Bombardier ruling exposes stupidity of anti-EU claims of left and right

September 27, 2017 at 10:37 am (Brexit, Canada, capitalism, economics, Europe, internationalism, Jim D, nationalism, populism, United States, workers)

People work on a C Series aeroplane wing in the Bombardier factory in Belfast, Northern Ireland September 26, 2017
Above: Bombardier workers at the Belfast plant

America’s Department of Commerce has made a preliminary finding that the Canadian company Bombardier had received unfair state subsidies and sold below cost.

It has now imposed a 219.63% countervailing duty on Bombardier’s new commercial jets, putting thousands of jobs at risk. Bombardier, the largest employer in Northern Ireland with a workforce of 4,100, describes the contract as “critical” to its operations.

The US International Trade Commission will now consider the case ahead of a final ruling in February.

The dispute centres on the sale of 125 C-Series airliners, the wings for which are made in Northern Ireland.

Boeing alleges that the subsidies Bombardier receives from the UK and Canadian governments mean it is launching its new C series jets below cost in the US, and so the US trade authorities should impose tariffs.

Boeing had accused its much smaller rival of “price dumping” to win a lucrative contract from the American carrier Delta. The US aerospace giant claimed each jet cost $33m (£25m) to produce, but that Bombardier had sold them for $20m (£15m) each.

Bombardier also disputes claims that support it had received from governments – £75m from the UK and $1bn (£745m) from Quebec was illegal.

Bombardier says Boeing’s position is hypocritical and absurd – hypocritical because Boeing prices its new planes very cheaply at launch, and because Boeing has received huge subsidies from the US government over the years; and absurd because Boeing is claiming to be damaged by Bombardier’s sales even though Boeing does not sell any competing planes of a similar size and has not done so for a decade.

Canadian Prime Minister Justin Trudeau has now said the Canadian air force will not buy Boeing’s Super Hornet jets from “a company that’s busy trying to sue us and put our aerospace workers out of business.” Theresa May, in turn, has said she will raise the issue with the famously protectionist Donald Trump when she grovels to him later this week at the UN.

This case provides a classic demonstration of the stupidity of those (on both left and right), who try to make out that the EU is the major obstacle that a British government faces (or would face) if it tried to give state aid to particular industries. Both supporters of Theresa May’s “industrial strategy” and of Jeremy Corbyn’s interventionist industrial policy have suggested that, when the UK leaves the EU, it will have greater freedom to apply state aid. But in a capitalist world, state aid may still come into conflict with new trade deals if one side or the other decides that such government intervention provides a legitimate reason to impose tariffs.

Some sectors of the economy (of which aerospace is just one) have very significant government involvement almost by their nature. In such cases it may be very difficult to treat trade disputes as “purely commercial” matters. As things stand, it will be the US trade authorities that decide on the Boeing-Bombardier dispute.

In any future US-UK trade deal, would we want US and UK courts deciding these matters, or would some joint arbitration body be a better way to adjudicate? This issue places May and the Tory anti-EU fanatics in a very difficult position, given their hostility to the ECJ and (presumably) any other supranational court with national jurisdiction.

Maybe post-Brexit the little-Britainers of left and right will stop complaining about “Brussels” interfering with national governments and start complaining about “Washington”, “Geneva” … and, indeed “the rest of the world”?

  • JD acknowledges the use of information from a piece by Andrew Lilico at City A.M. in the preparation of this post.

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Climate chaos and capitalism

September 17, 2017 at 6:50 pm (capitalism, climate change, Marxism, posted by JD, science, United States)

Hurricane Irma barreled into Florida as a Category 4 hurricane after leaving a trail of destruction on islands and island chains in the Atlantic. Less than two weeks before, Harvey caused a catastrophe in Houston and along the Texas and Louisiana Gulf Coast.

In both cases, it’s obvious how the priorities of capitalism made these natural disasters so much worse. But what can be done about it? Below is a speech, edited for publication, by Paul Fleckenstein given before Irma reached Florida–at a meeting of an International Socialist Organization chapter at the University of Vermont. The transcript was first published on the (US) socialistworker.org website:

Hurricanes Katia (left), Irma (center) and Jose (right) all visible in a satellite imageHurricanes Katia (left), Irma (center) and Jose (right) all visible in a satellite image

WE ALL witnessed two catastrophic storm events in the past two weeks, and a third, Hurricane Irma, is heading through the Caribbean toward southwestern Florida, where I used to live.

The weather catastrophe that got the least attention in the U.S. was the extreme rainfall in South Asia over the last several weeks as a result of the worst monsoons in decades. One-third of Bangladesh is underwater, and there are over 1,400 reported deaths in Nepal, India and Bangladesh. And this is just the beginning. Millions face a longer-term crisis of hunger and lack of access to drinkable water.

In the U.S., Hurricane Harvey produced record rainfall in Houston (50 inches), caused more than 60 deaths, flooded 100,000 homes and forced 100,000s of people to flee floodwaters.

As Houston resident and SW contributor Folko Mueller wrote, “It will take weeks, if not months, for the city to recover. We can only guess how long it may take individuals to heal from the emotional and psychological distress caused by having lost loved ones or their homes.”

The Houston area is home to 30 percent of the oil refinery capacity in U.S., along with a heavy concentration of chemical plants. There were massive toxic releases from industrial plants into air and water–even by the standards of industry self-reporting, which means systematic underreporting.

Explosions rocked the Arkema plant in the Houston suburbs that produces stock chemicals for manufacturing. It will be many years before we know the full magnitude and effects of this and other releases that took place during the disaster.

– – – – – – – – – – – – – – – –

TO UNDERSTAND and learn from this crisis in Houston, we need to begin with the fact that Houston is a prime example of capitalism in the 21st century.

It’s a city, like others, built around extreme wealth disparities–with immigrants, people of color and the working class as a whole often relegated to the most environmentally dangerous areas. It has its own cancer alley along the Houston Ship Channel, which was, of course, swamped by Harvey.

The area is home to oil refineries owned by all the giant energy firms, from ExxonMobil, Shell and Marathon on down. Houston was the global capital of the oil industry in the 20th century and is still that, which means its elite had an outsized responsibility for global warming.

A city without zoning, Houston has been left to real-estate capital as a super-profit center. Because of the unrestricted development, wetlands and prairie that provide natural storm buffers were paved over with impermeable surfaces. Quick profits were made from building in low-lying areas.

A similar dynamic took place in South Asia with “land reclamations”–filling in wetlands to build mega-cities. As SW contributor Navine Murshid pointed out, the word itself “speaks to the entitlement that capitalist developers feel with respect to the earth.”

Houston had an estimated 600,000 undocumented workers running key sectors of the city’s economy before Harvey, and immigrant labor will be critical to rebuilding. Yet Texas’ anti-immigrant law SB 4, which deputizes state, county, city and campus law enforcement officers as immigration agents, was supposed kick in during the middle of the disaster, scaring many immigrants away from seeking aid.

The city has been devastated by hurricanes before. A ProPublica article published last year found that it was a matter of time before disaster struck–meanwhile, 80 percent of homes flooded by Harvey don’t have flood insurance.

Even for capitalists, there is a carelessness about the making of Houston that is remarkable. One-third of U.S. oil-refining capacity was shut down during the Harvey crisis, and half of all capacity is located in this region that is vulnerable to storms. These are the plants and facilities that send fracked natural gas and refined oil products around the U.S. and the world.

– – – – – – – – – – – – – – – –

THE PHYSICS of severe weather today is pretty simple. A warmer atmosphere holds more water and more energy, providing the fuel for bigger and more intense storms. More severe storms are a certainty as a result of man-made climate change.

And the trend of superstorms, extreme heat events and droughts–of extreme weather events in general–is going in the wrong direction, toward greater instability and extremes. Harvey, therefore, gives us a sobering glimpse of the future.

Naomi Klein, the left-wing author, is right that now is the time to talk about climate change–and after Harvey and Houston, it is necessarily a time to talk about capitalism.

I want to sketch out a basic Marxist understanding of the capitalist roots of the climate crisis. For everyone dedicated to fighting against climate change, Marxism is a great starting point, beginning with the contributions of Karl Marx and Frederick Engels in the 19th century.

As Marx observed in the mid-19th century: “Man lives on nature–means that nature is his body, with which he must remain in continuous interchange if he is not to die. That man’s physical and spiritual life is linked to nature means simply that nature is linked to itself, for man is a part of nature.”

Marx and Engels noted that this unity with nature is ripped apart by capitalism through a “metabolic rift”–a separation that deepened and further developed under capitalism, where a small minority of the population controls all major aspects of the economy.

Capitalists are driven by competition to single-mindedly seek more profits. The free market imposes the drive to accumulate on individual capitalists, which results in a focus on short-term gains that ignores long-term effects of production. As Engels wrote:

As long as the individual manufacturer or merchant sells a manufactured or purchased commodity with the usual coveted profit, he is satisfied and does not concern himself with what afterwards becomes of the commodity and its purchasers…

The same thing applies to the natural effects of the same actions. What cared the Spanish planters in Cuba, who burned down forests on the slopes of the mountains and obtained from the ashes sufficient fertilizer for one generation of very highly profitable coffee trees–what cared they that the heavy tropical rainfall afterwards washed away the unprotected upper stratum of the soil, leaving behind only bare rock!”

At the heart of capitalism is wage labor. Workers are compelled by the need for work to survive to carry out the labor that drives the system–including its most destructive operations, like the drilling platforms or the chemical factories.

In fact, the workers who do this particular work often best recognize the ecological consequences involved–and, unfortunately, experience many of the most dangerous ones. It makes perfect sense that the Oil, Chemical and Atomic Workers International Union spawned a radical labor leader like the late Tony Mazzocchi.

For Marx, the alternative to capitalism’s destructive system was a democratically planned economy: socialism–by which he meant “the associated producers rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favorable to, and worthy of, their human nature.”

Capitalism is driven by the perpetual need to produce more profit, or it snowballs into recession and crisis. So it isn’t enough for scientists to develop new technologies that could create a sustainable world. They have to be put to use, and under capitalism, they won’t be unless it is profitable to do so.

– – – – – – – – – – – – – – – –

IF WE need a radical reorganization of society, then environmentalists must set their sights not just on changes within the capitalist system, but ultimately on the abolition of capitalism itself. To avoid ecological catastrophe, we need a society based not on competition and undirected growth, but on cooperation, economic democracy and long-term sustainability.

Marx offers a compelling vision of such a society in the final pages of his three volume work Capital: “Even an entire society, a nation or all simultaneously existing societies taken together are not owners of the earth, they are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations.”

Is it possible to reform the current system to achieve this goal? Why can’t oil and chemical corporations at least be regulated so they are not toxic polluters? They should be regulated–but environmentalist and author Fred Magdoff explained why we can’t count on this under the existing system in an interview with SW:

The companies fight against regulations, and if they see that they’re going to pass, they try to get them watered down. And then, if they actually go into effect, the companies try to make sure they aren’t very well enforced. So even if the regulations exist and are meaningful–which is rare–the industry finds ways to get around them.

Often, the fines for violations aren’t very much. You could have a good regulation, and a company violates the regulation, and they pay a thousand-dollar fine or a ten-thousand-dollar fine. For them, what’s the difference?

This is part of why reforms can’t be counted on to save the planet: At the end of the day, capitalist corporations and the pro-business parties running the government will prioritize profits over anything that would reduce them, even by a small amount.

This isn’t only true about the U.S. government under Trump. Barack Obama came into office in 2009 promising radical steps to address climate change. Instead, under his presidency, the U.S. ramped up fossil fuel extraction and processing to deliver cheap energy to U.S. manufacturing so it could better compete globally–and to turn the U.S. into a net oil and gas exporter.

Obama helped undermined the Copenhagen climate change summit less than a year into office, ran cover for BP after the company’s Deepwater Horizon disaster in the Gulf of Mexico and bragged to oil company executives about laying enough pipelines to ring the planet.

– – – – – – – – – – – – – – – –

FOR SOCIALISTS, there are at least two sides of this fight that we have to take up.

One is the struggle for justice in the aftermath of “natural” disasters. The establishment will take advantage of every crisis to further its agenda of privatization, accumulation and gentrification, furthering the oppression of people of color and the working class.

Naomi Klein called this the “Shock Doctrine,” and it played out in New Orleans after Hurricane Katrina in 2005, with mass permanent displacement of African American workers–many of whom ended up in Houston–privatization of the schools and the abolition of the teachers union, although unions are reorganizing today.

We want rebuilding to guard against future floods and disasters–and to take place on the basis of racial justice and equal rights for all, including for all immigrants, regardless of legal status.

Second, we have to fight against fossil fuel extraction and for renewable energy alternatives–which means both protesting pipeline construction and joining with struggles that improve and expand public transportation.

But as we struggle for these short-term measures now, we have to raise the question of capitalism and need for socialism at the same time with everyone we organize with. Our project is for reform and revolution.

If we are organizing with institutions and people where raising the need for a socialist alternative can’t be done, then we are probably organizing in the wrong place–and likely an ineffective place as well.

Meetings and campaigns involving Democratic Party politicians are a prime example. Another is the behind-the-scenes strategies to persuade university committees that claim to be considering fossil-fuel divestment. Their loyalty, at the end of the day, is to business interests–unless they feel the pressure of a struggle that will expose them.

There is certainly no simple answer here. But a socialist strategy that prioritizes mass, democratic organizing; free and open discussion and debate on the way forward; and dedicated struggle for immediate gains, without sacrificing a commitment to the bigger goals, has the most promise.

And if we can build up the politics of socialism and socialist organization among wider layers of people involved in these struggles, that will open the possibility of the system change that we need to find our way out of climate disasters.

There is widespread understanding of the urgency for action now to stop climate change. We don’t have endless generations. CO2 levels will continue to climb despite the scientific consensus that this will have catastrophic consequences for the planet.

But the technology does exist to radically reduce greenhouse gas emissions, as does the science that can be put to use in mitigating the impacts of past carbon emissions–if the system’s priorities were radically changed.

Anyone who thinks we need system change needs to be dedicated to all the struggles for change today–and to arm themselves with the contributions of Marxism toward understanding the roots of the crisis and the alternative to it.

Our struggle for socialism is literally a struggle for the future of the planet.

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The global banking crisis – ten years on

August 9, 2017 at 8:25 am (banks, capitalism, capitalist crisis, economics, history, Marxism)

Ten years ago, the worst global financial crisis financial crisis since the 1930’s began. Major companies went bankrupt, people lost their homes on both side of the Atlantic, and the banks that were too big to fail, did fail – only to be rescued with taxpayers’ money.

Governments and their financial regulators were completely wrong-footed and found themselves lacking the regulatory framework to mitigate the crisis and to prevent it from spreading.

Martin Thomas surveys the path, the causes and the sequels of the crisis.

The story started in finance. In June 2005 mortgage interest rates in the USA started rising sharply. They levelled off and declined after July 2006, but in the meantime house prices had reversed their giddy rise of previous years. House prices would continue to fall until January 2012, when they would be on average 33% down on their May 2006 peak. From mid-2006 the proportion of deliquent mortgagees (those with payments seriously overdue) rose, and it would keep rising until early 2010.

By late 2015 around six million households would have their homes foreclosed (CoreLogic 2015). Unlike, for example, the UK house-price crash of 1989-92 (in which about 188,000 homes were repossessed), the US mortgage crash fed into a financial, industrial, and international crash. It revealed that “the bond bubble [had been] by no means limited to mortgages. It was ubiquitous”. Building on the mortgage bubble, “risk spreads were irrationally small”, i.e. small extra revenues had been needed to attract buyers to risky securities, and so once financiers realised those securities were risky, their prices were likely to drop sharply. (Blinder 2013, p.45-6, 90-1).

On 9 August 2007, a French bank, BNP, told holders of stakes in three of its investment funds that they could not have their money back. The bank held mortgage-backed securities — bits of paper which entitled holders to a slice of the income from payments on mortgages made in the USA — and now, as one financier put it, those “securities… simply [could]n’t be priced because there [was] no trading in them. There [were] no bids for them. Asset-backed securities, mortgage loans, especially subprime loans, [did]n’t have any buyers” (Bloomberg 2007). The freezing of credit flows between banks escalated.

On 14 September 2007 queues of people fearing collapse and wanting to get their money out formed at the branches of a British bank, Northern Rock; the British government nationalised the bank in February 2008. Read the rest of this entry »

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100 years on: the hell that was Passchendaele

July 31, 2017 at 7:43 am (capitalism, Europe, hell, history, imperialism, posted by JD, war, workers)

More than 271,000 men from the ‘British and Dominion’ forces killed or wounded and German losses of 217,000. Many drowned in the mud or died in agony because stretcher-bearers could not reach them. The third and final battle of Ypres (Passchendael) began 100 years ago and went on for three months. The British and Dominion forces gained five miles in total.

Memorial Tablet
By Siegred Sassoon

Squire nagged and bullied till I went to fight,
(Under Lord Derby’s Scheme). I died in hell—
(They called it Passchendaele). My wound was slight,
And I was hobbling back; and then a shell
Burst slick upon the duck-boards: so I fell
Into the bottomless mud, and lost the light.

At sermon-time, while Squire is in his pew,
He gives my gilded name a thoughtful stare:
For, though low down upon the list, I’m there;
‘In proud and glorious memory’ … that’s my due.
Two bleeding years I fought in France, for Squire:
I suffered anguish that he’s never guessed.
Once I came home on leave: and then went west…
What greater glory could a man desire?

*****************

“We’ve had 70 years without major war. I hope we remember that we need to work together in Europe” – Mike Copeland, veteran’s son, yesterday.

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Grenfell Tower: ruling class criminal negligence

June 15, 2017 at 9:55 pm (campaigning, capitalism, class, Conseravative Party, crime, hell, Human rights, Jim D, Tory scum, tragedy)

“People were waving scarves, flashing phones, torches, flapping their windows back and forth, crying for help … At first people [on the ground below] were trying to help them, pushing at cordons. I could see the smoke billowing behind them and in some cases I could see the flames, until they disappeared … [by 4am] there was no sign of life. Everyone was in a resigned state of shock. We couldn’t do anything and we were coming to accept the fire brigade couldn’t do anything either … I’ll never forget the sound of those screams: the screams of children and grown men” (would-be rescuer Robin Garton, quoted in The Times).

The faces look out from the newspaper, smiling in happier times. Many of them black or Middle Eastern with names like Khadija Kaye, Jessica Urbano  and Ali Yawa Jafari. But also Sheila Smith and Tony Disson. Then you read about people throwing their children out of high windows in the hope that someone would catch them, people jumping (some on fire) to almost certain death (shades of 9/11) and mother of two Rania Ibrham sending a Snapchat video to a friend who described it: “She’s praying and she’s saying ‘Forgive me everyone, goodbye’.”

This all happened in 2017 in one of the wealthiest boroughs in London, under a Tory council and a Tory government. But these people weren’t wealthy: they were amongst the poorest in the city, living cheek by jowl with people of enormous wealth.

It turns out that the local residents’ group, the Grenfell Action Group, had repeatedly warned the council and the so-called Tenant Management Organisation (ie the landlord) that a disaster was coming. In November of last year Edward Daffarn published a post on the Grenfell Action Group blog, entitled Playing with Fire, in which he warned that “only a catastrophic event will expose the ineptitude and incompetence of our landlord, the Kensington and Chelsea Management Organisation (KCTMO) and bring an end to the dangerous living conditions and neglect of health and safety legislation that they inflict upon their tenants and leaseholders.”

Local (Labour) councillor Judith Blakeman attempted to raise concerns with council officials and the management body “ad nauseam” since refurbishment of the block began in 2014: “They kept reassuring us that everything was fine” she said.

The refurbishment involved encasing the building with cladding that fire safety experts have long warned compromises the safety of tower blocks whose original “compartmentalised” design had incorporated rigorous fire safety standards (it also meant that advice to residents to “stay put” in the event of a fire was fatally inappropriate). An “external cladding fire” had caused the death of six people in Lakanal House tower block in South London in 2009. At the inquest into that disaster, the coroner had recommended that the government should review fire safety guidance to landlords and, in particular, the danger of the “spread of fire over the external envelope” of buildings (ie the use of external cladding). She also recommended that sprinkler systems be fitted to all high-rise buildings. None of this happened.

So why were the warnings ignored? Why did Gavin Barwell, who was housing minister until he lost his seat last week (and is now Theresa May’s chief of staff) fail to act on the warnings prompted by the Lakanal House fire? Why did his predecessor Brandon Lewis, tell MPs that it was “for the fire industry”, not government, to “encourage” the installation of sprinklers rather than “imposing” it? Why did then-communities secretary Eric Pickles treat the Lakanal House coroner’s recommendations as “advice” to local authorities rather than as instructions?  And why didn’t Grenfell Tower even have a building-wide fire alarm?

The answer is as simple as it’s shocking: these residents are poor working class people, many of whom are also ethnic minorities and migrants (in an especially tragic twist, the first body to be identified is that of a Syrian refugee, Mohammad al-Haj Ali). Such negligence and cost-cutting would never be tolerated in the luxury high-rise flats and offices peopled by the rich: these are built to the highest standards, using the safest materials.

This is ruling class contempt for the poor – also exemplified by May’s refusal to meet with local people during her brief and tightly-policed visit to the scene earlier today.

Let no-one tell you this was simply a “tragedy” as though it was some sort of natural disaster. This was criminal negligence by the ruling class and their political party, the Tories. Our response – and the only response that will truly honour the victims – must be to pursue the class struggle with renewed vigour. Starting by kicking out the Tories as soon as possible.

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Theresa May and the “Shared Society”

January 9, 2017 at 4:44 pm (capitalism, nationalism, populism, posted by JD, Tory scum)

 Ben Jennings 09.01.17
Cartoon: Ben Jennings, Guardian

By Phil Burton-Cartledge (first published at Phil’s blog All That Is Solid)

When you’re a leading politician and especially a Prime Minister, the pressure is on to stand for something. And as the real choices in politics truncated to who could best run the Thatcherite/neoliberal settlement, necessity and expediency dictated that one must pretend to be something more than a manager of that consensus. John Major had his Back to Basics campaign, married to the Citizen’s Charter and Cones’ Hotline wheeze. His Blairness got no less a figure than Anthony Giddens to cook up “The Third Way”, the impossibility of marrying market fundamentalism to half-recognisable social democratic objectives. Even Bill Clinton bought into that one. Dave had his Big Society, a convenient celebration of volunteering just as the Tories committed themselves to butchering public services and replacing them with philanthropy and a committed citizenry. Ed Miliband had One Nation. The exception is Jeremy Corbyn, who is yet to fully define himself despite offering a politics that decisively breaks with received wisdom.

In her own way, at least at the rhetorical level, Theresa May also defined herself differently, and now her philosophy has a name: the Shared Society. Looking forward to a major speech on the matter, we know this is so much guff because of her record. In the six months May has been in power she’s prevaricated, delayed, prevaricated, and delayed some more. With a dose of control freakery, as noted by Andrew Rawnsley, she’s carried on flogging off strategic industry, and has overseen a budget that barely differed from an Osborne effort. May’s shared society isn’t looking that different from late period Dave, truth be told. And that’s before we start talking about the NHS and the declaration of a humanitarian crisis by the crazed militants of the Red Cross. Her talk of dealing with “the shorter life expectancy for those born poor, the harsher treatment of black people in the criminal justice system, the lower chances of white working-class boys going to university, and … the despicable stigma and inadequate help for those with mental health conditions” remains just talk as long as these crises carry on without the government appearing to care too much about them.

Still, her original address from the steps of Downing Street was perceived as a master stroke from within the Westminster circus. Talk of dealing with everyday injustices, including economic anxiety and security came like a revelation to folks who rub shoulders with working class people only when ordering a latte. But it would be churlish to deny May’s speech had significant cut through. Unlike Dave and Osborne who only pretended concern, May sounded like she meant it, that she understood something about the difficulties of modern life. In an uncertain world, she crafted a message pledging certainty, of a national community that has everyone doing their bit and getting their just rewards. This is where the shared society comes in. She defines it as,

A society that doesn’t just value our individual rights but focuses rather more on the responsibilities we have to one another; a society that respects the bonds of family, community, citizenship and strong institutions that we share as a union of people and nations; a society with a commitment to fairness at its heart … it goes to the heart of my belief that there is more to life than individualism and self-interest. The social and cultural unions represented by families, communities, towns, cities, counties and nations are the things that define us and make us strong. And it is the job of government to encourage and nurture these relationships and institutions where it can, and to correct the injustice and unfairness that divides us wherever it is found.

Had Ed Miliband defined his One Nationism thus, the Tory press would have dubbed him a proto-totalitarian. Yet, from an ideas perspective, the shared society is interesting for three reasons. We know from her long stint in the Home Office that May is a petty-minded authoritarian who, like her predecessors, happily ramped up the government’s snooping powers in the name of terror prevention. All throughout her career, May has never been one to celebrate individual sovereignty. Second, she is riding the wave of (English) nationalism. As Wolfgang Streeck has argued, societies that have seen labour movements broken and discourses of resistance buried turn instead to whatever ideological resources are to hand. In this case, nationalism is resurgent because the nation appears eternal vis a vis cultural, political and economic turbulence. Farage exploited noisy, entitled, frightened English nationalism to his advantage, and now May is doing the same – albeit in calmer, more measured (and respectable) tones. And thirdly, her “active government” promises social reform that will build a “great meritocracy”. Forget your Ed Miliband, she’s channeling Clem Attlee. Again, we’ll wait and see about that as there’s been nothing beyond a slight smoothing of social security policy.

It’s bollocks, but unlike the wonky visions of days gone by it has a certain simplicity to it, one that even newspaper columnists will be able to understand. It promises justice and security, mainstays that should be Labour’s, but have proven difficult to meld together and “own” in recent times – the fact May freely speaks this language and is treated seriously goes to show how far our party still has to go. Yes, May suffers from the triple vices of incompetence, dithering and control-freakery, and Brexit could undo her leadership. But her undeserved reputation as a serious grown up rests on this rhetoric, of knowing and understanding the problems of, shock horror, the working class. And most importantly, her apparent no fuss willingness to do something about them.

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AWL statement on the Trump victory

November 11, 2016 at 6:56 pm (capitalism, conspiracy theories, Democratic Party, elections, fascism, immigration, libertarianism, misogyny, populism, posted by JD, Racism, Republican Party, Trump, United States, workers)

Image result for picture Workers Liberty logo

This piece also appears in Solidarity:

Donald Trump has won the US Presidential election.

He won by tapping into the reality of and the fear of poverty and failure among millions of working-class Americans.

He won by exploiting the deep racial divisions that have blighted the US for centuries. He attacked all Hispanic workers when calling Mexicans criminals and rapists. By scapegoating Muslims.

He won because millions of Americans wanted to revolt against the political establishment. But this man is not the “blue collar billionaire” that his supporters dubbed him. Just a billionaire and also part of, the nastiest part, of the establishment!

Donald Trump is an idiot blowhard but the political functionaries around him are not. This election was probably won by the Trump camp calculating the “demographics” of the USA. By exploiting the different insecurities that many people feel. By understanding and approving of social fragmentation in the USA and working it to Trump’s advantage.

But in short, Trump made his appeal to a white working class which has been excluded by the powerfully destructive forces of US capitalism over the last 30 years as it moved its business to anywhere in the world where labour is cheaper.

Even when Trump made his appeal to African-Americans, in order to soften his image, he could not resist treating those communities as people whose real political views and interests were worthless to him. “What have you got to lose”, he said, “Your life couldn’t get any worse”. Unsurprisingly, the polls said 90% of those African-Americans who were voting, would not vote for Trump.

As shocked as we are by this result the truth is that Trump always stood a good chance of winning after the exit of Bernie Sanders from the election. With his calls for free college tuition, the removal of student debt, a national health service, Sanders represented a radical break from the status quo, but one which, with sufficient organisation on the ground, the whole of working-class American could have united behind.

Clinton

By nominating a a presidential candidate who was always going to continue the Clinton-Bush-Obama programme of complacency, corruption and corporate-interest politics, the Democrats ensured discontent among millions of people would rise.

It was simply Hillary Clinton’s turn to pursue austerity and warmongering. Donald Trump was there to exploit and hypocritically ridicule this “establishment”.

What happens now? He may not be able to put through a programme of economic nationalism. He may not be able to expel thousands of Hispanic workers. But he will be able to load the Supreme Court front bench with conservatives. Already vulnerable abortion rights and the right of LGBT people to marry are under threat. Trade unions too will be under attack.

Trump’s election will give the green light to the neighbourhood vigilantes who fear young black men so much they are prepared to put a bullet in their back. The reactionaries who stand outside abortion clinics. The virulently anti-immigration Tea Party people. The organised fascists. And some of these people — the alternative right, the libertarians — are already part of Trump’s camp.

Not everyone who voted for Trump approve of his violent sexism. But many did. There were people who overlooked the serious charges of sexual assault; that is they do not think this behaviour is wrong. Not everyone who voted for Trump is racist. But many are. US racial divisions run deep.

One of the saddest things about this election is how long-time union members, who in different circumstances would regard themselves as anti-racist voted for Trump.

In places like West Virginia where there virtually no stable jobs Trump won big majorities. Maybe people just hear what they want to hear when Trump uses opportunistic lies like “I am going to make America great again”. But the coal mines will not reopen. The miners will not go back to work. This is a man who made his fame on the basis of ruthlessly telling people “You’re fired”. If big business is now in fracking, and not coal, that is where state support under Trump will go.

Capitalist rule as is in fact epitomised by the US two-party system, may have lost it’s legitimacy but without a socialist alternative to replace it, things can get much worse.

What can the socialist left do now? Passively regarding Trump voters as ignorant rednecks who could never be pulled away from his politics is wrong. Yes, many millions are poorly educated. But in this vastly wealthy society that is a shocking crime. As are these facts — that 21% of American children live in poverty, that 10% of workers are in low waged jobs, that 30% do not have health insurance and 40% do not have a pension.

Wherever the left is — in the US or in Europe — we all have to argue for class politics, the politics of justice and solidarity and at the same time making the strongest challenge we can against racism and xenophobia.

We do have a chance to do these things. Remember Bernie Sanders drew larger crowds than Trump for his attacks on Wall Street and the power and privilege of the “millionaires and billionaires.”

Here in Europe our struggle is against Boris Johnson, Marine Le Pen and Beppe Grillo. But it also against those in the labour movement who think anti-immigration sentiments and mild token opposition to the rule of capitalism is enough. And we also warn against a left which makes semi-populist stances against “the capitalist EU”, against globalisation, but never sets out a positive socialist programme: for equality, for working-class unity across borders, for the appropriation for the banks, for secure jobs and homes for all.

Events are showing us that campaigning for a social-democratic left “getting into power” is not enough. Getting working-class representation is about building a mass political labour movement organised around socialist politics. The necessity is not new but it has just got many times more urgent.

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Interview with Kim Moody: the myths of a workerless future

August 7, 2016 at 9:45 pm (capitalism, economics, posted by JD, unions, United States, workers)

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Despite all the “gig economy” hype, Kim Moody argues, most workers are experiencing the rise of the crappy-job economy. But just-in-time production has created huge concentrations of workers—and vast potential for organizing. Photo: Nick Saltmarsh (CC BY 2.0)

From the US rank-and-file trade union magazine and website Labor Notes

Where’s our economy headed? Soon every factory worker will have to start driving for Uber, and the trucks will drive themselves—at least so the business press tells us.

But Kim Moody, co-founder of this magazine and the author of many books on U.S. labor, paints a different picture. Chris Brooks asked him to cut through the hype and describe what’s coming for working people and the opportunities for unions.

This is Part 1 of our interview with Kim Moody. Watch for Part 2, coming next week. —Eds.

Labor Notes: We read a lot about the “gig economy,” where workers cycle through multiple jobs using app-based companies like Uber, TaskRabbit [for everyday tasks such as cleaning or moving], and Mechanical Turk [for online tasks such as labeling images]. Is this really the future of work?

Kim Moody: One thing to notice is that, aside from outfits like Uber, most of these are not employers. They’re digital platforms where you can find a job.

The apps are not determining the hours and pay, or even the technology used on the jobs. It’s still employers that are calling the shots. So if jobs are getting worse, it’s not because people can find them digitally as opposed to reading them in the newspaper.

Also, discussions of the gig economy often assume that suddenly there are all these people who are multiple job-holders. But the fact is that the proportion of the workforce who have more than one job hasn’t changed much in 40 years.

The vast majority of them are people with regular full-time jobs who are also moonlighting, which is a very old thing. There are a lot of multiple job-holders, but there have always been a lot of them.

There’s also been talk of the “1099 economy.” Are we really moving towards a future where 40 percent of workers will be freelancing?

The idea that freelancers can become 40 percent of the workforce is science fiction.

There are two kinds of self-employed. The greatest number are the “unincorporated self-employed,” or independent contractors. Their numbers have been dropping for years.

The other group, the incorporated ones, are people who run a small business. They have grown somewhat, but they are still just 4 percent of the workforce.

You argue that the “gig economy” and “precarious work” concepts miss the mark because they don’t get at the most concerning change: the rise of the crappy-job economy. Can you talk about what’s changed for workers and why?

The first change is work intensification. Work has gotten dramatically harder in the last 30 years or so, and continues to.

That’s happened through lean production, which reduces the amount of labor to produce the same or greater amount of product or service and is tied to just-in-time production. Lean production began in the automobile industry in the 1980s, but now it is everywhere. It’s in hospitals, it’s in schools.

Another aspect is electronic and biometric monitoring, measuring, and surveillance, which allow employers to see how to get more work literally out of each minute. Another aspect is that the amount of break time has fallen dramatically since the ’80s.

Whether you are working full-time or part-time, in a precarious job or not, chances are you are going to experience some of this.

The other side is income. Wages have been falling since the early 1970s. More and more people are actually working for less, in real terms, than they used to. This also impacts everybody, although part-time and precarious workers are likely to get paid even less than full-time people.

And if you look at the Bureau of Labor Statistics projections for the fastest-growing jobs, millions of new jobs over the next decade or so, 70 percent are projected to be low-skill, low-pay jobs.

In other words, we are not heading for some big high-tech economy. Instead we are heading for a low-paid workforce with crappy jobs. The end of good jobs is nigh.

While app-based “just-in-time” gigs have gotten lots of media attention, far less attention has been paid to “just-in-time” production. Can you talk about why massive logistics hubs have emerged, and what they mean for union organizing?

In order for globalization to be efficient, low pay isn’t necessarily enough, because you have to move products from one location to another. That required a change in the way products are moved—the “logistics revolution.”

The time it takes to deliver a product to the point of sale is an important factor in competition. Like production, transportation now operates on a just-in-time basis. Products move faster.

The speed of trucks, planes, and trains did not change. What did was the way things are processed. Goods don’t stay in warehouses very long. Products arrive on rail and are cross-docked and moved out by truck in a matter of hours. This process has really only taken shape in the 21st century.

In order to make it work, the industry has created logistics clusters. These are huge concentrations of warehouses where rail, truck, air, and water transportation meet and can be coordinated, usually electronically.

You might think, “Well, this is all very high-tech.” But it turns out that it still requires thousands and thousands of workers. In the U.S. there are 60 of these clusters, but three stand out: the Port of New York and New Jersey, the Los Angeles and Long Beach port area, and Chicago. Each of these employs, in a small geographic area, at least 100,000 people.

Now, the whole idea of outsourcing back in the 1980s was to break up the concentrations of workers in places like Detroit, Pittsburgh, or Gary. But what these companies have done now, inadvertently, is to recruit incredibly massive concentrations of manual laborers.

It has evolved in a way that might shoot these companies in the foot—because here you have the potential to organize vast numbers of poorly paid workers into unions. And there are attempts to do just that.

The other thing is that these clusters are tied together by just-in-time systems—which means you have hundreds, maybe thousands, of points in the transportation system that are highly vulnerable. If you stop work in one place, you are going to close down huge areas.

Media commentators and even presidential candidates blame the loss of millions of U.S. manufacturing jobs on trade and outsourcing. You’re skeptical. How do you explain it?

Outsourcing, if it is in the U.S.—which most of it has been—can break up the union, it can be very inconvenient to the people who lose their jobs, but it doesn’t necessarily eliminate jobs in the U.S. The jobs are just moved to a different, lower-paid group of workers.

Offshoring is another thing, but it’s not as widespread as people think. While moving production abroad has definitely impacted certain industries like steel, textile, and clothing, it cannot account for the loss of jobs we have seen. I estimate that between a million and 2 million jobs have been lost since the mid-’80s to imports and offshoring.

Manufacturing output, from the 1960s to just before the Great Recession in 2007, actually grew by 131 percent; the manufacturing sector more than doubled its output. If everything was going abroad, you couldn’t possibly have that kind of growth.

How can this be? I believe the answer lies in lean production and new technology, as we talked about earlier. Productivity literally doubled, and manufacturing jobs dropped by 50 percent or more. It’s the productivity increase that explains the loss of jobs.

It is very difficult for politicians to deal with this question, because it means attacking employers. It means saying, “You are taking too much out of your workforce.” And of course since most economists, politicians, and experts think that productivity growth is a wonderful thing, it’s beyond criticism.

There’s a lot of hand-wringing about the future of automation. Former Service Employees President Andy Stern has been making the media rounds claiming that driverless trucks are going to replace millions of drivers.

You can sell a lot of books with this pop futurology. It reminds me of the great automation scare of the 1950s. It was popular then to make predictions that there wouldn’t be any factory workers left.

And automation has reduced the number of factory workers, but there are still 8 or 9 million of them lingering around—despite all this technology, which is much greater than anything they predicted in the ’50s.

I have a shelf of books predicting “the end of work.” And yet we have millions more workers than we used to—the problem being that they are worse off than they used to be, not that they don’t exist.

There’s more! We also asked Kim Moody about workforce demographics and outsourcing to the South. Stay tuned for Part 2.

Read more: Everyone in this auto parts plant was a temp—until they all joined the union and threatened to strike.

Read more: The Cargo Chain is a beautiful poster/pamphlet that maps out how ship hands, longshoremen, truck drivers, railroad operators, and warehouse workers move goods across North America.

A version of this article appeared in Labor Notes #449, August 2016. Don’t miss an issue, subscribe today.

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Corbynomics – a friendly critique

July 27, 2016 at 7:37 pm (AWL, banks, capitalism, economics, labour party, left, posted by JD)

Based on a pamphlet from the Alliance for Workers Liberty:

There is a buzz about “Corbynomics”. That’s positive. For the first time in ages the neo-liberal economic orthodoxies insisted on by the Blairite Labour Party are up for debate and discussion.

What Corbynomics means, though, isn’t clear yet. It remains to be defined, not just in detail but even in broad outline. The left should plunge into the debate – and be bold.

There is a problem about the lack of left-wing Labour economic policy for Jeremy Corbyn and Shadow Chancellor John McDonnell to draw on. On ssues like the NHS, say, or renationalising the railways and Royal Mail, there is policy and they should do more to promote it – a lot more. On wider economic policy,there is more of a vacuum on the left, and a need for socialist ideas to fill it. But some of what Corbyn has said points in the wrong direction.

So, for instance, in the steel crisis, Corbyn and McDonnell said that if no capitalist buyer for Tata’s plants was found, they would support nationalising them – but only in order to find a buyer, and then sell them off again! Why didn’t they take the opportunity to argue to nationalise steel permanently, safeguard jobs, workers’ terms and conditions and communities, and run things differently to produce what we need for social purposes, like building housing, public service and public transport infrastructure?

Fiscal responsibility?

In his speech on 11 March, John McDonnell talked about “fiscal responsibility” – presumably in order to buy space to attack George Osborne’s 16 March Budget cuts. But anxious promises that a future Labour government will balance current spending with current revenues – which Osborne had not done after six years as chancellor! – only feed the superstition that the economic problems since 2008 are due to the Blair and Brown governments overspending” on public services. They aren’t. The reason for the crash and the slump was giddy profiteering and speculating by the banks, not public spending.

Now, there is no special merit in a government increasing its debt burden. However, a rigid rule of balancing current spending with current revenues is foolish. As Simon Wren-Lewis, professor of economics at Oxford University and an adviser to McDonnell, has pointed out, “the rule is likely to make the deficit much less of a shock absorber, and so lead to unnecessary volatility in taxes or spending”. Also, since raising taxes is politically difficult, often slower in effect, and involves running uphill in times of economic crises which reduce the tax base, the rule has a built-in bias towards panic “volatility” (cuts) in spending. McDonnell has long campaigned against cuts. It looks as if he was pushed into these statements by the conservative elements in the Labour leadership office – part of a more general problem.

Who are the “wealth creators”?

Probably also a reflection of that section of the Labour leadership office were McDonnell’s off-key statements about “the wealth creators”.

“The Labour party are the representatives of the wealth creators — the designers, the producers, the entrepreneurs, the workers on the shop floor.” He claimed that his policy “has been welcomed this morning by [people] right across the business sector, business leaders, entrepreneurs as well as trade unions. The wealth creators have welcomed it”.

According to Mike Savage, a researcher at the LSE, inherited loot is 70% of all household wealth in Britain today, and is rising towards 80% by 2050. One of the most booming industries in slump-ridden Britain is the rise of “family offices”, where financiers work fulltime on managing and conserving the wealth of rich families. “Wealth creator” is conservatives’ pet term for capitalists. In fact capitalists’ riches come from the exploitation of the real wealth creators, the wage working class – or from active exploitation done not by the capitalists, but by their parents and grandparents.

McDonnell added “the workers on the shop floor” atthe end of his list of “wealth creators”, and put“designers” (i.e. some particularly skilled workers) at the start of the list. But the idea that a good economic policy can be pursued in alliance with the whole “business sector” is false. It can only prepare the way for a collapse when the CBI and other bosses’ groups denounce left-wing policies from Corbyn and McDonnell, which they will.

Is a National Investment Bank a left-wing policy?

Similarly, the leadership has focused on the call for a “National Investment Bank”, a publicly-owned bank able to borrow more cheaply than commercial banks because of its government backing, and lending for infrastructure and industrial projects.

The model must be the KfW, the German state’s federal investment bank, set up under the Marshall Plan in the 1940s and still going strong. It’s a safe, conservative model, maybe useful as a capitalist technique, but in no way anti-capitalist or socialist. The current chair of the KFW Supervisory Board is German finance minister Wolfgang Schäuble, Europe’s sternest austerity-hawk and central to the crushing of the anti-austerity rebellion in Greece.

There is nothing really socialist or even left-wing about the proposals for a Schäuble-bank in Britain. In fact it seems more like a way of avoiding a clear left policy about what to do about the banks.

Expropriate the banks!

Replacing capitalism with socialism requires public ownership, democratic and workers’ control and planning of the giant corporations and enterprises central to the economy. That is hardly even conceivable without an insurgent workers’ movement challenging the capitalist class on every level – which is what we must work for, rather than damping it down with appeals to “wealth creators”.

To even move in this direction requires transitional demands to campaign for. An obvious one to make central is public ownership and democratic control of the banks and high finance – a sector central to the economy’s functioning and to the economic chaos which has engulfed us over the last decade.

Banking should become a unified, democratically run public service providing banking, pensions and mortgages for everyone who needs them, and funds and resources for investment in public services and all areas of social need – instead of acting as an engine for devastating them while promoting inequality.

Public ownership of the banks has been official TUC policy since it was proposed by the Fire Brigades Union in 2012, but left dormant. We should fight to activate it, and make it active Labour policy too.

All this poses the question of what kind of Labour government we want. In place of an alternative capitalist administration, the left should set ourselves and shape our campaigning around the goal of a workers’ government, accountable to and drawing strength from the mass organisations of the labour movement, and willing and able to force through measures like expropriating the steel industry and the banks – and much more.

More
Motion for expropriation of the banks and a workers’ government, passed at Labour Representation Committee conference, 20 February 2016, here

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Philip Green: archetypal British capitalist

July 25, 2016 at 2:44 pm (capitalism, corruption, economics, posted by JD, reblogged)

By Phil Burton-Cartledge at All That Is Solid (first published 26 April 2016, and now even more relevant):

Philip GreenOn global capitalism in Lenin’s day, the Bolshevik leader had this to say: “Imperialism is an immense accumulation of money capital in a few countries … hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by “clipping coupons”, who take no part in any enterprise whatever, whose profession is idleness …” If only the money men of 21st century Britain remained excrescences on the economy, of directing their stooges to invest capital and growing fat off the labour and talent of others. At the risk of being wistful, this ideal-typical view of your average capitalist is long buried and have gone beyond mere uselessness. Drunk on their parasitism, they are oblivious to how their appetites are not just imperiling the health of the enterprises they gorge upon, but threaten to kill them outright.

The latest example is the collapse of British Home Stores (BHS), a venerable department store that has graced the high street for 88 years. Not that I ever went there, which I suppose is a microcosm of the predicament it finds itself in. Lately, not enough of anyone have come through its doors to buy outfits and lampshades. Yet the Darwinist cut and thrust of the retail market can only shoulder so much of the blame. The reason why BHS is looking down a barrel, and its 11,000-strong workforce face uncertain futures is in large measure down to its erstwhile proprietor, the fly-by-knight Sir Philip Green. Acquiring the struggling BHS for £200m in 2000, Green and his family shook the firm down for a billion quid. All the profits, all the wage squeezes, every saving that could be wrung from the business passed through head office en route to Tina Green’s capacious purse in Monaco. And when there was nothing left, Green offloaded BHS on his tax-dodging wife’s behalf for a quid. The new owners, a ragtag-and-bobtail outfit going by the name of Retail Acquisitions, failed to raise the cash BHS needed to start turning itself around.

It goes without saying that Green’s behaviour was grubby and disgusting, and he could face action from the pensions’ watchdog amid suggestions that the firm dodged its obligations (this would be on top of the pensions holidays many large firms took in the late 90s/early 00s, all with a nod from Gordon Brown). Seemingly aware he could be on the hook for something, Green has offered to stump up £80m toward the BHS pension fund’s half-a-billion deficit. I hope the sop is rejected and he gets rinsed.

As you can see, Green went well beyond the “coupon clipping”. His ownership and running of the brand suggests little if any interest in preserving the business for the long-term, of increasing products, introducing new lines, investing in new technology, and battling it out for market share. You know, the things Max Weber told us capitalists are supposed to do. If BHS was in difficulty 16 years ago, self-evidently a business that has a billion pounds sloshing around is a business that was not a basket case. Instead of treating BHS like a bile bear with the tap left on full for the Green durée, the monies could have been used to add value by expanding its range, aggressively marketing itself, and venturing properly into online retail. Instead, Sir Phil was to his host a tax-dodging, celeb-stalking, yacht-bothering tapeworm.

Ah, but he’s a one-off, a bad apple, yes? In the interests of fairness, BHS’s problems can’t all be laid at his door. The so-called death of the high street is the result of policies pursued over the last six years. The cost of living crisis (remember that?) was always more than a soundbite for millions of people. As meagre wage rises/freezes have bitten, people don’t have as much cash to splash, hence middlebrow stores like BHS were always going to face what the experts call a “challenging retail environment”. The second is the brash new competitor, Amazon, have got away with ripping off the Treasury. Without as much of a tax liability, they have built an infrastructure on the back of exhausting, low-paid work, which has given them an unfair competitive advantage. Having got caught dithering over steel, the Tories are not about to invite more scrutiny of their complicity in this situation. Which probably helps explain why Anna Soubry’s been very quick to discuss the issue in the House and dampen speculation about redundancies.

There’s a wider point. Green is the “cultural dominant” of what a capitalist looks like in 21st century Britain, the sort valorised, flattered, and admired by the City and its helpers. The pursuit of profit, of realising returns on investment, comes not from building things but of tearing them down. As David Harvey points out, global capital from the 1980s on snapped up sold off state infrastructure and coined it from the introduction of markets into public services. New markets were conquered, but these were provided by governments as they let capital swoop in and profit from institutions under their stewardship. Capitalism ate the infrastructure that sustained it. As Britain is the epicentre of global finance, we find here these necrotising social relationships have achieved their fullest expression: an economy whose GDP is dependent not on production, but the selling of houses between buy-to-let landlords, a state bent on selling off what’s left of the public domain to politically suitable bidders (one doesn’t have to be the highest, as the Garden Bridge fiasco demonstrates), and a financial industry that sucks in Britain’s best brains to design fiendishly complex but socially useless “products”, “packages”, “vehicles”, and “instruments”. Funny how the intangible has annexed the language of the concrete. In sum, the owners of capital have become dysfunctional and decadent from the standpoint of British capitalism itself.

Green is not a one-off. He’s archetypal.

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