What is the Labour Party for?

A lot of people are wondering what the Labour Party is for. Since Ed Milliband became leader its been hard to to tell. But at least we know what the Labour party is not for; its not for the working class, it abandoned them a long time ago, letting the BNP fill the vacuum; its not for decent public sector pensions; its not much interested in housing; or the poor; or trade unions. It is, we know, in the historic words of Peter Mandelson - "intensely relaxed about the filthy rich" and it seems to be pretty keen on the banks; Oh!, and privatisation of the NHS, education, and well, pretty much anything else that moves.

The Labour Party is a party that has lost its way completely. So much so that it doesn't really know what it is for, except perhaps a vehicle for its leaders to get elected and hold political power, a vehicle for career politicians, the political class that I blogged about in this post. That means that it is the job of party members, who presumably think they are part of a project to change things, merely to have a role of furthering the career aspirations of Milliband, Jowell, Balls, Alexander et al.

I'm sure that Ed would be horrified if he read what I'd just written. He'd protest that he believes in a progressive future and that he, and his colleagues, have been traduced by that statement. If he thinks that I'd like to suggest its his own fault, because I think I think those are perfectly reasonable conclusions for onlookers like me to draw, based on the statements, and behaviour of Ed and other leading Labour politicians.

For example, for him to state that the June 30th strike was wrong, on the basis that negotiations about public sector pensions were ongoing, was laughable. It was obvious to all but the most naive that the government wasn't involved  in meaningful negotiations and had no intention of compromising on terms remotely acceptable to the striking teachers and civil servants. Not only that, but it was clear that the government had been hiding the fact that the Hutton Report showed that public sector pensions were affordable, and this had been exposed on the Today programme.

The Labour party has become a right-wing reactionary neoliberal party and there is little to distinguish it from the other neoliberal parties; the Liberal Democrats and the Tories. The reason for this transformation is not difficult to discern. This transformation has happened to 'left' parties all over the world since the collapse of the Soviet Union. Social Democracy has been abandoned in favour of 'free' market globalisation, and the domination of democracies by the multinational corporations and the banks. In fact, this is little different to Fascism. It is only a matter of degree, because Fascism is the subjugation of democracy to capitalist corporations -  with some goose-stepping in uniform, and gratuitous violence, thrown in.

This is what is happening in Greece. Democracy has been openly replaced, under a 'Socialist' government,  by the control of financial technocrats from the EU and IMF, on behalf of their market masters. Our politicians, including Ed,  are complicit in this free market coup d'etat. There is only one way we can stop this. We must stop voting for these people. We need to vote for parties which can stop the rot. In the UK there is only one party of social justice left - the Green Party.

Cheshire West Against the Cuts: J30

On Thursday June 30th striking public sector workers and their supporters came together for a rally at the Town Hall in Chester. We had a  turnout of about 350 people and some very good speeches from trade unionists and CWAC supporters. All in all a very good day for the fightback against Cameron's class war government's attempt to make us pay for the failures of financial capitalism.



There is a lot more work to do but we are building resistance in an area which is hardly renowned for left or trade union activism. Long may it continue.

The Coalition deficit cuts will increase the deficit

On March 26th half a million people marched in London against the savage £81 billion worth of cuts introduced by George Osborne in the 'emergency' budget last year. More recently an impressive (sic!) estimated 350 people attended a 'Rally against debt' on the 14th of May. Not hard to see where the British peoples' sympathies lie then - and the vast majority have got it right because the Coalition government's cuts are not only going to cause great social harm but they are more likely to increase the deficit than reduce it.

How can that be right? How can cuts in expenditure increase a deficit? Well, you only have to look at Greece and Ireland to see how. Both countries are in deeper debt now than they were when they began their austerity programmes. If you slash spending you increase unemployment which increases costs and reduces your income in the form of taxes. The best way to pay off debt is to earn more. Governments earn more if they increase taxes and if the economy grows. As the economy grows government income, in the form of taxes, increases. But the cuts here have lead to a stagnant economy with no growth. There is further bad news to come in the form of increasing unemployment as the cuts bite further. Government borrowing last month was the highest ever recorded for April because tax receipts fell. Osborne has clearly shown his economic illiteracy in the last budget, which did nothing to address the problems caused by these savage, unnecessary, ideological cuts. What our economy needs is a stimulus with investment in jobs through a Green New Deal, not savage cuts.

The same failed course of action is leading to an even greater crisis in the Eurozone where Greece is unable to repay its debt and will have to default at some stage. The effects of this could be even greater than the collapse of Lehmans in 2008. In addition, Ireland, Portugal and Spain are all in trouble. The truth is that none of the bailouts of the Eurozone countries were made to help the people of those countries. They were made to bail out the bondholders and the banks - the money lenders . As with the bailout in the USA and UK, taxpayers are being asked to bear the pain and bail out the market. It is clear where the real power lies, and that's not in your democratically elected government, which exists to serve the market, whatever the cost to you and your family. And if your economy is ruined in the process its just tough luck.

Another Tory budget demonstrates the poverty of neoliberal thinking

I've posted many times on the blog about the current neoliberal paradigm, and the 'free' market fanatics who espouse it. Yesterday we saw a classic neoliberal budget, entirely one dimensional and doomed to failure in terms of doing what the country needs - creating jobs, greening the economy and lowering economic inequality. Its important to understand that if we had a Labour or purely Liberal Democrat government, we wouldn't have seen much difference. All three main parties subscribe to the same 'economic' philosophy - the market must rule - even though its clearly been shown recently that the unregulated market causes boom and bust which only the state can rectify.

Neoliberalism is more akin to a religious cult than a political philosophy and all its adherents, from Blair to Clegg to Cameron to Sarkosy and even Sarah Palin subscribe to the same narrow orthodoxy; only the market can be allowed to do anything. The role of governments is simply to make the market supreme, they are not allowed to intervene, take initiatives, engage in economic planning, or invest in society through public services.

This means that the only economic measures we are allowed to pursue are ones that (big) businesses want - lower taxes and cutting 'red tape'. This is similar to the policy that was followed by Western governments during the last great economic crisis in the 1920s and 1930s - we are going backwards rather than forwards. Suffice to say these policies failed then and they will fail now, leading to at least another decade of economic stagnation, mass unemployment and increasing poverty. The irony then was that it took a world war and massive government spending in the USA, which was the powerhouse of the world economy, to lift the world out of depression and into post-war prosperity.

The neoliberals only have only three economic levers to pull: lower taxes, cutting 'red tape' and labour market flexibility (bashing the workers). These fetishes have already demonstrably failed to make the West more prosperous in the past thirty years. All they have succeeded in doing is making the rich much wealthier and the rest of us poorer. The cunning plan is supposed to be that if you cut taxes on corporations and the rich they will invest more - thus creating more wealth for all of us. Unfortunately the evidence is that this doesn't work. The rich pocket the money and corporations pass it on to their shareholders. Large corporations just don't create jobs anymore, or if they do they invest in low wage economies like China. The wealthy invest in property or financial schemes which bring a bigger return.

We need government investment in our economy. The Green Party has an economic programme which would have cut the deficit by £70 billion over 4 years, created one million jobs and protected the public sector and the welfare state - see our manifesto. Yes, we would have raised taxes but to the same level they were during the Thatcher government - about 43% of GDP. Higher taxes benefit the economy and ordinary people. The public sector generates wealth by investing in society and stimulating private sector growth.

The irony in all this is that the greatest period of wealth and economic equality we had in our history was at a time when we had a mixed economy, strong trade unions, high taxes and a strong public sector. The neoliberal approach only benefits the rich and corporations. The question is - how long can this go on before the penny drops with the majority and there is a real drive for political change? I suspect that we are all going to have to get a lot poorer before the tide is turned.

Public good, private bad

I never thought I would be re-publishing a previous post on this blog, but David Cameron's statement this week that every public service should be privatised made me realise that this re-post was essential. This was posted in April 2009, when we had a new Labour government but it anticipates what a future Tory government would do:

People who have followed the posts on this blog will know that I have been explaining how privatisation benefits the rich at the expense of the poor but it is probably worth pulling it all together in one post so here goes.

Privatisation of public services has been a key part of the neoliberal Thatcherite project of the past thirty years. Privatisation of public services makes the rich richer and the poor poorer. This neoliberal project is all about dumping costs onto the poor whilst creaming off more of society's wealth for the rich.

So how does it work? Quite simple really but it has to be bolstered by one big crucial lie. The lie is that the private sector is always, but always, more efficient than the public sector alternative. No evidence is ever produced for this but it has been repeated so often over the last few decades that most people accept it as a fact. There is evidence though to show that the private sector is not more efficient than the public sector. Here is an example that comes from the International Monetary Fund! (IMF) - see this paper. Here is a quote you might find interesting:

“….the empirical evidence and the theoretical debates do not support this assumption. There is a consistent stream of empirical evidence consistently and repeatedly showing that there is no systematic significant difference between public and private operators in terms of efficiency or other performance measures. The theory behind the assumption of private sector superiority is also being shown to have serious flaws”.

But we do need to consider what is meant by 'efficiency'. Normally it is taken to mean that the private sector can deliver public services at a lower cost - as if that was all that mattered anyway. The fact that the private sector can deliver services at a lower cost is questionable to say the least. But let’s consider what happens when a public service is privatised. A private company moves in and takes over the service and the workforce that delivers it. The company needs to make a profit so the first thing it does is to cut the workforce and lower the terms and conditions of the remaining workers. Workers have their pay, holidays and pensions slashed. The cost of resulting unemployment and low pay is pushed onto the taxpayer and the cost of the profit is pushed onto the remaining workforce. In fact the employer is literally taking money out of the pockets of its new employees and giving it to shareholders - hence a direct transfer of money from the poor to the rich. This is not lower cost delivery it is dumping the costs onto workers and the wider society. Its not efficiency - it is legalised robbery.

But it’s much worse than just this. Because we don't have competing public services (i.e. you only have one waste collector in your local council area) - what you end up with is a private monopoly. Once the public sector alternative has gone what happens if the company providing the service goes bust? Well it has to be bailed out. Why? Because even if you wanted to you couldn't just bring in another company to take over at short notice – wheelie bins have to be emptied. We are also sold a lot of guff about competitive tendering as if hundreds of companies were competing for every public service contract. This simply isn't the case and contracts are awarded to one of a few usual suspects.

What we end up with is a very cosy private monopoly replacing the public service and easy money for the people who own the company. In time, costs can be hiked up to increase profits and all this is at the taxpayer’s expense. No private company could ever compete with an efficient public sector alternative. Why? Because the public sector alternative does not have to make a profit therefore it will always offer better value for money. In addition, the public sector can always borrow money for investment at a lower rate of interest then the private sector which again saves the taxpayer money. The reality is that the most cost effective way to deliver public services is the public sector option. That is the way services should be delivered, paid for collectively by all of us and delivered without the profit motive.

Of course, it is an essential part of the privatisation project that the public sector is excluded from competing with the private sector because it is unacceptable to the privatisers for the public sector to be seen to provide better value for money and competing successfully. That is why everything has to be privatised. And that is why the public sector is now being privatised by stealth - slowly but surely. Once the Tories get into power they will have the confidence to accelerate this process because they will claim that they are eliminating 'public sector waste' and delivering ‘better value’ in a time of budgetary restraint.

Privatisation of public services is basically a racket. Its hard for people to understand that their government would want to institute a system which costs them more, reduces their employment opportunities, dumps costs onto local communities and only benefits capitalists but that is the kind of government we have. That is what New Labour stands for. In the long run we will all have to pay more for less and those who benefit will be the better off.