Archive for November, 2008

The Definition of Political Bankruptcy

November 26, 2008

What’s the point?

Worth a Read: The Morning Star and the Current Crisis

November 25, 2008

I did something I very rarely do today, and bought the Morning Star, the English-speaking world’s only daily socialist newspaper. I rarely but it partly because it is a hard paper to come by, and partly because its politics sometimes baffle me, especially its line on Northern Ireland, which more often than not reads like a nationalist press release rather than a socialist analysis. At the same time, it’s important that such a paper exists, and it does often contain interesting material. Although it remains the publication of the Communist Party of Britain, it has in the last number of years attempted to open itself up to the broader left, mainly as a matter of survival. Its columnists now include George Galloway for example. It’s a good place to go to for international politics and the story of trade union activity in Britain.

Today it included alternative plans for restarting the economy, including from the civil service union PCS which were interesting in themselves, and exactly the sort of thing that the trade union movement in the UK and the Republic should be doing, given the inability of the parties of the left to produce detailed alternative policies due to their weakness. But the most interesting article came from John Foster, the CPB’s International Secretary, and discussed how Marx was essential to understanding the current financial crisis. Its title ‘Let’s Get Technical’ says a great deal about the argument that followed.

Foster acknowledges that the standard analyses offered by financial journalists so far have some validity – the bonus culture and irresponsible investments, the absence of sufficient regulation, and the trade imbalances between debtor and creditor countries. Naturally, he does not, however, accept that addressing these issues will solve these problems.

More profound processes are at play. Only the term state monopoly capitalism, conceretely applied, provides a full understanding.

State monopoly capitalism? I nearly choked. Except of course, the word monopoly marks us off clearly from the world of Tony Cliff and the SWP. “State monopoly capitalism brings together two interlinked developments – the evolution of the capitalist market and the way that our ruling class organises that market to sustain capitalist profit.” Foster points out that Marx identified the tendency of capitalism to monopoly, and its effects on credit transactions and the dislocation of markets. Lenin, he says,

used the term state monopoly capitalism to describe the stage where this dislocation of the competitive capitalist market demanded state intervention in the interests of capitalist stability. But he stressed that this state intervention was no more neutral than that of the capitalist state in general, except that, in these new conditions, it defended the interests of the great concentrations of capital against small business as well as against workers. As a result, the capitalist class was increasingly divided against itself

Foster points out that the conflict between the increasingly narrow appropriation of profit and the socialised character of production remains today; as does the pattern of periodic crises. He identifies changes in the precise mechanisms, however. The state had to step in to revive production during the Depression of the 1930s, on the terms of big business, financing it via inflationary finance, at the expense of small businesses and other non-monopoly strata and workers.

Growth revived, but only on the basis of a redistribution of income by the state to monopoly and the still closer interlinkage between monopoly capital and the state apparatus. Hence the term state monopoly capitalism.
Essentially, this was how governments maintained growth for the 30 years after 1945. Keynesian politics called for the injection of liquidity whenever the economy slowed. The business cycle was smoothed and the growth of big business accelerated. But all this came at a grave cost to others.

Developing countries were further exploited, Foster argues, while proletarianisation was accelerated among the rural populations of advanced countries. The Keynesian consensus was broken by the oil producers striking back in the 1970s and the demands of the labour movement for a greater share in the wealth produced, and the response of monopoly capital, especially in the US and UK, sowed the seeds of the present crisis. The response, he says, sought to transform the framework of the market in four ways that now make up neoliberalism. Firstly, an assault on organised labour, and the creation of a “flexible” workforce, i.e. one more easily exploited. Secondly, privitisation of utilities and services to provide big business with a direct income stream. Thirdly, capital movement was freed to allow for the export of capital to more profitable regions, and transforming the City of London at the expense of deindustrialisation. Fourthly “and most critical of all for understanding the current crisis, workers’ savings for pensions, insurance and housing were transferred into the private sector.” This created “the key new mechanism for the extraction of superprofit.”

Foster argues that although there remains an element of monopoly pricing, the bulk of capital in public companies and high street banks now comes from pension funds and the savings of employees and non-monopoly strata, who have fallen in number. They provide the basis for the array of financial instruments (merchant banks, hedge funds and the like) and speculation used by the very wealthy to secure further profits.

This system was no more immune from capitalism’s contradictions than its predecessors. The accelerated accumulation of capital placed pressure on average profit. The export of capital to countries like China and India generated immense imbalances in trade and currency reserves.
Fatally, the system fell prey to the inequality and poverty which it had created. Workers could no longer afford to buy all the goods produced.
So, to keep the money wheel spinning, governments and banks between them colluded in the creation of massive levels of sanctioned debt, above all in mortgages. In the hands of finance capital’s investment specialists, this became the credit required for one last round of leveraged speculation in property, commodities and private equity buy-outs.
Then the bubble burst, leaving working people facing unemployment and repossession.

Foster puts the reality of the situation at its most naked:

It’s not a matter of bonuses. It’s about state power – state monopoly capitalism. Change will require the creation of an alliance that can budge that power by uniting all those who are suffering the consequences.

To restore the economy, he demands that savings, pensions and insurance are taken under public control, which means state-owned banks, not subsidies for finance capital. It means an end to speculation, tax havens – more than half of which are controlled by Britain – PFI and more taxation of wealth. “If enough people understand the real cause of the current crisis, these are demands that no government could deny to an angry, mobilised majority.”

This is why the Morning Star is valuable. It gives space to these ideas. It is important that the blunt reality of the situation is made clear. The reality of economic organisation in a capitalist society. The true class nature of the state. The need for ordinary people to organise politically behind a class-conscious and militant party of the working class. And this is also why, although I have problems with it, I will be buying the Morning Star more often.


Interview with Communist Portugese Novelist José Saramago

November 22, 2008

Interesting interview here with the Portugese Nobel laureate Jose Saramago, who remains a member of the Portugese Communist Party, one of the leading forces for progressive politics in Europe, and a dynamic actor in Portugese political and cultural life.

Good Riddance

November 21, 2008

And so adieu to the much loathed 11 Plus, the final test of which was sat today. I for one will not be mourning its passing. Now if we only had a replacement set up. The issue of transfer from primary school to secondary school was noticeably absent from the deal to get the NI Executive up and running again. Or, in other words, once again our politicians have ignored the real issues in order to pose to their respective communal bases. Policing and Justice is important. But, unlike the transfer system, it is taking place regardless of what happens in the Assembly, and we all know that. The politicians need to get down to serious business, so this shambles does not continue.
One other quick point. Once again, the DUP has run rings round the Provos in negotiations to get the Executive up and running in not naming a date for the transfer of Policing and Justice. I wonder how long that Adams and co can preserve their reputations with their voters as the shrewdest politicians around.

Love Financiers. Hate Workers.

November 19, 2008

Henry Paulson, US Treasury Secretary and ex-merchant banker, has said he will not use the $700bn rescue fund to help the car manufacturers General Motors and Chrysler who have gone to Washington to seek aid. The aid is question is of the order of $25bn, and relative to the overall budget, not a huge amount. Especially when you consider that they employ 250,000 workers directly, with possibly millions more dependent on the industry. While Paulson and Bush say they want to help out the car makers, they want the funds to come from a different source. I am sure that neither the Republicans nor the Democrats will allow these giant companies to collapse due to the electoral cost. Michigan after all is a key swing state in Presidential elections but this shows the real nature of the bailout. It is aimed to support finance capital and white collar employees, at the expense of the taxpayer and working class people. We didn’t really need another reminder, but we got one anyway.

Gilmore says no to the north. Again.

November 19, 2008

A very interesting post at South Belfast Diary, where (an angry) Jenny has mounted the leaked section from the Irish Labour Party’s now delayed 21st Century Commission dealing with Northern Ireland. The short version is that the Irish Labour Party has ruled out standing in elections in NI while the SDLP still exists, and Eamon Gilmore has written to NI members confirming that this is the case. Should the SDLP merge with Fianna Fáil, which is now no longer a serious possibility, the Irish Labour Party would hope to use the Party of European Socialists to avoid having to organise in NI.

If the SDLP, in whole or in part, chooses at some future stage to merge or create formal links with Fianna Fáil then it would automatically lose its membership of the PES. In all likelihood, in those circumstances a potion of SDLP members would decline to follow the party into such a merger or alliance. It would then be important that we, along with the British Labour Party, ensure that the social democratic and labour movement is adequately represented in Northern Ireland politics. Under the Statutes of the PES it would be possible for the new party to allow for dual membership for Northern Ireland members. Accordingly, an activist could be a member of the new party and the Irish or British Labour Party. Such a provision could accommodate the dual community identity (“British or Irish or both”) that remains at the heart of the Good Friday Agreement.

Instead, the Commission recommends increased coordination with the SDLP, in pursuit of what I can only describe as a bizarre interpretation of the 1916 Proclamation’s line about cherish all the children of the nation equally:

Such a covenant would entail:
· A community where no child is ever left behind because of disability, or left out because of colour
· A Nation where to be a child of Ireland does not have to mean a child of Irish parents
· A society where parents of an autistic child do not have to research, lobby and petition various service providers as though they are the first
· A culture where young women are safer on our streets and young men are safer on our roads
· An island where children and their families will be protected against persecution and prejudice as well as poverty
· An economy that invests in the skills and values the talents of all young people including those with learning disabilities
· A country whose services and systems, laws and budgets truly proclaim “Every Child is our Child”.

As I pointed out in the comments at South Belfast Diary, this should come as no surprise. One of the main motivations behind the decision of Gilmore and the other five TDs who split from The Workers’ Party in 1992 in pursuit of a move to the right and government positions, was to cut their ties with the north so they could concentrate on the south. Although the Democratic Left did organise in NI during its brief existence, and even stand in elections, it never gave much attention to the north. When DL was wound up, its northern members were told to join the SDLP, despite the fact that for several decades they had been arguing that it was as much a part of sectarian politics in NI as any other party. It seemed when the Irish Labour Party agreed to accept members in the north, that they had been offered another chance, but this has now been revealed for the purely cosmetic exercise it always was.

So where does that leave the people who are in the Labour Party in the north? They can try and get permission from the British Labour Party to stand in elections, but this looks like being a long way off, given that they were only allowed to join after a court case. I also suspect that many of the NI members see themselves as more left wing than New Labour, and would not be entirely comfortable with it. Many of these people are genuine about wanting strong socialist politics in Northern Ireland, and about fighting sectarianism. I think that they will have to look elsewhere. Even if an organisation like The Workers’ Party would be too far to the left for many, the ongoing discussions about an agreed left candidate in Europe or some such coalition in the future may provide them with a home that allows them to be active on all fronts.

Mercenaries – victims of cheap foreign labour

November 17, 2008

The Guardian has an entertaining story on its front page with British mercenaries in Iraq and Afghanisatan complaining about being undercut by cheaper eastern European labour, with backgrounds in the special forces of those countries.

The National Association of Security Professionals (Nasp), an organisation for those working in the private security industry, said former British soldiers are being laid off by companies in Iraq who are turning to east Europeans instead. The number of Britons providing security in Iraq has fallen from a peak of about 5,000 in 2004-05 to nearer 2,000 this year.
Mark Shurben-Browne, a director of Nasp, said the market had reached saturation point, with companies receiving 10-20 CVs a day. But many firms were trying to reduce costs by hiring staff from eastern Europe, particularly Serbs and Croats.
“One company sacked half their British workforce and replaced them with cheaper guys with a special forces background from eastern Europe,” said Shurben-Browne.
“The companies are mixing the teams up, keeping two or three expat or British guys on in a team with the rest from eastern Europe.”

The National Association of Security Professionals. Talk about a misnomer. What this is is a gang of mercenaries, who have been getting fat and rich as an unaccountable special army that has a dreadful record of human rights abuses and killing civilians, often being spirited out of the country to avoid local courts – or any justice at all. Astoundingly, there is also an employers’ federation for these people:

Andy Bearpark, director general of the British Association of Private Security Companies (BAPSC), said: “There may be some blokes in Iraq earning £100,000 a year tax-free, but £50,000 tax-free is a much more likely figure now.”
Bearpark has heard of Fijians, Gurkhas, Ukrainians and Sierra Leoneans being employed, usually on much lower wages than British and US personnel. “There was a US firm which was not even paying Sierra Leoneans 10% of what they paid their US staff,” he said.

So mercenaries are the victims of the credit crunch as well as merchant bankers. Every cloud has a silver lining. We on the left are sympathetic to people who lose their jobs by inclination. And perhaps we could view becoming a mercenary as a rational choice by people to employ their particular type of skilled labour power. However, the fact that many are coming from Croatia and Seriba should raise questions, and a clear description of the character of many of the British people involved is provided by Bearpark:

“It’s not unusual for guys to go and buy shares in a Bangkok brothel and within three months they’ve lost it all and then they have to try to get another contract to pay off their debts. They’re not people used to handling a lot of money. The average guy is earning £40,000-£45,000 in Afghanistan, which is nothing like what people were earning in Iraq,” said Bearpark.

I think that says enough about the mercenaries. One other point – the language employed by The Guardian. What have we come to when a paper that is supposed to be the voice of progressive Britain unquestioningly adopts the language of the “private security industry”, and puts it on its front page?

Why Civil War Politics are here to stay

November 17, 2008

I have just put up this discussion at Cedar Lounge Revolution of why predictions of the demise of civil war politics in the south are sadly mistaken.

Remember the Somme (but forget the GPO): Myers and Memory

November 15, 2008

As I was saying, the whole obsession with the poppy and the uncritical celebration of imperialist war around Remembrance Day drives me up the wall. Imagine then how delighted I was to see Kevin Myers demand we all remember those from Ireland who died serving in the British Army during the two world wars (though he ignores the fact the money from the poppy goes to the veterans of other, often nakedly colonial, conflicts). Myers cleverly picks people who died during World War II, and tells their stories. No-one in their right mind can deny the Second World War was a just one, so anyone who rejects his argument can be easily smeared. Utterly, utterly cynical. I’ll skip the extended rant this deserves, instead I will just say that I’ve never noticed Myers extend the same courtesy to those during the period 1916-23 who died in pursuit of recognition of the democratically-expressed wish of the Irish people for greater independence from Britain. I do wonder about some people some times.

Northern Ireland’s Problems in a Nutshell

November 14, 2008

Reverse Secularisation