Privatisation of the Royal Mail is a con

We are being told that privatisation or part privatisation of the Royal Mail will make it more efficient and provide us with a better service. Apparently private sector companies can move in and give us all a better deal.

This is nonsense. Private sector companies have only made inroads into deliveries in the UK because the government has forced Royal Mail to allow them to cherry pick the most profitable parts of its business. That is one reason why it has problems. A while ago had a parcel delivered by TNT. I had to go and collect it because I wasn't in at the time. Instead of going to my local post office - 2 miles away - I had to travel to a bleak industrial estate 16 miles away. It looked like it was situated in crack alley - I didn't feel safe even though it was the middle of the day. The building was an anonymous fortress with an intercom - no one on 'reception'. When I was eventually, reluctantly, admitted I noticed that most of the notices on the walls were in Polish.

What this means is that these companies employ anyone they can get their hands on - at minimum wage rates. Can anyone explain how this 'efficiency' is better for me or workers in the postal industry? It isn't. Its naked exploitation of working people so that the shareholders can rake in the profits.

Give me Royal Mail as a public service anyday with postal workers paid a decent wage. Privatisation is a con. Neither the customers or the postal workers are better off. The only people who benefit are the rich - surprise, surprise. Customers and workers are being shafted. The Royal Mail should be run as a public service, publicly delivered. That is good value for customers and that is what most of us want.

Support the postal workers and public services!

Eyes wide shut

I'm beginning to feel a bit sorry for George Monbiot. Like many of us who are aware of the dangers of climate change he is doing his best to alert people to the problem and suggest positive solutions. But he appears to be banging his head against a brick wall. Whenever he puts up an article on Comment is Free he usually attracts plenty of invective. Eco-fascist is a common term used. It appears that the numbers of people who believe climate change is a fact are diminishing.

I know how George must feel. I've been trying to set up a local climate change group with little success so far. When I was delivering my flyers last week I handed one to a guy who lives down my street. As I turned to leave he called me back. "I'm not interested" he said. Not interested? How can anyone not be interested in climate change? I should have remonstrated with him but I had a schedule to meet.

It seems that many people feel those of us who want to move to a low carbon lifestyle are trying to impose a hair shirt lifestyle on them. Say goodbye to wandering around in your T-shirt and shorts with the central heating on full blast; no more gadgets; having to travel on a bus or train with your fellow citizens instead of luxuriating in the privacy of your own car; cycling to work in the rain etc etc.

I'm not a gadget fiend but like most of us I would be bereft without my Ipod and the internet. But as I pointed out in a previous post life in low carbon economy need not be hair shirt - if we make the changes in time. There are positive benefits too - such as leading healthier lifestyles that would help us deal with problems like obesity, and having stronger communities. We could all do with a bit more cycling and walking and getting to know our neighbours better instead of clinging to the selfish 'benefits' of the consumer age. Who knows I might even get to know the name of the guy down the street.

Consumer capitalism has encouraged us to be selfish individuals. We feel comfortable in our own little fortresses with our circle of family and friends. But things are going to have to change. It ought to be obvious that even if weren't for climate change we can't continue to consume to Earth's resources - including of course oil - and increase our population, as we are doing. There are no magic fixes. Our lifestyles will have to change so lets make the change positive. Transition offers us a way to do that. It offers a practical, common sense and achievable vision of how we can adapt without leading miserable lives. If we don't go down that sort of route the alternative is far, far bleaker - believe me.

Bye bye Tracey bye bye

I guess I'm a bit late on this one but that's because I've been busy. The government intends to impose a 50% tax rate on those who earn over £150,000. That sounds fair to me. The people who can most afford it should be prepared to make an extra contribution in these difficult times - well permanently actually . They, after all, are the ones who benefited most from the unsustainable boom, built on debt and the housing market, during the years of Gordon Brown's Chancellorship. As it is, ordinary hardworking families are being expected to pay for the excesses of the banks during the boom years, and the bankers already have their noses back in the trough to the tune of £6 billion after the £1.4 trillion taxpayers bailout.

But, as you might expect, those who benefited most have no intention of helping out. Tracey Emin, one of those beneficiaries, has threatened to quit the UK when the Tax is brought in in April next year. According to the Sunday Times she is likely to be joined by up to 25,000 others. Well, fine, if they want to go they should go. Some of us can remember that various members of the rich and famous, including Andrew Lloyd Webber, threatened to leave if Labour were elected in 1997. None of them did that I am aware of.

Would we be worse off without these people? The simple answer is no. The capitalist so-called 'free' press have been working hard over the years to persuade us that there is a magic band of people - chief executives and entrepreneurs - who we cannot do without. If we didn't have this master race to look after us we would all be starving. This is complete nonsense, and the excuse for those at the top to take an ever larger slice of the cake.

My Granny, who died at the age of 95, could have run RBS better than Fred Goodwin. She had a deal of common sense and was very good with money. Banking isn't rocket science. You borrow money at 5% and lend it at 6%. Simple as that. A fact that escaped most of the 'masters of the universe' who brought our economy down. There are plenty of able people in our society, many of whom's talents are wasted through deprivation and unemployment. There is no need for anyone to earn over £150,00 a year - period.

The simple truth is that it is the poorest people in our society who pay the most tax. Marginal tax rates for the poor are much higher than for the better off. Let these 25,000 people go. We can do perfectly well without them. In fact our society would be fairer and better if they weren't here at all.

New socialism: how to build a new socialism for the 21st century

If you've read previous posts on this blog, you'll know that I've been blogging about how we build a socialism that will work for the 21st century, just as the Communist Party tried to make socialism work in the 20th Century. In order for socialism to succeed, it's vital to create a viable economic alternative to capitalism, an issue I explored in a previous post. I've also looked at how a socialist government could drive lasting change in our society. Here I want to further explore two key requirements for building socialism. They are:

1. capitalism cannot be replaced politically, it must be overcome economically

2. socialism must empower individuals and social groups to take control of their own lives and communities. The key to this control is economic control.

Real power is economic power. If socialists want to transform society, they must gain economic power. Simply winning political power in elections is not enough. Historically, socialist and social democratic governments have been able to use the power of the state to ameliorate the excesses of capitalism without ever shaking its grip on society. Real power has always remained with those who own the means of production.

The traditional socialist answer to this has been to put the means of production in the hands of the state, thus ending the power of capitalists to dominate society. This didn't work in the Soviet Union - why? Because it didn't fulfill the requirement in 2. above. People weren't empowered economically. They swapped a capitalist employer for a state employer without ever gaining economic control over their own lives. They lacked the incentive to create real wealth for themselves and the communities they lived in.

To gain economic power, socialists need to start creating wealth. Workers create the world's wealth. Marx's development of the idea of surplus value in Das Kapital enabled socialists to understand how capitalists expropriate that wealth for themselves, leaving the crumbs from the cake of wealth creation for the rest of us. To gain economic power, socialists must enable workers to create wealth and keep it for themselves. How can workers do this without becoming capitalists? The answer is mutualism. There is nothing new about this. Robert Owen advocated this 150 years ago. In the UK there are over 4000 successful co-operatives with a turnover of £27 billion. This may be small beer compared to the whole economy but it has the potential to grow.

Co-operatives are socialism in action. They are democratically controlled enterprises in which the workers own the means of production. They create wealth for workers and communities instead of for capitalists. Co-operatives tend to have a greater success rate when started up than capitalist companies. Many socialists feel uncomfortable with the notion of making profits and commercialism of any kind but this is how economies work. Profits can be used to make co-operatives grow and benefit communities. Commercialism does not have to be of the rapacious, dehumanising capitalist variety. One of the historical weaknesses of socialism is that it has failed to meet the aspiration of people to improve their material condition. Co-operatives allow workers to do just that without the need for capitalism.

Co-operatives are social enterprises . They can be not-for-profit or explicitly for community benefit. The key is that workers have control over their own economic destiny, and are able to improve their own and their community's well-being. The beauty of this is that we can do it now. There is no need to wait for a general election or a socialist government. If you want to help to bring about socialism, go out and start up a co-op. Demonstrate that we can create wealth democratically and equitably without the need for capitalism. Co-operatives completely undermine many of the arguments of the right - that socialism doesn't reward individuals or encourage enterprise, and can't create wealth. Every successful co-op diminishes capitalism.

I'm not suggesting that we don't need socialist parties, or trade unions, or that we shouldn't be trying to create a socialist state. But doing those two things without creating a viable economic alternative to capitalism won't bring about a socialist society. I'm in the process of trying to set up a co-op for community benefit in Cheshire, and I'll keep you up to date with developments via this blog. As a socialist, I've no doubt it's one of the most important and useful things I've ever attempted.

Support the Communication Workers!

The recent news that the Communication Workers Union members had voted for a strike a Royal Mail came as no surprise. Support for industrial action was strong with three quarters voting in favour.

The Government has actively been undermining the Royal Mail for some years. Unfortunately, thanks to our so-called 'free' capitalist media the truth hasn't got out. Most people think that Royal Mail is in trouble because of a decline in the sending of letters now that increasing numbers people use electronic means. The real reason is that the government has been encouraging private operators to cherry pick the most profitable parts of the Royal Mail's business. In addition, Royal Mail has been forced to pay these operators peanuts to deliver their mail for them.

If you listened to Mandelson you would think that the gaping £9 billion hole in Royal Mail's pension fund was the fault of the postal workers. But the deficit was caused by the government taking a ten year pensions holiday in which it made no contributions to the fund.

The government intend to privatise the Royal Mail. Nobody except the private operators and bureaucrats in Brussels want them to. Neo-liberal EU legislation is driving the process. Ideology disguised as economics. The end result will be a poorer service, redundancies and pay cuts for postal workers and nice fat profits for the private operators. The costs will be dumped onto the workers - as usual. The communication workers are in a tough spot but they deserve out wholehearted support.

The Party's over

The reasons for the decline of New Labour are obvious. There is no room for two main parties of the right in British politics. The Tories are the party of the right and that leaves New Labour er.. nowhere. The Blairite clones are so addicted to neo-liberalism that they will continue to push the party in a rightward direction. They have no support amongst the electorate but still hold the reigns of power in New Labour. The Labour Party conference did them little good with Brown predictably trying to recover some core support with 'half promises' about scrapping ID cards and electoral reform - too little, too late.

The only logical thing to do is split the party a get rid of the Blairite rump - they can join the Tories if they want to. Only the trade unions can make this happen but they haven't the guts to do so. It is going to take a wipe out at the general election to make that seismic shift remotely possible - otherwise the unholy alliance will continue and leave NL at the margins.

Although New Labour did the right thing by 'big government' intervention to prop up the banks a year ago they are still paralysed by their worship of the market and are unable ideologically to do anything other than return banks that were bust to the private sector thus dumping the costs on taxpayers. They still labour under the illusion that what they are doing is progressive or even social democratic.

Nice to see that Clegg and Cable effed up the Lib Dems conference even more than Brown did New Labour's. Clegg's talk about savage cuts was a spectacular own goal. If Clegg and Cable had any real nouse they would have shifted the Lib Dems decisively to the left in an attempt to wipe out NL as the opposition. But they are just as ideologically trapped in neo-liberalism as New Labour.

If the Labour Party were able to throw off its New Labour shackles and move to the left it would still have a chance of beating the Tories - whose plans for cuts will shift the country even further into the economic mire - but its too late for that. Its a bleak prospect but we can only hope that in a wipe out the Blairites will go down with the sinking New Labour ship.

The Tories are the purveyors of poverty

Tories have a deep love of poverty. Not their own of course but other peoples'. How do I know? Because their policies always make the rich richer and the poor poorer. We have now had 30 years of Thatcherism in the UK. In the early days of the Thatcher government the Tories cynically exploited public concern about industrial action and introduced anti-trade union laws designed to hobble the unions and undermine the ability of working class people to defend themselves. We were told that the trade unions were over-mighty and a threat to our democracy. Tory cuts in the early eighties meant that unemployment rose to over three million. But the real motive was making workers poorer and capitalists richer. Along with this came attacks on the welfare state. Benefits for the unemployed were cut.

Now we find ourselves in an even worse situation. - not that New Labour haven't continued the Thatcherite policies of privatisation and reductions in the pay and conditions of workers - but we are facing an election of a Tory government determined to make us pay for the capitalist economic crisis. The costs of bailing out the banks will be passed onto us. Privatise the profits and nationalise the losses. We are facing the biggest rip-off in British history. The cuts and debt agenda which has taken over the media in recent weeks is a smokescreen designed to obscure that rip-off. Yes there is a crisis, but it is a crisis of capitalism and unemployment. Debt is not the problem, capitalism is.

Eric Pickles - good comedy name that; crap comedy routine, not funny at all, not one bit - was interviewed on Today yesterday. Pickles is a Thatcherite, who like David Cameron is being 'nice' ahead of a general election claiming that the Tories have 'progressive' values. But the Tories are still the nasty party. Behind poster boy Cameron we have not only Pickles but all the other monsters from the crypt of Thatcherism like William Hague. So unpopular are New Labour that the country is sleepwalking into a disaster. As if the Tories offer any hope after thirteen years of New Labour misrule. It is worth following the link to Pickles. If you do nothing else read about his comments of the death of Ian Tomlinson. That reveals the sort of man Pickles is. A man, who like his colleagues has contempt for any kind of social justice and fairness in society.

Time to rebuild the Berlin Wall?

Remember when the Berlin wall came down? It was the end of communist repression in eastern Europe and the subject of much rejoicing. I was amongst the rejoicers but unlike many I was skeptical about what would happen next. Of course the theory was that East Germany, the former GDP, would join West Germany in an age of prosperity after unification. It hasn't happened. Not only that but the 'East Germans' are voting with their feet and leaving in droves.

According to an article in Guardian online by Kate Connolly:

"About 90,000 people a year are leaving to find work elsewhere, typically to the western states, Switzerland or Scandinavia. Some communities are preparing to close down altogether."

Hang on... capitalism is meant to bring prosperity, isn't it? Surely the East should now be as prosperous as the West or getting there? But is isn't, nowhere near it in fact. So why has this happened? Its because when the wall came down and the capitalists moved in - they asset stripped the place and closed down the factories. They were interested in making money, not rebuilding the country. So East Germany has made almost no economic progress in 20 years and there is no sign of it making any. In the GDP there was virtually no unemployment. Now there are no jobs.

So perhaps its about time they rebuilt the Berlin wall to stop all those people escaping from the East. The lesson to be learnt here is that capitalists are only interested in creating wealth for themselves, not for society as a whole. Capitalism creates great wealth for capitalists but poverty for the majority. Thats how capitalist economies work.

Tories plan public services lite

We know that if the Tories get into power there will be swinging cuts in public services. The Taxpayers Alliance, a bunch of Tories who claim that they represent taxpayers, and the Institute of Directors (IOD), are pressing for cuts of £50 billion according to an article in the Guardian today. The simple question is who will benefit from these cuts? The answer is the better off, including no doubt company directors. This is just another example of making the poor poorer and the rich better off. But its not just the poor who will suffer. The vast majority of us rely on public services and we will all lose out as a result if these cuts are implemented.

Of course the cuts are being demanded because of government debt which has soared because taxpayers have been asked to stump £1.4 trillion up to bail out the banks. Who caused this problem? Capitalists. Who is being expected to pay to prop up the bankers and their bonuses? We are. I wonder how many of these bankers are members of the IOD?

But just think about this. The bankers cause a crisis. We pay to bail them out by er.. borrowing money from them and getting into debt. That's nice work if you can get it. They must be laughing all the way to the er... bank.

In addition we are told that the Tory wunderkinds in local government have come up with a number of wizard wheezes to help meet our debt problems by giving us public 'services' lite. Cunning plans to save money include allowing people to jump queues for things like planning permission if they pay more for the privilege. But the whole point of public services is that we all pay taxes and we all get equal access to those services. Who benefits? The better off. Beginning to see a pattern? Cuts mean that the costs of the bankers recession will be dumped onto the poorest and most vulnerable people in society.

The Tories are the party of the rich. Always have been and always will be. When in power they look after their own. If only the Labour party could do the same. Well actually New Labour are also the party of the rich and have been doing a pretty good job of looking after their own so far. It is madness for ordinary people to vote for the very people who are exploiting them. But that looks like what is likely to happen next May. Its high time the left fought back. John Cruddas called upon the Labour Party to re-discover itself. Personally I don't trust him. But if he can help to get Labour back to social democracy that will be a step in the right direction. In the meantime the only party with policies to defend public services and help anyone but the rich is the Green Party.

Stalin and Hitler and the Second World War

There's been a lot of controversy about Josef Stalin recently. In Eastern Europe, as they commemorate the beginning of the Second World War 70 years ago, there has been a right royal row going on about how Stalin was as bad as Hitler, and therefore the Soviet Union must have been as bad as Nazi Germany. The Poles have been trading verbal blows with the Russians. The zealots of the right would have us all believe that the Soviet Union was equably to blame with Nazi Germany for the war. But it wasn't, and Soviet communism was in no way equivalent to the Nazism.

Stalin was a brutal dictator who did immense damage to the Soviet Union. On the eve of the war he authorised a secret non-aggression pact with the Nazis - the Molotov-Ribbentrop Pact . Its worth quoting from the Encyclopaedia Britannica article about the pact:

"The Soviet Union had been unable to reach a collective-security agreement with Britain and France against Nazi Germany, most notably at the time of the Munich Conference in September 1938. By early 1939 the Soviets faced the prospect of resisting German military expansion in eastern Europe virtually alone, and so they began searching about for a change of policy"

The pact was a pragmatic, if cynical, piece of diplomacy on the part of the USSR because it divided eastern Europe into spheres of influence, including the division of Poland. But at the time there must have been doubts that the USSR could resist a German invasion. Following the outbreak of war the USSR carried out a massacre of Polish army leaders and intellectuals at Katyn. Non of this is forgivable but it does not mean that Soviet communism was as bad as Nazism.

Some people would have us believe that a simple body count is all you need to decide if one regime was as brutal and corrupt as another. But nothing in politics or history is that simple. Stalin was responsible for the deaths of millions in the Soviet Union. Many of those people were good communists who had supported the revolution. In the 1930s leading Bolsheviks such as Zinoviev were eliminated by Stalin in a series of show trials. Zinoviev and the others confessed in open court that they were counter revolutionaries. They undoubtedly did this because of torture but also, I believe, because they wanted to preserve the revolution and believed that in the longer term they would be exonerated.

After Stalin's death the new Soviet leader Khrushchev denounced Stalin and exonerated those who had been executed. Lenin in his last Testament said that Stalin should have been removed as general Secretary of the Communist Party. Stalin was condemned by Soviet communists.

So where does that leave us with Hitler and Stalin? Hitler embodied Nazism. He was the only leader of the Nazis and responsible for policies which lead to the murder of six million Jews, and many hundreds of thousands more socialists, communists, homosexuals and Roma. The total has been estimated at somewhere between eleven and seventeen million. He was the undoubted aggressor in the Second World War. He has never been denounced by any of the the Nazi leaders or their successors. In fact he is revered by them.

Twenty million Russians died in the Second World War. That is very hard for us to begin to imagine. That is why they call it the Great Patriotic War, and that is why Stalin is still seen by some in Russia as a great leader. Winston Churchill was a fervent supporter of the British Empire - how many people died because of the Empire? In fact there was no doubt that as Prime Minister during the Second World War one of his main aims was to preserve the Empire. He also deployed troops against striking miners in 1910. He is still regarded with respect in Britain as a great war leader.

Its high time to tame the market

Well, at last a regulator has had the guts to say we should rein in 'free' market financial capitalism. Not only that but he said that much of what it does is "socially useless". Of course it is perfectly possible to argue that all it does is socially useless, and unnecessary to boot. Lord Turner, head of the Financial Services Authority (FSA), had the nerve to suggest that financial transactions should be taxed. It would be better if most of those transactions were eliminated all together, and lets not forget that it was 'light touch regulation by the FSA, lauded by Gordon Brown, that lead to the economic crisis in the UK.

Of course there were predictable howls of rage from the British Bankers Association and plenty of flak from so called 'economists'. I understand that Lord Turner is a wealthy man. That's good for him because his comments amounted to a resignation letter and I don't doubt that he will soon be receiving his P45. Deputy business Editor of the Sunday Independent Simon Evans weighed in with an article entitled 'Turners anitdote would kill, not cure, the city" - lets hope so. Evans is typical of the conventional business media hacks who marvel at the market in the good times, then expect the state (i.e socialism') to ride to the rescue when the excesses of greed threaten chaos. He says that "failing to save Lehman's last year was a terrible mistake" - but why should taxpayers be expected to prop up the rich who serve no socially useful purpose. Those who live by the sword should die by it. He then goes on to say "But I don't know how to temper the City's greed" and rubbish any idea of a Tobin tax.

Well Simon, some of us do know how to temper the greed of capitalists. The intervention by the state, in the UK to the tune of £1.4 billion of taxpayers money, was the right thing to do in the short term. The rotten system of financial capitalism needed to be propped up to prevent greater harm to the people of the UK. But that was a first step. It should have been followed by the nationalisation and break up of the banks. Along with mutual societies such as credit unions, the state, subject to democratic control, should have a monopoly of credit, and banking services. The financial services sector has had a history of malpractice and ripping off the British people. Remember the mis-selling of pensions and endowment mortgages, and the ridiculous charges that they levy on ISAs and overdrafts?

We are being taken for a ride. Capitalist banks are socially irresponsible institutions who believe they should only be answerable to the market and not wider society. When they crash we suffer the consequences. Of course the imposition of any tax on financial transactions in the UK would make these money grubbers flee abroad. That is what they always threaten to do if democratically elected governments don't do as they are told. That is why we need international socialism to bring these people down. We need to assert control over our own lives by putting democracy above commercial interests, and ending the domination of the capitalist exploiters. That is what socialism is all about.

The rabid free market right is bringing America down

Is America still a superpower? In military terms it still is but can the USA continue to be a dominant force politically and economically? Much depends on what happens in the next few years after the recent crash brought about by free market financial capitalism. The US economy is in dire straits and there is no sign of where a revival is going to come from - as I described in this post.

The great irony here is that those who would make America great are largely responsible for this situation. The rot started with the election of Richard Nixon in 1968, but really got going with the election of Ronald Reagan in 1981. Reagan's election ushered in a generation of domination of US politics by the free market right. Neoliberals - that is right wing Americans who adhered to the idea of American supremacy as a global superpower and the untrammeled operation of the free market - the Washington Consensus - through globalisation and bodies like the IMF and WTO - became the dominant force in American and global politics.

Reaganomics consisted of tax cuts for the rich, privatisation and de-regulation but also involved increased military spending and budget deficits. Taxes for the rich were lowered from 70% to 28% whilst the national debt increased from $700 billion to $3trillion. This was 'trickle down economics', the 'theory' being that as the rich had more money in their pockets and businesses were freed from 'red tape' by small government, the benefits would eventually reach the bottom of society. Predictably, they didn't.

Reagan was followed by George Bush, Bill Clinton and George W Bush. Despite the election of a democrat, Clinton, in 1993, little changed. The free market right still dominated and Clinton followed suit. The Project for the New American Century was typical of right wing neoliberal American thinking and had a great infuence on the government of George W Bush, notably on the invasion of Iraq in 2003.

The election of Barak Obama last year has given Americans hope that a generation of selfishness and greed can be tempered by social justice. But many on the right refuse to accept democratic change, just as they did when Clinton was elected and they tried to bring him down over the Lewinsky affair. Now they have retreated into ever more bizarre and rabid rantings. One of the wackier manifestations of this are the 'birthers' who believe, despite the facts, that Obama isn't American and therefore can't be President. We have recently had to contend with crazy remarks and lies about the NHS because of Obama's healthcare plan.

So what has neoliberalism achieved for America? Greater intolerance, injustice, inequality, debt, and poverty for many of its people. A loss in standing for America in the eyes of the global community. But most of all economic decline. Those whom the gods wish to destroy they first make mad (ancient proverb) - maybe the birthers are just the start. Is this the beginning of the end for the USA?

As freedoms for capitalists increase we get more restrictions

The 'free' market is getting freer. With de-regulation for businesses still going full steam ahead the freedoms of citizens are narrowing. New Labour have introduced over 3000 new offences since 1997. We have ID cards and a plethora of 'ant-terrorist' legislation including more restrictions on the the right of assembly. Even peaceful greens can't get together for a summer festival.

But we are constantly being told that there are too many restrictions on business. That business is being strangled by red tape. Pity the government doesn't take the same view with its citizens (er... we're all subjects really). As the effects of de-regulation, privatisation and the banker's recession take hold we can expect more criminality. Poverty will increase as capitalists try to maintain profits. Unemployment will rise. The government will have to manage greater discontent, not least about the rotten state of our democracy.

Fortunately for the next government New Labour have put in place the restrictive apparatus to criminalise and contain dissent. Is this a co-incidence? I don't think so. With reactionary governments who feel comfortable about the filthy rich, and greater inequality we will see more discontent. The powers are in place to ensure that the discontent can be contained.

Capitalism isn't working

In the past 40 years or so productive capitalism has been overtaken by financial capitalism. By productive capitalism I mean the 'real economy' which includes the production of commodities such as manufacturing and services. Financial capitalism centres around money making money and includes finance, insurance and property. How did this happen? The formation of large corporations - monopoly capitalism - at the turn of the 20th century lead to the generation of massive surpluses. Some of this money was re-invested in production but the sums were so large that there simply wasn't enough productive capacity to invest in. Investors had to find other outlets for this money. Hence the massive increase in size of the banking and the financial sector in the later part of the century.

The reason is that mature capitalist economies have been suffering from stagnation for sometime. America was lifted out of the Great Depression by the spending on the Second World War and the postwar boom happened because rising wages allowed people to spend more stimulating demand for goods and services. The problem with consumer capitalism is that it doesn't work if people can't afford to buy products. Since the boom came to an end in the 1970s stagnation has been the norm. The billions sloshing around have been invested in finance and financial products and we have seen a series of speculative booms and crashes, each one worse than the last. We've had the 1987 stock market crash in the US, the Asian financial crisis, stagnation in Japan, a banking crisis in Sweden, the Dot Com boom in 2000 and now the so-called Credit Crunch.

After the Dot Com boom the weak recovery in the USA was dependent on very low interest rates and booming credit, fuelling the house price bubble which began to burst in 2007. We haven't seen the end of this crisis yet by any means. What is going to lead to a recovery? With falling incomes in the USA, mass unemployment and lack of credit - nothing. The only thing that can is another boom - but where is that going to come from? Its no good expecting China to lift us out of this. They have to have a market to sell their products and the USA provided that market, but how is it going to now?

Looking back we can see that the periods of prosperity for ordinary people in the last hundred years or so were aberrations rather than the norm. As capitalists try to squeeze wages further to boost their profits demand will continue to fall leading to further stagnation. The USA is unlikely to be able to lift the world economy out of this stagnant state. The message is that capitalism doesn't work well - even for capitalists. For the rest of us its even worse, and won't ever get better. Meanwhile vast sums of money - trillions of dollars - are chasing speculative gains when they could be spent on useful things like providing all the people on the planet with clean water to drink and adequate housing. Capitalism is an iniquitous and unsustainable economic system artificially maintained by a set of rules which could be changed democratically at any time. Now is the time to make those changes

Can't tell left from right

Some people can't tell left from right. This can be a real danger when driving. I wonder if James Purnell drives a lot, if so he should be careful because he clearly suffers from this problem. He thinks he's on the left of politics but he isn't. He's been a member of a New Labour centre-right government for long enough that he ought to know that his Party espouses reactionary causes. Like uncritical worship of the 'free' market. Lets take as an example his very own recent so-called welfare reforms which I posted about here. They represent the 21st century version of the workhouse. Rabid right-wingers like the American Rush Limbaugh would have been proud of what Purnell has done. I used Limbaugh as an example because New Labour love to copy the policies of the American right. That is where they get most of their ideas from. Progressive governments protect workers and the unemployed against the malign effects of 'free' market capitalism, they don't batter them as Purnell has done.

If you want to know how how 'left-winger' James Purnell voted on key issues since 2001 you can get this information from theyworkforyou.com:

* Voted moderately for a transparent Parliament
* Voted moderately for introducing a smoking ban
* Voted very strongly for introducing ID cards
* Voted very strongly for introducing foundation hospitals
* Voted strongly for introducing student top-up fees
* Voted very strongly for Labour's anti-terrorism laws
* Voted very strongly for the Iraq war
* Voted very strongly against an investigation into the Iraq war
* Voted very strongly for replacing Trident
* Voted moderately for the hunting ban
* Voted very strongly for equal gay rights
* Voted moderately for laws to stop climate change

So I was interested to read Purnell's latest contribution to the 'progressive' debate in the Guardian with interest. He says that "We learned the lesson that we should use markets or the private sector where they achieved the relevant outcome". He doesn't say "right outcome" just "relevant". But the only outcome of New Labour's privatisation programme has been greater poverty for for workers, a more unequal society and a lessening of opportunity for the poor, working class, and middle class. You cannot pursue policies of privatisation and call yourself 'left' or 'progressive' because the outcome is neither left nor progressive. This is the paradox of New Labour - talk about creating a better and more equal society then follow policies which lead to exactly the opposite. Create greater inequality then find a sticking plaster to put on it- like SureStart. The New Labour acolytes are being either dishonest or stupid.