Vodafone - tax dodgers!

On Saturday October 30th, people took part in peaceful protests against Vodafone all across the UK. During the protests many Vodafone stores were closed. Protesters are angry about the fact that Vodafone have been 'let off' a £6 billion tax bill by chancellor George Osbourne at a time when the Condem Government is slashing public welfare, hitting benefits for the low paid, disabled and unemployed. As I type this lawyers and accountants are working hard to come up with schemes for corporations to avoid paying tax. The BBC Radio File on Four programme ' A Taxing Dilemma' reported tonight on how UK corporations are cooking up tax avoidance schemes. Big business is using the benefits of globalisation to play off one country against another in a 'race to the bottom' for corporate taxes. In the long run this kind of activity can only damage the welfare of citizens in countries around the world and needs to be stopped.

I was in Manchester to attend an anti-cuts meeting organised by the Labour Representation Committee at which Labour MP John McDonnell spoke. McDonnell is one of the few Labour MPs who had the courage to speak out against the neo-liberal programme of cuts and privatisation followed by New Labour. He tried unsuccessfully to challenge Gordon Brown for the leadership of the party, being prevented by the ridiculously high hurdle that leadership contenders have to jump over to stand.

On the 28th of October in Oxford students clashed with police who attempted to stop them marching to protest against education cuts. Little of this activity gets mentioned in the media but there are protests going on all over the country against the fact that ordinary people are being made to pay for the excesses of the market, and this is before the cuts have really started to bite. If you want to find out more visit the Coalition of Resistance's excellent website. This isn't France but there is growing anger and unease about what is happening. We are still at the early stages of a fightback against government for the rich by the rich.

Is the American Empire going to collapse?

I guess some people will quibble about me using the word 'empire' to describe the USA. I have no problem with it. The Americans have always been canny about creating an empire. Rather than direct colonisation they have used economic power to control the markets, and fate, of other countries. With a few exceptions - the Philippines, Grenada, Iraq - there has been little 'direct' intervention. They have preferred to use covert methods such as de-stablising and causing the overthrow of governments, and lets not forget that South America was always described as their 'backyard'.

However, the real point of this post is to examine what is happening now in the USA and how it compares with its once great rival the Soviet Union. The Soviet Union collapsed in about 1990. Some Americans, known as the neo-conservatives, would like us to believe that that the USA was responsible for bringing the Soviet Union down.

Its important to distinguish between the neo-conservatives and neo-liberals. The neo-liberals were a group of economists from the 'Chicago School'. Starting in the 1970s they advocated an extreme form of free market capitalism in which the state, and democracy, is subjugated to the market. They have been very influential and have succeeded in creating the current free market paradigm which we are all now being subjected to. The economist Milton Friedman was one of the chief originators of neo-liberalism. The neo-conservatives were a small but powerful group of American right-wingers influenced by the academic Leo Strauss. Strauss advocated the idea of a 'noble lie' - the idea that society needed a myth to make it cohesive - that, for example, religion should be promoted even if it was untrue because it brought society together. The neo-conservatives who included people like Paul Wolfowitz and William Casey, Director of the CIA, used the mythology that the Soviet Union was a threat to the USA - which it wasn't - to bring about social cohesion in the US, and influenced the Reagan government to spend billions supporting Islamists in Afghanistan to fight against Soviet occupation in the 1980s. If you want to find out more about how this came about and why the so-called 'clash of cultures' is happening at the moment watch the excellent documentary 'The Power of Nightmares' by Adam Curtis. It is essential viewing. This is bit of a digression, but bear with me because its crucial to understand the distinction between these two groups and the massive influence they have had on world politics.

The real reason the Soviet Union collapsed was because nobody believed in it anymore. It had failed economically and socially. It was rotten to the core. Its decay may have been hastened by the Afghan war but it was already a house of cards just waiting to be knocked down. Mikhail Gorbachev, the last Soviet leader, recognised this but his reforms, which were intended to save the Soviet Union, came too late.

So what has this got to do with the USA today? My view is that the USA is rotten to the core also. Why? Because its democracy has been completely subverted by capitalism. It may have a fine constitution, but you can't get elected without millions of dollars, and those dollars come from Wall Street and the corporations - the mega-rich. The corporations are in control. The political system is utterly corrupt. That is why Barak Obama is impotent - he is funded by corporations. That is why Wall Street was bailed out in the recent economic crash whilst Main Street was being screwed.

But there is something more important going on, something fundamental. American politics has been corrupt for a very long time - but as long as people were getting richer it didn't matter. That is the American Dream. That is what has sustained the USA for more than two centuries. Now, the American Dream is dying. Real incomes for working Americans - many of whom regard themselves as being 'middle class' -haven't risen since the late 1970s. Recent 'prosperity' was fuelled by cheap credit and mis-selling of dodgy mortgages. The truth is that many Americans at the bedrock of society are getting poorer.

That is what the Tea Party is all about. Millions of Americans are angry, bewildered and frustrated at the recent crash and the fact they aren't getting richer anymore. But there is a huge problem here - they are directing their anger against the wrong enemy. The people who caused the crash - the financial capitalists and corporations of Wall Street aren't being blamed. Instead, the anger is being directed at the government. Why is this happening? Partly, it's a result of political ignorance on the part of ordinary Americans who refuse to blame capitalism for any of their problems, but the key factor takes us back to the rottenness at the heart of the USA - the Tea Party is being organised and funded by the very people who brought about the crash. How else would cranks like Christine O'Donnell be able to spend millions running for office? If the American Dream dies, as I suspect it will, the core idea behind the USA will die with it, and Americans may well decide they don't believe in America anymore. The USA could become a house of cards like the Soviet Union.

There is a great irony here - the founders of the USA and the Soviet Union both wanted to create a better society. Their methods and ideology may have been different but their aims were the same. The Soviet Union was brought down by the lust for power of ruthless bureaucrats like Stalin and a failed economy. Now the lust for money of the rich and the failures of unbridled free market capitalism threaten to bring down the USA. The consequences of the collapse of the Soviet Union were much more serious for people in the West than they could ever have imagined. The major consequence was that the free marketeers and corporations were given licence to dominate Western democracy and impoverish the rest of us. The consequences of the collapse of the USA, if it happens, will probably be even more severe.

Welcome to 19th century free market capitalism

In previous posts I have talked about how neo-liberal 'free' market capitalism is a project which aims to take us back to the 19th Century. Privatisation, de-regulation, outsourcing, and labour market flexibility are all products of neo-liberalism. They are all intended to weaken the rights of working people and their ability to defend their standard of living.

We didn't just get the eight hour day, the weekend, pensions, paid holidays and decent working conditions given to us - our parents and grandparents had to fight for them against capitalist employers who had no intention of reducing their profits for our benefit. We made these gains through organisation, in trade unions and political parties which made democratic gains through the ballot box.

The intention of neoliberalism is to roll back all the gains that working people made, and that would take us back to the 19th century. Neo-liberal politics has been dominant in the west for a generation - it started with Nixon in the USA and Thatcher in the UK. As ever, the Americans are ahead of us. In the USA there are 40 million poor people living in conditions that we in the UK would find shocking. Wages for working people have been static in the USA since the late 1970s, whilst those for the wealthiest have continued to grow ever greater. This isn't about some kind of entrepreneurship as they would like you to think, this is about the rich screwing the people who make them rich - workers.

Today, in the news we were given a glimpse of what '19th century - 21st' century Britain looks like. Romanian children were found labouring near Malvern, picking spring onions. The independent reported:

"The children were among 50 Romanian workers discovered picking spring onions in a field in the Kempsey area of Worcester by the Gangmaster's Licensing Authority (GLA). The seven children, aged between nine and 15, were being made to work from 7.30 in the morning until dusk, dressed in thin summer clothes, as temperatures dropped close to zero."

Of course the Independent, indignant, but missing the point as usual, complained about human trafficking. This isn't human trafficking - its capitalism, pure and simple - this is what capitalism is about. This is what happens when you let the market run without regulation. This is what will happen more and more frequently here and in Europe and America until we bring the market under democratic control. We did it in the past and we can do it again. But when we do it next time we must ensure there is no going back.

The ConDem cuts were neither fair nor necessary

£18 billion cuts in welfare, so far, from the ConDem government. Just contrast that with a £2.5 billion tax on the banks and £7 billion bonuses for bankers in the UK this year. These are the banks that we recently bailed out in the UK to the tune of £1.4 trillion. The economic crisis that we are in, which has lead to cuts which that will hit the low paid, unemployed, women, children, young people, and the disabled hardest, was caused directly by the failures of 'free' market financial capitalism. This failure and crisis was driven by neo-liberal right wing political ideology dressed up as economics - let the market do what it wants and all will be well. But remember that is where we were in the 19th century. Do we really want to go back to a time before we had pensions, welfare and half decent conditions for working people? Do we want to go back to the workhouse?

It may be hard to accept but that is where we are headed if neo-liberal ideology continues to prevail. Look to the USA, they are ahead of the curve as far as all this is concerned. The recent post I made about Gary shows this. If we allow the market to dominate, without democratic control and intervention then we are simply handing over our society to the whim of the corporate profit makers. What do they care about our welfare or about our communities? Why should they bother whether someone has a job in Mumbai or Middlesborough? All that matters to them is maximising the return on their investment. They are free to go anywhere, anytime, that they can make the biggest buck. And what does that say about the state of our democracy? Because it means that these people are above our democracy - they can do as they like. One law for us, and no laws for them.

The point about these cuts is that they were never necessary. We have survived bigger deficits in the past. George Obsourne's comparisons with the household budget are nonsense, we are talking about an economy, not a family. If we want to ensure a way out of the crisis we need to invest not cut. The Irish made cuts and look where that has got them - into a far worst state than when they started.

The reality is that the natural state of capitalism is economic stagnation, punctuated by boom and bust. The latest crash just happens to be the biggest since 1929, but there have been many others since capitalism started. In order to bring about real change we do must take these steps:

1. We must use democratic power to bring the market back under our control. As a first step we need to introduce the kind of controls on finance that existed in the 1940s, including exchange controls. During the period we had those controls we had a faster growing economy then we have had since the neo-liberal ideology became dominant.

2. We must create a viable economic alternative to monopoly capitalism by creating a truly mixed economy. This can be achieved, as a first step, by nationalisation of the banks and utilities. Secondly, we need to invest in co-operative enterprises which can help to re-build our economy. We need to put restrictions on the limited liability of companies, making it clear that mutuals are our preferred economic model. We also need to protect - yes protect! - our growing industries and build up our industrial base.

3. Alongside this we need to invest in our infrastructure and re-build our welfare state and education system. Of particular importance is social housing. We must allow councils to build and offer secure tenancies and ensure we have an efficient low cost public transport system.

Of course we must do all this is the greenest possible way, built around renewable energy, energy efficiency and the kind of resource efficient manufacturing to be found in Factor Four - see here. This will put us in a position to deal with the worst effects of climate change and peak oil, and help to build a secure and low growth prosperous economy for the future. All these things are possible, if only we hadn't spent £1.4 trillion on propping up the failed financial capitalist system, it would be a lot easier to achieve.

The Shock Doctrine

Have you ever come across 'The Shock Doctrine' by Naomi Klein? Naomi Klein is an author and left-wing activist who first came to prominence with her book 'No Logo', which took a critical look at globalisation. In her book 'The Shock Doctrine - the rise of disaster capitalism' Klein showed how neo-liberal free market fundamentalists have exploited crises to force privatisation and deregulation onto countries which would have resisted if it the population had not been in a vulnerable state. A well known example of this is in Chile, where the Pinochet coup against the democratically elected Allende government created a situation in which global corporations were able take over the economy at the expense of the Chilean people. Its well worth reading the book or at least watching the documentary film. For a starter try this clip on Youtube.

The point is that we are now the victims of the latest 'shock'. The global economic crisis is being used here to impose cuts on public services and the welfare state which would never have been accepted by the British population had the crisis not happened. So, the people who create the crisis not only get away with it, and get us to pay for it, but they also get the opportunity to slash our public services and benefit from the privatisation that will follow.

But what stimulated me to write this was the excellent article that I came across today by George Monbiot. There's no need for me to say more. Read George's excellent analysis of the situation in this post. When you have, you will understand why it has been so easy for the ConDem government to do something the Tories have dreamed of for years - slashing the public sector and the welfare state.

The USA is being destroyed by the market

I've posted before about how neoliberalism - free market economics - is damaging the US economy in this post, but what I saw on Newsnight last evening truly shocked me, and I have no illusions about the capacity of the market to cause destitution and degradation on a massive scale. Take a look at Paul Mason's report about Gary, a town in Indiana, close to Chicago, which has a population of about 100,000, before it disappears off iPlayer.

The report showed a parade on the main street in the 1950's. A broad main street fringed with shops and public buildings, thousands of happy looking (white) people watching and participating with smiling faces. Clearly Gary was a prosperous town with a thriving economy. It had a theatre which could seat 3,000. Frank Sinatra entertained there.

Contrast that with Gary in 2010. A scene of utter devastation. Buildings, including those on that main street empty, falling down, windowless, and roofless, the theatre a crumbling ruin, houses and factories empty and deserted. The place looked like somewhere after a nuclear attack, like a ghost town, except that it's not because 100,000 people still live there amongst the ruins. Most of the inhabitants are unemployed, 80% are black - because the whites who can have fled. The town is bust. Recently, before some federal aid, it had only five functioning police cars. The criminals are better supplied and armed than the police. Areas of town are in pitch darkness because there are no streetlights.

At the state level the Republicans and the Tea Party acolytes are trying to deprive Gary of further public aid. The people of Gary voted for Obama. A horrific Tea Party demagogue spouted about how tax dollars shouldn't go to Gary and how only the private sector could create jobs and re-build the economy. Really? Wasn't it the 'private sector' that brought Gary to its knees in the first place, with privatisation, de-regulation, downsizing, outsourcing, shareholder value, tax cuts, labour market flexibility and most importantly - globalisation?

What is truly terrifying about this is the total indifference to the suffering of communities like Gary. There are pockets of the USA which are as deprived as the Third World. How can this be allowed to happen in America in the 21st century? Hasn't anything been learn't from the horrors of the Great Depression? Apparently not. How any self respecting civilised country could let this happen is beyond my imagination. But this is free market capitalism at work, and its the failure of the market as an economic system, driven by the class-war greed of the super-rich which has brought this about. The tragedy of Gary is no accident - it was deliberately manufactured.

The story of Gary should act as a stark warning to all of us. Just imagine if this was a town in the UK, like Warrington. How could we live with that? Of course most people can't conceive of something like that happening here. But its already happening - we are getting the same treatment as Gary from the ConDem government. For goodness sake people, wake up and smell the rotten stink of the free market before its too late!

The ConDem government is 'ethnically cleansing' the poor

I guess most people have heard about ethnic cleansing. This is the process by which people of another race or nationality have been forced out their homes and made to move across borders. This happened in the recent conflicts in the Balkans, including Kosovo, where the Serbs attacked ethnic Albanians forcing them out of the country. The Serbs used extreme violence including murder and rape to achieve their ends.

I'm not suggesting that the government is about to start murdering and raping the poor but they are happy to use a form of economic violence to force them out of their homes - call it social cleansing if your prefer. The recently announced cap on housing benefit of £400 p.w. will mean that thousands of poor people will have to move out of London. These are not benefit scroungers living in mansions but working families on pitifully low incomes who live in flats with high rents. When they have been driven out of central London it will become a ghetto for the rich.

Where are these people going to go? If you listen to the idiots who post comments on CiF you would think that all they had to do was move to a cheaper house! What house? There is already a housing shortage in this country. The reality is that thousands are going to be made homeless, and when they become homeless they will lose the meagre jobs they had. This policy is going to create a social catastrophe, the like of which we haven't seen since the 1930s.

As if this wasn't enough I hear on the Today programme this morning that the ConDem government wants poor families to have fewer children. The culture secretary, Jeremy Hunt, said that the state shouldn't support "large families". So that's it then? Only the rich should breed? Where have I heard something similar before? It was in Nazi Germany in the 1930's. There the scapegoats for economic failure were the Jews and the homosexuals. In 2010 in Britain it's the poor who are becoming scapegoats for the failures of the 'free' market.

The way forward for the left

Where to start? When did left politics really start? For me it was the 17th Century during the English Revolution - better known as the English Civil War, with people like the Levellers and the Diggers. Since that time there has been the French Revolution, and many exponents of socialism who worked hard to create a better world thorough economic and social equality. In more recent times the Bolsheviks tried through the Russian revolution. Although the Bolsheviks were only one of many left factions during the revolution, they seized power and became the Communist Party. There is too much history to recount in this post but I have no doubt that the vast majority of Bolsheviks were well-meaning people who worked hard and, in many cases, risked their lives to build a socialist society. There are many criticisms we could make of these people with the benefit of hindsight but the point is to keep moving forward and try to determine how we can build socialism in the modern world.

The point of socialism is not just to build a society based on democracy, social and economic justice but to take the majority of people with us and create a society in which everyone can feel fulfilled. The Soviet model failed. Lets not underestimate the fact that it didn't just fall because of internal problems - there were people working very hard from without to bring about its downfall. But the model of central planning adopted in the Soviet Union didn't work. Well, actually, it worked well for quite a while but in the end it didn't cater for peoples needs and aspirations - couple that with a repressive state apparatus and you have a recipe for failure.

So what is the answer? Is it the kind of socialism promoted by Chavez in Venezuela? Building socialism overnight just can't happen, any fundamental change has to be a long term project. I don't underestimate Chavez but I have become convinced after 40 years of involvement in socialist activism and ideas that the way forward is not primarily political. What? Isn't socialism all about politics ? Of course but its also about fundamental change and any fundamental change has primarily to be about creating a new kind of economy - a democratic economy which empowers ordinary people and puts them in charge of their own economic destiny.

Its ironic that it should be Clinton's election campaign that coined the key phrase - "Its the economy stupid!", and that's exactly what it is about. Capitalists control the world because they control the world economy. If we want to break that power we have to put the world's economy back into the hands of the people. You don't do that by state planning. Of course that is exactly what Marx was saying but socialists seem to have lost the point. It's not political power that matters ultimately but economic power.

The way to put the economy back into the hands of people is by mutualism. Democratic co-operatives owned and controlled by workers. There is nothing that capitalist corporations can do that co-operatives can't - and they can do it better. To achieve socialism we have to cut capitalism off at the knees by putting the economy into the hands of the people, not the state. Co-operatives can't be outsourced, they can't be bought and sold like commodities, they benefit not just workers but the communities they operate in. They give people control over their own lives and a real stake in a socialist society. They demonstrate that there is a real and viable alternative to capitalism in terms of wealth creation.

Of course, there is more to it than that. We will still need a state, even if it is just a federation of communities, we need to control the creation of money through state and mutual banks and credit unions, and we will need common services. There is nothing new about it - Robert Owen tried to do it nearly 200 years ago - but it is the way forward. If you want to build socialism now, go out, start a co-op and start creating wealth for yourself and your community. In the end that will do more to create socialism that demonstrations, strikes or interminable meetings.

Austerity is nonsense

If you've been reading my posts about how the bank bailouts and the subsequent debt crisis really means that the rich are screwing the rest of us then you may well be skeptical. Try watching this video from Mark Blyth who is a professor of International Political Economy at Brown University and is writing Austerity: The History of a Dangerous Idea, forthcoming with Oxford University Press in 2011.

WatsonMedia presents Mark Blyth on Austerity from The Global Conversation on Vimeo.

We have already had to pay £1.2 trillion for the bank bailout in the UK now it looks like we'll be paying much more through loss of jobs, public services and welfare... oh and there may have to be another bank bailout of up to £750 billion. Looks like where the Irish lead we may follow.......