and they infect everyone else."

The use of the term “infect” is particularly sinister and reveals the deeply reactionary, not to say totalitarian, thinking behind this government. These are ideological threats for sure, but they are formed by the reality of a worsening crisis. Protest or changing those at the helm of the state can’t reverse the fact that the economy is shrinking at a rapid rate.

Capitalist production must be replaced by a different way of doing things. People’s Assemblies are needed to take over the productive resources currently owned by investors grouped together in secretive private equity funds, and turn them from for-profit destruction of the eco-system to planned production for need.

Gerry Gold
Economics editor

Monday, November 08, 2010

No time for burying heads in the sand

Political innocence is one thing. But desperately hanging on to a blinkered point of view in the face of overwhelming evidence to the contrary is altogether more dangerous.

A blunt refusal to grasp that the system of capitalism is in crisis was all too evident at an anti-cuts conference called by the South East Region of the Trades Union Congress (SERTUC) at the weekend.

SERTUC President Martin Gould told union representatives that the LibCon spending cuts were “ideologically” driven. The economic situation, he insisted, was “the bankers’ crisis, not our crisis”.

He was taking his cue from TUC general secretary Brendan Barber, who repeated the mantra that government policy is, “not driven by economics but by a political project” (October 21). And that the spending review was “not an economic necessity but a political choice” (October 19).

There was not the remotest suggestion from leaders who spoke that there might be a real, objective global economic crisis, manifested in mountains of debt. that was driving the British state to withdraw from its post-World War II role of providing social support.

On the contrary, they said that “a lot of money can be squeezed out of the rich and the bankers”. In the face of “60% of the population believing that the cuts are necessary and inevitable”, Christine Blower of the National Union of Teachers said that a campaign of education was the answer. She compared the cuts agenda with the sinking of the Titanic, in which the rich passengers got the lifeboats while the poor had no chance. Heather Wakefield of UNITE called for “a battle of ideas” and “mass mobilisation”, saying there was a need to “get political” and “challenge council officials”.

Never the remotest suggestion that it was time to get off the sinking ship of capitalism altogether and transfer ownership and management of resources into the hands of the majority in society.

Behind the claim that there is no serious debt or financial crisis and that pouring money into job creation (a total failure in the US) is the answer, lies an unstated assumption. The trade unions and working class must be kept chained inside the system of production for profit and the political status quo. Of course, if the cuts are purely “ideological” in their nature, it follows that they can be reversed or halted through pressure – within the system.

The Public and Commercial Services union has issued a popular pamphlet “There is an alternative”, which calls for resistance to the cuts and for a “new economic strategy”. Nonetheless, it says that the government should be forced to implement it. Yes, the PCS is right. We need a new vision. But the notion that the LibCons or New Labour will deliver it is totally in their dreams.

Jenny Sutton, chair of the London Region of University and College Union was the only speaker who took the bull by the horns. “We can’t wait until spring. There must be something before Christmas to embolden people – and not just a protest – we must stop that wheel from turning. There must be a real commitment to a general strike.”

Yes, real action is needed but that action must have a strategy that goes beyond resistance and protest if it is to be successful. The cuts agenda is evidence that the existing economic and political system is well and truly broken and cannot provide for the needs of the majority in society. To deny that is to bury your head in the sand at a time when it's necessary to raise our sights.

Only a truly alternative economic and political system, based not on profit, but collective stewardship, as outlined in the Manifesto of Revolutionary Solutions, can provide lasting answers to the cuts. Working for a Network of Peoples Assemblies on December 11 to implement these strategies is the way forward.

Corinna Lotz
A World to Win secretary

Friday, November 05, 2010

Making university education free for all

The Coalition’s drive to turn university education into a market-driven business in place of a state-supported system has resulted in an unprecedented alliance of students and lecturers. If the aim, however, is restricted to pressure on the government, the alliance will flounder on the rocks of reality.

That, unfortunately, is certainly the aim of the University and College Union (UCU), which has is organising a joint march with the National Union of Students (NUS) in London next week. “The demo is part of our strategy to influence the Coalition Government,” says the UCU website.

In a similar spirit, the NUS led by president Aaron Porter, a Labour Party member, was caution itself when it responded to the announcement this week that tuition fees will rise from the present £3,290 to anywhere between £6,000 and £9,000 a year. Add in living costs, and students can expect to leave university owing up to £40,000 in loans.

Porter berated the government for providing “no reassurance that requirements on access, employability, quality or the student experience would be any more effective than they are now." The NUS president is reported to favour a graduate tax instead of higher tuition fees – more like an alternative market solution than a clarion call for free higher education.

And is politically difficult for Porter to oppose the Browne report into fees that recommended the rise in fees. The former head of oil giant BP was actually commissioned by New Labour to report on the future funding of universities. Students will also remember that the Blair government was the first to introduce tuition fees, beginning the undermining of higher education that the Coalition has deepened.

Both the NUS and the UCU are banking on Liberal Democrat MPs to block the dramatic rise in tuition fees. Lib Dem MPs signed a pledge during the general election campaign opposing higher fees. But opposition from ministers like Vince Cable has melted away under pressure from the Tories who are the senior partners in the Coalition.

The harsh reality facing members of both the UCU and NUS is that the attack on higher education is totally bound up with the financial crisis and economic recession. That is what is driving the drastic cuts in university funding which tuition fees are supposed to replace. It’s the same crisis that will cost 100,000 local council workers their jobs as central government support is slashed.

Graduate students are already suffering because of the recession. More than 21,000 – nearly 9% of the total – who graduated last year were still without work six months later, and 55,000 ended up in stop-gap jobs such as bar work. The figures are certain to worsen as the spending cuts reduce the number of opportunities for graduates.

Capitalism as a system isn’t working and as a result, the state is transferring the burden of the crisis on to students, workers, the unemployed, pensioners and those dependent on benefits. Under these conditions, no amount of pressure will make the Coalition change course. We need to go beyond resistance.

Free higher education in place of fees and loans remains the aspiration. In a country as rich and developed as Britain, it ought to be achievable. Standing in the way of this is a bankrupt economic and political system based on exploitation and profit, backed by a ruthless state. As a first step to breaking this impasse, students and lecturers need to link with firefighters, transport workers and others in the cuts firing line to plan a co-ordinated mobilisation against the Coalition with the aim of bringing the government down.

Paul Feldman
Communications editor

Thursday, November 04, 2010

Plundering the planet

The battle for the planet’s dwindling resources has taken a further trade war twist with China placing limits on the export of the 17 chemical elements collectively known as “rare earths”.

These elements found near the bottom of the periodic table are absolutely crucial for manufacture of a wide range of modern technology products including superconductors, magnets used in wind turbines, catalysts for electric cars, electronic polishing for optical products, laser technology, fibre optics, cathode ray tubs, microwaves, and – less usefully perhaps – i-Phones and flat-screen TVs.

China gained a virtual monopoly of the “rare earth” market during the 1990s, stepping up production and driving down world prices, putting other mining operations out of business. Now it controls as much as 97% of the market.

Rare earths are not found in high concentrations – you have to move a lot of earth to get at them. The extraction process produces radioactive slurry and toxic acids are used in refining. The Chinese government’s operation in inner Mongolia, has caused major damage to the environment. The photograph (thanks to Keith Bradsher, Chinh’s News) shows a slurry pit outside the city of Bautou, centre of the mining industry, where the air is acrid and the people suffer respiratory illnesses.

If the Chinese continue to limit exports, there will be a rush to restart elsewhere. In fact the Mountain Pass mine in California – closed since 2002 – will re-open next year with new owners, and there are plans for a big operation in Canada. Shares in rare metal mining companies have soared in recent months.

Whilst the market in rare earths is worth $2bn a year, mining is not highly profitable since it is at the refining stage that most of the value is added. But that could all change as demand outstrips supply.

Some of the rare earth elements are becoming harder and harder to come by even in China – and the pressure to mine all known deposits is growing, in the same way that the rush is on to extract all known deposits of uranium to fuel a new generation of nuclear power plants.

The reality is that the world is running out of some of the most crucial chemical elements.

For example there is a growing shortage of Helium 3, an inert gas which is a by-product of radioactive decay. It is used in cryogenics, medical imaging research, and radiation detection devices. Stocks are dwindling whilst demand soars as a result of its use in security scanners. The “war on terror” is actually threatening cancer research rather than terrorists. There is about 10 years supply left of the elements indium and hafnium, thanks to the manufacture of flat-screen TVs. Both are essential for solar cells and computer chips.

A recent United Nations report called for urgent expansion of recycling of speciality metals. Thomas Graedel, the leader of the working group which is assessing world supply, warns:

“Scientists should anticipate the possibility that they may not have the whole periodic table to work with in future. Except for the major base metals and a couple of the most valuable metals, rates of recycling for almost all metals in the periodic table are low. That means that they will be used one time and discarded, and that's a non-sustainable approach.”

But sustainability is the last thing on the mining corporations’ minds. Extracting metals in useable form from manufactured products is expensive –particularly so in terms of the energy used to do it. Extraction of the raw material in low wage economies is cheap and controls are few. Apparently Afghanistan has significant deposits of rare earths – any bets on the future of those?

The only long-term and sustainable solution is to shift from profit-driven manufacture to needs-driven production, where valuable elements are husbanded for use in essential products. At that point, built-in obsolescence – an obscenity in the current crisis – becomes something we look back on with horror as we look back on the mines and mills of the industrial revolution.

Penny Cole
Environment editor

Wednesday, November 03, 2010

America's crisis takes a turn for the worse

The sharp swing against the Democratic Party in the US mid-term elections will inevitably deepen a political crisis in Washington which centres on the inability of the state to halt the historic decline of the American economy.

Obama’s inability to make any impact on a worsening economy drove voters to desperate political extremes in a rage against “big government” and its perceived failures. Conservative Democrats turned to the Republicans, whilst the Republican Party has been turned inside out by the ultra-right Tea Party movement.

The Tea Party’s God-fearing, evolution-denying, extreme nationalist representatives want to fast-track US deficit reduction by immediately shutting down government spending, including social security and publicly-funded education. One of the first decisions to be made by those newly elected will be whether to renew the programme that funds extended unemployment benefit. It runs out on December 1.

Significantly, as the electoral dust settles, the Federal Reserve – America’s central bank – is readying itself for a last throw of the dice aimed at stimulating demand. The Fed is about to announce a second massive programme of quantitative easing – printing of money to you and me.

Some are saying that Federal Reserve chairman Ben Bernanke will release a “wall of money” and as much as another $1 trillion will flood into the economy through the buying up of government bonds. It will add to the $1.75 trillion already created in the attempt to prevent financial Armageddon in 2007/8.

If it happens, the value of the dollar will fall, push interest rates down, halt the house price decline, stimulate investment and consumption and make exports from the US more attractive – or so the theory goes. But that kind of American Dream is pure fantasy.

Reality tells a different story. Despite an already declining dollar which makes US produced goods and services cheaper in international trade, they struggle to compete with commodities made by dollar-a-day labour in China, SE Asia, and Latin America. Last year US imports ($2.404 trillion) vastly exceeded exports ($1.842 trillion) in spite of a weaker dollar.

Further reductions in the value of the US currency can only accelerate the competitive downward pressure on living standards throughout the world. When US workers are obliged to buy foreign goods to feed and clothe their families they know they are cutting their own throats. The Dream is long gone.
And, despite Obama’s previous stimulus package, the Great Recession is rapidly turning into the worst slump ever. The so-called “recovery” has failed to restore the millions of jobs lost since 2008. Quite the opposite. One in 10 – close to 15 million of the American workforce – are counted as unemployed and the number is rising.

Those obliged to work part-time has more than doubled since the beginning of the recession from 4.5 million to 9.5 million. The number of “discouraged workers” no longer in the labour force because they gave up looking for work increased by more than 70% in the year to September 2010. When the unemployed, underemployed or discouraged or added together, the total reaches 17% of the workforce.

With incomes declining sharply, house prices are continuing to fall and eviction totals are mounting. Seven million homes are “delinquent” because payment deadlines have passed, are in repossession proceedings, or have already passed into the hands of the lenders. Homelessness is soaring, putting pressure on shelters which have started to charge fees of $7 (£4.50) per night.

“Big government” in the shape of the capitalist state has indeed failed because the crisis is global, with a logic and momentum beyond the reach of individual states and governments. The US election outcome provides an historic opportunity. Americans should begin the task of creating new forms of economic and political democracy in which they can forge a path to a society based on the satisfaction of the needs of the many and not the corporations. Both the Republicans and Democrats stand in the way of this much-needed social liberation.

Gerry Gold
Economics editor

Tuesday, November 02, 2010

Spooks muscle in

The result of the toner cartridge bomb plot, as with all such individual acts of terrorism, will be to further strengthen, rather than weaken, the anti-democratic arm of the state to use against its own citizens.

Whatever the true nature of the plot, said to originate from an Al Qaeda cell in Yemen, its exposure will be useful for MI5 chief, Jonathan Evans. Evans wants anti-terror legislation introduced by New Labour – 28-day detention without charge and “control orders” in particular - to remain on the statute books.

Before last May’s election, both Conservatives and LibDems attacked New Labour for this open breach of civil liberties. Lib-Dem leader Nick Clegg was particularly outspoken, condemning the “control order regime” and calling for its abolition. Now that Cameron is in office, the spooks have told him they need these laws and apparently he says that if Clegg objects, the coalition is “heading for a fucking car crash".

Cameron yesterday chaired an emergency meeting of COBRA, the committee that takes over in the face of major terrorist or health threats. In parliament he spoke of the need to “cut out the terrorist cancer that lurks in the Arabian Peninsula”.

Evans, along with his fellow spooks in the Office for Security and Counter-Terrorism based in the Home Office, are lobbying the government hard to keep the laws on the books so that they can do what they want with terror suspects.

The intelligence agencies are already virtually the only area of government spending not facing cuts – in fact MI5, MI6 and GCHQ have been awarded an extra £65m on top of their existing £2.4 billion budget to run their 5,700-or so agents, much to the chagrin of Defence chiefs. Counter-terrorism and spying on the population is a greater priority than the armed services, apparently.

The reality is that however much they spend, countries across Europe, and the US, are still vulnerable to terror attacks. The toner cartridge bomb exercise demonstrates that it is relatively simple to construct such devices. As long as there are individuals prepared to risk their lives – and terrorist organisations like Al Qaeda to fund and organise global networks – this cat and mouse war will continue.

Hyping their ability to prevent further attacks through big-power co-operation and more cash for spooks, is just whistling in the dark. Innocent civilians in cities like New York, London, Madrid, Mumbai and Nairobi will be the ones to suffer. And the threat is not only in the west – yesterday 52 worshippers lost their lives in yet another Baghdad bombing.

Governments who continue to fight disastrous and hopeless wars like that in Afghanistan, supposedly to root out terrorism, will never succeed in protecting their citizens from terrorist attacks. Quite the opposite.

But will they listen to the advice of former Soviet leader Michael Gorbachev who said last week that victory in Afghanistan was impossible and that the same militants terrorising Afghanistan and Pakistan today were trained by the US? Of course not.

Fighting the so called “war on terror” and protecting populations from terror attacks – real or imaginary, actual or contrived - is one of few important roles that today’s political leaders can lay claim to – as they set about deconstructing the welfare state.

And the spooks lobby will continue to enjoy government support as long as that is the case, not only for the so-called “war on terror” but also to rapidly resurrect the role they played so enthusiastically in the 1980s, of targeting trade unionists and others fighting the actions of the government. For example trade unionists like the firefighters. many of whose personal details including home addresses, were this week mysteriously leaked to the Sunday Mail.

Corinna Lotz
A World to Win secretary

Monday, November 01, 2010

Corporate tax scams you may have missed

Protests outside Vodafone shops at the weekend amid claims that the mobile phone company had been let off most of a £6 billion tax bill, highlight the fact that the major corporations ultimately call the shots at the expense of the ordinary taxpayer.

Vodafone’s case is just one example where transnational corporations (TNCs) deploy vast resources to minimise, avoid, reduce or eliminate tax liability. HMRC, who cannot compete at the same level of expertise, usually come off worst when they launch a challenge.

Take the case of food and drinks giant Cadbury-Schweppes. It set up a shell company in Ireland with no office and no employees but with £500 million in cash, which was allocated to different parts of the group. The incentive was a simple one. Corporation tax in Ireland is 12.5% - less than half the rate in Britain.

Under what are known as the Controlled Foreign Company rules (CFC), HMRC tried to collect the missing taxes. But after a series of cases, the European Court of Justice found in favour of the company on the grounds that member states could not block corporations from operating in different parts of the European Union. In 2008, HMRC lost against Vodafone in a similar case. Vodafone was thought to owe about £6 billion; it eventually settled for £1.2 billion.

An extraordinary case highlighted by BBC Radio’s File on Four is that of the Alliance Boots pharmacy and health products group. It is one of more than 27,000 companies registered for taxation purposes in the Swiss region of Zug, equivalent to one for every man, woman and child.

The reason that Burger King, Boots and other corporations are in Zug is simple – the rate of tax on corporate profits is 8.8% compared with 28% in Britain. After a series of mergers, Alliance Boots was eventually taken over by a private equity firm. The company used to pay around £120 million a year in taxes in Britain. One expert reckons the company paid about £14 million last year – an effective tax rate of just 3% on its £450 million plus profits.

Companies can also reduce corporation tax rates by using transfer pricing, which sets the price at which one unit of a group sells goods or services to another unit of the same group in a different tax jurisdiction. Google used this device to avoid virtually any corporation tax on its £1.6bn advertising revenues in Britain.

The capitalist state and governments of various hues are entirely complicit. In Britain, the corporation tax rate was 53% in 1983. It’s now heading for 24%, while some suggest that because of transfer pricing scams, the effective rate is 21%. During the credit-fuelled boom, corporate tax revenues rose to help pay for public spending. They collapsed in 2008 and helped accelerate the budget deficit. Now ordinary people face horrific cuts in services, jobs, wages and conditions as a result.

Professor Prem Sika, of the Centre for Global Accountability, Essex University, points out that “taxation is targeted by financial engineers who regard it as an avoidable cost, rather than a return to society on the investment of social capital (education, security, healthcare, legal system, etc.).”

Globalisation, of course, freed corporations from territorial jurisdictions and facilitated the creation of subsidiaries, joint ventures, special purpose entities and trust to benefit from low taxes and subsidies.

In the Dark Side of Transfer Pricing, Sika adds: “Reducing or eliminating taxes is attractive to corporations as it boosts shareholder value, post-tax earnings and returns to shareholders. It also increases company dividends and executive rewards as these are linked to reported earnings.”

In other words, for the corporations the whole issue of taxation (or how to avoid it) is an essential aspect of capitalist accumulation itself and not some form of aberrant behaviour. There can be no semblance of tax justice so long as the profit system rules the roost.

Paul Feldman
Communications editor