Wednesday, September 17, 2014

Economics: Crises and their Resolution

by Michael Roberts

The Resolution Foundation in the UK does important economic and statistical analysis in highlighting the exploitation of labour, inequalities in wealth and income and failures of the welfare system to defend the poor (http://www.resolutionfoundation.org/). It recently hosted the UK book launch of House of Debt, with both authors (Mian and Sufi) on stage alongside Martin Wolf, the Keynesian FT columnist and Stephanie Flanders, formerly the BBC economics editor, but now taking a pay packet from JP Morgan, the American investment bank. (see
https://www.youtube.com/watch?v=UmSU0jCGt6k&feature=youtu.be)

It was standing room only to hear praise heaped from those present on Mian and Sufi’s book, increasingly regarded in the mainstream as important an explanation of the global financial crisis and the ensuing Great Recession as Thomas Piketty’s book, Capital in the 21st century is seen by the leading mainstream economists as offering the best explanation for the growing inequality of wealth and income in the major economies.

I have critiqued Mian and Sufi’s book in a recent post (http://thenextrecession.wordpress.com/2014/06/28/its-debt-stupid/). For them, it is excessive debt that was the cause of the US housing bust, the banking crash and then the recession. The answer is to introduce measures that control excessive credit and all will be well.

I criticised this view from two angles: the first was that Mian and Sufi provided no real explanation for why debt got excessive except that central banks let it happen through a lack of regulation. As I argued in my post, behind the rise in debt and the subsequent collapse is a crisis in the profitability of capitalist production. Not surprisingly, this explanation is ignored by Mian and Sufi and, of course, by the likes of Wolf and Flanders.

The second point is that Mian and Sufi’s solution to future excessive debt is to get creditors and debtors to share the risk of any default, thus making the bankers more careful about lending to people who cannot pay it back.  This policy would be a major interference in the free market for credit and in the profits of the financial system and has as much chance of being adopted as Piketty’s policy to reduce inequality through a global wealth tax.

Both the House of Debt and Capital in the 21st century deliver the worst of both worlds – they don’t identify the real cause of crises and inequality in modern capitalism, but at the same time offer utopian and unrealistic policies to solve these problems because they want to sustain the capitalist mode of production. So it is no surprise that Keynesians like Wolf, the economists of the Resolution Foundation and subtle supporters of the financial system like Flanders and her mentor Larry Summers, reckon the House of Debt has the answer.

Wolf himself has just published his book, The Shifts and the Shocks: What We’ve Learned—and Have Still to Learn—from the Financial Crisis (see an interview with Wolf in http://www.newrepublic.com/article/119403/qa-martin-wolf-his-new-book-financial-crisis). In it, he argues, as do the Keynesian wing of mainstream economics, that the cause of the Great Recession “was a savings glut (or rather investment dearth); global imbalances; rising inequality and correspondingly weak growth of consumption; low real interest rates on safe assets; a search for yield; and fabrication of notionally safe, but relatively high-yielding, financial assets.” There is little explanation for the occurrence of these bad things, or why they keep recurring over the history of capitalism, except to lay the blame on lack of banking regulation.

So, while Wolf backs Mian and Sufi’s policy answer, he also calls for a return to the deep regulation of the US Glass-Steagall Act of the Roosevelt era that broke up huge universal banks so that none were ‘too big to fail’ (i.e. would cause a systemic collapse). Wolf demands that banks hold more capital (equity) on their books from investors, so that they can withstand any future crises. But such ‘heavy’ regulation has already been bypassed or rejected by national governments, the IMF, the BIS and the World Bank. So again Wolf’s explanations of crises and policy prescriptions are both wrong and utopian at the same time.

Tuesday, September 16, 2014

Comments on the Scottish vote for independence.


Which will it be?
Those of us connected to this blog have been having some discussions on the upcoming Scottish vote for or against independence.  A yes vote will mean the end of a 300 year old union.  But as Scottish friends of mine put it, it was an agreement made under duress, through coercion.  We are sharing some of the points made by the comrades on this issue. Start at the top.  The first comment is not connected to the others and is from a comrade in Northern Ireland.
Harry H: Comrades, l have never believed we should advocate a yes for independence. Politically this is bourgeois nationalism. Independence will divide the working class in Britain, industrially and politically. You only have to look at Ireland to witness how separate states have divided the working class, with separate governments and social issues that are unrelated to each state. Having separate currencies, different public services etc, has deemed it impossible to organise  United class action around these issues, even though the trade union movement, in the Irish Congress of Trade Unions is an all Ireland body.
l believe Scottish Independence would divide the British working class, just like any European country and struggles would be isolated to the nation state. In Greece there have been 30 general strikes, around austerity, without the struggle spreading in any coordinated manner throughout Europe.
In relation to the North of Ireland, it has endured repression by British Imperialism for decades in recent times. Solders on streets, internment, state assassinations, and gunning down of civilians like Bloody Sunday. To raise the spectre of independence for Northern Ireland, as some left parties have done during the Scottish referendum, is political suicide. Northern Ireland is more polarised today than since the beginning of the troubles. It could develop in to a civil war. We should continue to demand British withdrawal and a socialist Ireland, but both must go hand in hand with a United socialist movement North and South.
S O’T: I was wavering there. But I am increasingly moving in favor of us advocating a vote against independence in this referendum. Yes for the right of self determination of Scotland and also England, Wales, Ireland, I have developed my position somewhat on the North of Ireland recently, I put it on this list some time ago, but in this referendum period we advocate a socialist federation of England, Scotland, Wales and Ireland.

In the case of Ireland, if the socialist revolution would begin outside of the North of Ireland, especially England, and sweep across borders it could sweep into Northern Ireland and unify Ireland on a socialist basis but if this was not the case, if the revolution were more complicated and fragmented as would likely be the case, then a position would have to be taken that would avoid the issue of the North from being used to stir up reaction and allow the bourgeois to develop a civil war and repartition and put the socialist revolution down in blood.

This position should in my opinion be for a socialist federation of England, Scotland, Wales and Ireland but in the case of Northern Ireland leave the actual issue of the border or borders until it was seen how things developed. In a case where the revolution did not begin in England and sweep across borders into Scotland, Wales and Ireland then Ireland should have the right of self determination as the other countries but in the case of the North I believe that the issue of cantons should be raised. Already these in reality exist.

In every village and city there are the different areas with the different flags and colors painted on the side walks and the streets. If and I believe it is a question of when the present situation of peace in the North breaks down then what will be vital is a program and policy that will prevent the area lurching into civil war. This I believe would be taking the road to cantons such as exist in Switzerland at present. 
RM: I have not felt comfortable calling for a yes vote.  We have been discussing this a bit at the pub where I hang out with some Scots, Punjabi English etc.  No one really supports it. Even the Scotsman is ambivalent because he is older. The comrades in the SSP are real eager but it’s hard for me to feel that way for all the reasons we have traditionally opposed such things.  Naturally, the decision is up to the Scots but its hard for me to call for a yes vote.
Stephen M:  Hi Richard,
Here's some comments on Scottish independence. Wales is also an interesting question and Northern Ireland, as Sean said, is very complex. Maybe I'll make some comments on Wales later.

For the first time in a very long time I was back in the UK a few weeks ago for family reasons. It is only the second time in 20 years, so I'm not as familiar with the British workers' movement as I used to be. Unfortunately, I didn't have the chance to go to Scotland to get in touch with the real mood there and I have to admit that from continental Europe, I haven't been following it with the same interest as the population of the UK have. So these are still observations from a distance that Scottish and UK readers could better comment on or correct.

While I was in the UK, I had the (un)fortunate chance to watch the last televised debate between the pro-Scottish independence leader, Alex Salmond and No-vote Labour spokesperson, Alistair Darling. Scotland is overwhelmingly working class and heavily Labour by tradition, but Darling lost the debate because he never advanced any arguments in the interests of the working class. Salmond, on the other hand, won this crucial debate because he demagogically linked working class and left-wing rhetoric to nationalist ideas and sentiments. Salmond attacked the hated bedroom tax, food banks, the Tory attacks on the National Health Service, the loss of jobs and threats of unemployment, his links to unions fighting back and played a left card on ending the Trident nuclear programme based in Scotland.

Darling ended up looking like an apologist for the Tories and the British bourgeoisie (which he is) and whose policies have meant untold suffering for the Scottish working class which fuel separatist feelings. Darling called the criticism of the National Health Service lies, concentrated on the question of the new Scottish currency and how much less North Sea oil would be worth based on future estimates. His points could have been made by any Tory minister. By going into a “Popular Front” alliance with the Tories over independence such Labour politicians have had to drop any class issues and avoid any “United Front” approach which would have emphasized the common interests of the Scottish workers and the rest of the British working class in their joint battle against the British bourgeoisie.

There are, of course, strong nationalist factors involved too. Scotland fought doggedly to defend its independence from England for hundreds of years and since unification they have always been treated as second-class citizens in the UK. The residual animosity towards the “Sassanachs” to use an old term is a contributing factor towards independence feelings. However, that is not to say the majority of Scots hate the English, but it is a reflection of the hate felt towards the English ruling class and its exploitation and subjugation of the Scottish people and the Scottish working class in particular.

For many Scottish workers who are inclined to vote Yes, anything can seem better than rule from the capitalist class in London. So Scottish independence appears to offer some tangible opportunity for progress and change when capitalism is in a blind alley and no socialist alternative is being offered by leaders of the Labour Movement, including its Scottish representatives.

In a distorted form, the independence sentiments among workers are a reflection of desires for control of their own destiny, in the absence of its articulation in class terms in the form of demands for workers' self-government and workers control of industry and government. The lack of an all-British revolutionary socialist alternative means these sentiments have become derailed into delusions that somehow Scottish independence will mean more workers' control of society, when in fact capitalist rule of industry and politics will not change, including its domination by the English bourgeoisie. In a capitalist world economy, just like all other small nations around the world, the Scottish workers will remain slaves to Imperialism, multinational companies and exploitation by English and Scottish capitalists.

In reality, Alex Salmond and the nationalists offer no real socialist alternative for Scotland. His policies are little more than an illusion of a better, more liberal form of Scottish capitalism. In truth, a new independent Scottish parliament will have no more power over capitalist interests than they do now under a devolved system within the Union. They will be the puppets of the multinational companies which control Scotland's riches. Scottish MPs will be no more able to resist the bosses demands for cuts, low wages and redundancies than they can now.

Salmond is a thoroughly petty-bourgeois representative of some sections of the Scottish capitalist class and middle classes. He attempts to reconcile Scottish independence with the interests of the British bourgeoisie, reflected in the fact that he promises to pay Scotland's share of Britain's National Debt to the capitalists and financiers and to maintain use of the British pound, which, of course, will mean control of the Scottish currency by the Bank of England.

Socialists unreservedly defend the right of the Scots to decide their own future, to have the right to self-determination and separation if they should wish and we would unequivocally defend their decision. But we cannot sew illusions in an independent capitalist Scotland. We have to point out that independence on a capitalist basis will be a disaster, just as bad as staying in the Union on a capitalist basis.

Furthermore, we have to point out that it can actually weaken the power of the Scottish working class in their struggle against the English and international bourgeoisie, who will still control its economy. The capitalists will play off English and Scottish workers against each other to drive down wages, worsen working conditions and make it easier to close factories and move production to other countries, just as they do now in the rest of Europe.

Likewise, the English, Welsh and Northern Ireland working classes will be severely weakened without unity with their Scottish sisters and brothers. Worse still, any possible splitting of the class organizations into Scottish and separate British unions, and also separate Labour Parties, would be a terrible step backward. It would also strengthen the power of the British bourgeoisie south of the border as it would mean that the Conservatives would probably have a continuous parliamentary majority in the rest of the UK (at least in right-wing coalitions) and it would make it virtually impossible for the Labour Party to ever form a government in the future, because so many Labour MPs are elected from Scotland.

The fact is that the unions and the Labour Party owes much of their existence and their strength to the role of the Scottish working class in building the British Labour Movement. We shouldn't forget that it was the Scottish union leader, Keir Hardy, who was a key founder of the British workers' movement, who became the first independent Labour Member of Parliament representing the whole of the British working class. First elected from an English constituency, he later went on to become an MP in Wales.
The current leaders of the Labour Party, like Darling, are traitors to the heritage of Keir Hardy and traitors not only to Scottish workers, but to the working class throughout Britain. Whether or not the Scottish people vote for independence, the unity of the British working class must not be broken. Workers' organizations much remain united in single organizations across the north-south border.

There is no future for the Scottish working class either inside a capitalist United Kingdom or an independent capitalist Scotland. The international crises of capitalism and the world recession since 2007 show that there is no escape from the effects of world capitalism for small capitalist nations. The Scottish people will only be fully liberated and independent if the British and international capitalist class is overthrown and that cannot be done without unity between the British working class of Scotland, England, Wales and Northern Ireland and internationally.

The overthrow of the British ruling class, including the Scottish bourgeoisie, is the only solution. While unequivocally defending and respecting the right of Scotland to break away, we have to counterpoise the demand for maximum self-government in a broader Socialist Federation of Scotland, Wales, Northern Ireland and England as the only real alternative to the continuing capitalist nightmare. This would include maximum devolved powers to all regions of Britain and democratic control extended right down to the workplaces and public services. Democratic workers' control and management of the means of production, of services and the banks and financial institutions throughout Britain is the only real way that workers of whatever nationality, ethnic minority or religious group can gain “independence” from the bourgeoisie in London, Edinburgh, Belfast or Cardiff and really achieve the power of self-determination and control over their lives and their destiny.

Pat B: Hi Comrades,
I tend to support the campaign for Scottish independence although I completely respect the arguments on the other side. Unfortunately, in Steve's useful analysis I don't think that he has done any justice to the socialist case for independence and as a result it is not as balanced a review of the options as it could have been. 
For example, Steve does not really talk about the very negative consequences for British imperialism of Scottish Independence which is surely an important factor that should feature in our analysis. It is for this reason, that a large majority of the international socialist left movement is now supporting the idea of Scottish independence.   
Secondly, although Salmond's campaign has been a cravenly reformist one even in terms of an independence movement - accepting the continuation of the monarchy, the domination of sterling and the Bank of England, and so on, I think that a Yes vote is likely to start a rapid momentum towards total separation from the monarchy, sterling etc.
Thirdly, the large amount of progressive voters in Scotland has already caused Scotland to move towards more social democratic welfare policies than in the rest of the UK, which is why, as Steve correctly points out, Salmond has had to emphasise more radical issues in his debates with the No campaign. I think that this tendency will only accelerate after independence.
Moreover, the campaign for independence has by its nature tended to radicalise the population. Whatever tactical statements Salmond has put forward in order to reassure the more conservative voters, the core of the independence campaign is pro-democratic, anti-British establishment and anti-Tory.
 Of course, no one on the socialist side of the Yes campaign is arguing that an independent capitalist Scotland will be able to solve the problems of the Scottish people. But it will remove the Scottish Nationalists' arguments for independence which have cut across class politics for a long time. Once Independence is achieved, Salmond and his ilk will be increasingly exposed for the tartan Tories that they really are.
With the correct strategy on the Left there is every chance that the left inside the Scottish Labour Party will grow, while the radical wing of the independence movement is likely to foster the formation of a new mass left party - this is  the strategy of the Scottish Socialist Party who recognise that their Party has been irretrievably damaged by the Sheridan fiasco. Their perspective is that a socialist overturn in an independent Scotland is far more likely than in Britain as a whole. On this I think that they have a good case.
Fourthly, the same process in Scotland could well be followed in Wales which would again require the radicalisation of the majority there.
As to the situation in England, naturally, it will set back the class struggle for a time. But there is actually a working class majority in England which over time will inevitably assert itself in reaction to the anti-working class policies of the Tories and Liberals. And, surely we shouldn't be arguing for the interests of the English workers over those of the Scottish and Welsh workers? In any case, if capitalism was to be overthrown in Scotland, wouldn't this obviously alter the balance of forces in our favour in England as well as elsewhere.
 I won't comment on Northern Ireland as I think that this raises too many other questions.
Lastly, I think we are in danger at looking at things in a very out of date way. In an increasingly integrated EU is the continued unity of the UK really that important? Even the way that Steve poses it in terms of a united socialist federation of England, Scotland, Wales and Northern Ireland sounds incredibly anachronistic. Surely, if we are talking about a socialist federation we should be calling for a socialist EU / European federation at the very least.
Of course, I agree with Steve's commitment to the maintenance of an integrated labour movement.
I hope that these few comments give a little more balance to the discussion. Whichever position we take on this issue, Steve is right that it is partly a reflection of the bankruptcy of the Labour leadership which has forced many Scottish workers into going down a road that they may not have wanted. Thus we end up having to choose between capitalist options rather than having a socialist one on the table. Unfortunately, it would serve no purpose to take a neutral stance on this. But I think that either position, for a socialist Yes or a socialist No is justifiable and neither should be seen as a matter of principle.   
Stephen M: I think Pat makes some relevant points and certainly we could not rule out his perspective for the likely developments in a break-away Scotland and the consequences for British Imperialism. His point of view does bring more “balance” to the discussion as he says and he is also right that I didn't give enough emphasis to the weakening of British Imperialism if Scotland secedes.
But, I think Pat, one the other hand, is a little too categorical of the consequences of independence and that getting “balance” in any discussion of perspectives means accepting that there a wide variety of variations that could emerge and not rule out there being more than one possible scenario. Perspectives are notoriously difficult to work out because of the numerous influences and sometimes unforeseeable factors which can come into play and the different weight they can bring to bear on future developments. I think we need to approach perspectives flexibly, as a working hypothesis in which we identify the more and also the less likely developments in the near future, but, at the same time, being aware that the current most likely perspective can be altered or even eliminated by the dynamic interplay of numerous factors which we can't predict.
Pat points to a number of likely developments, which could make up our “working hypothesis.” Essentially, he says that independence for Scotland will hasten socialist revolution there and also undermine British Imperialism, thus making socialist revolution more likely throughout Britain and, I think we could add to that, the Republic of Ireland. Of course, from our general Marxist analysis, revolution is inevitable in the British Isles at some pint. The question is would an independent, capitalist Scotland strengthen the working class and accelerate that process. That is the staring point, I think, from which we work out our position on the vote.
Pat's perspective is that independence will strengthen the Scottish working class, principally by clearing the path for socialist revolution once independence is achieved and the nationalists are exposed and discredited. This is definitely one likely perspective that we need to keep in our hypotheses for a post-independent Scotland. But I don't think that independence is a necessary precondition for socialist revolution as this seems to imply. There is no solid reason that it will help the socialist revolution. Did independence for the Republic of Ireland pave the way for socialist revolution? No and this was despite the fact that the independence struggle had a strong socialist character and was led by two revolutionary socialists, Connolly and Larkin, rather than the petty bourgeois Alex Halmond and the SNP. Independence led to decades of right-wing rule under Fine Gael and Finna Fail. For that matter, how many ex-British colonies experienced socialist revolutions following independence? The point is that there is no certainty at all that independence for Scotland will accelerate socialist revolution and no reason to use that as a justification for advocating a Yes vote.
In my opinion, the creation of an independent Scotland could equally become an impediment to revolution. I think there is a possibility is that if the Yes-vote wins, then nationalism could be reinforced for a period at the expense of class politics and class struggle. Initially, there might be a sense of euphoria among many Scots and even if no reforms are immediately forthcoming and the nationalists could expect a period of grace, wherein people will want to give them a chance. Until actual independence is implemented in 2016, the nationalists could argue that continuing socio-economic problems are teething problems of the transition period, which will be resolved after real independence. Even after independence problems would be explained away as an overhang from union with the UK and continuing sabotage by the English bourgeoisie.
At the same time, strikes and protests over jobs and living standards would be denounced by the nationalists as unpatriotic actions undermining Scottish independence and damaging the development of the Scottish economy. They might even organize lumpen youth to attack picket lines and workers' meetings. “Temporary” sacrifices would be asked for in the interests of “getting the nation on its feet.” The nationalists would call on “all Scots” to unite and put aside class interests for “the sake of the nation.”
Independence may bring with it a certain confusion and disorientation on the part of the Scottish working class. Who now is the class enemy? After hundreds of years fighting an English-dominated bourgeoisie in the context of the United Kingdom, who now are we pitted against once we are alone? Is our enemy the Scottish bourgeoisie or the English and if we are still fighting the English who still control most of the economy, how do we fight them now on our own?
Therefore, there may be confusion on how the class struggle should be continued once there is no direct political link to the UK and other British workers. Rather than accelerating the class struggle and the socialist revolution, Scottish workers may feel isolated and their class confidence could even decline. In a situation of crisis where no mass socialist alternative was present the divisions which occasionally flares up between Scottish Protestants and Catholics could becomes a real sectarian conflict, nurtured by the bourgeoisie and the nationalists to divide the working class. The point is that there are lots of possible scenarios and we can't categorically say that the road to socialist revolution will be accelerated by independence.
In my opinion, the problem of the leftist Yes-vote groups is that they are deCLASSifying the issue of independence by viewing this in terms of the “Scottish people” struggling for independence and relegating the independent role of the working class to a point sometime in the future after independence. Of course, the self-determination of the whole of the Scottish people is an important part of the matrix, but there is a danger of drowning the working class in the current independence movement. At best, some left groups misguidedly see this as some sort of mass “working class independence movement” and therefore fail to attack the Scottish nationalists and layers of the bourgeoisie who are behind them.
The position of the pro-Yes Left is based on a number of misconceptions and a tendency to capitulate to a form of Popular Frontism, mirroring that of the Labour right-wing in the No-vote block. At worst, (and I'm not saying people are Stalinists) but the position of the pro-independence Left comes dangerously close the old Stalinist position of alliances with progressive petty-bourgeois democrats and even the progressive elements of the bourgeoisie, because the socialist revolution can only be on the agenda once the “national democratic revolution” has been completed. Therefore, until such time, the workers' movement must subjugate itself to the petty-bourgeois leadership of nationalist democrats.
However, I think firstly that this is giving an imbalanced view of how Scottish workers view the vote and tends to suggest that all the advanced workers are supporting independence. I don't believe that is necessarily the case and that the views among workers is much more complex and sometimes contradictory. Some advanced workers support independence, but equally, many advanced workers are against it. It is not straight forward that workers voting No are backward layers with illusions in British capitalism, the monarchy and the Establishment. Some do, but a large section of these No-voting workers already see through the nationalists for what they are and have few illusions in an independent capitalist Scotland. Consequently, calling for a Yes vote can mean we are cutting ourselves off from an important section of advanced workers. That's also why I still think the demand for a fully devolved Socialist Federation of the Scottish, Welsh, Northern Ireland and England is still relevant in reaching not only Yes voters, but No-voting workers.
Of course, many advanced workers do see independence as a blow against British capitalism as I explained in my other article. But, just as there is a layer of backward workers voting No because of illusions in British capitalism, so are there many backward workers in the Yes camp, who have enormous illusions that Scottish capitalism will be better than British capitalism. Thus consciousness is very mixed and confused and should not be seen as a mass working class vote for independence. Therefore, we can fall into the trap of alienating important layers of advanced workers, by advocating a Yes vote.
Lastly, I don't have time to go into the complex reasons why it is different issue for Wales. As a Welsh person I know that this is quite a different thing in Wales and it would be totally wrong to suggest that Wales will simply mimic or follow the Scottish path of separatism after Scottish independence. The nationalists of Plaid Cymru only have a base in rural areas and have very little following among the working class - the overwhelming majority of whom consider independence for Wales as impractical and damaging, if not absurd.  
RM: Comrades,
I would like to add one small point to the issue of a yes vote being a huge setback and defeat for British capitalism.  This is a very welcome prospect indeed but it is also a considerable problem for US capitalism.  The UK has been US capitalism’s staunchest ally through thick and thin.  Now we see that “failed state syndrome” is not limited to third world countries and former colonial territories.  I do not know enough about the balance of forces in Scottish politics but everything I read and from what the comrades have said, it is much to the left of the rest of the UK.
We can only imagine the horror at an independent Scotland opposing US foreign policy or, at worst, calling Israel a terrorist state like Morales.  There is an editorial in today’s Wall Street Journal and its clear where the WSJ stands raising all the concerns the No campaign doesThe dominant journal of US capitalism is actually threatening the Scots warning them that, ”Scotland’s place within the Western family is far from assured…” and warns further, “…Don’t think Vladimir Putin isn’t watching with interest.”  The Scots have certainly stirred up a global hornets nest and given the global capitalist class something to worry about.

Paisley. Dead. Contemptible creature.

I was born into a small farmer family in Donegal. It had strong belief in the Orange Order. My uncle who brought me up was what was termed at a "Worshipful District Master" of this organization. I was being groomed to follow in his footsteps but that did not work out. However that is another story. As part of this grooming when I was around 12 years old  I found myself in the home of a well off Protestant farmer and merchant. My uncle was collecting a donation from him for a new banner for his Orange Lodge. The farmer merchant was not a member of the Orange Order. He let others do his dirty work for him. Without hesitation he handed over a check for the new banner. I did not realize then I was watching one class finance an organization to represent its interests. Anyway this man asked my uncle had he seen what was going on in the US. He said:"have you seen what is going on over in America, W. Them black boys,(these were his words) they are trying to get up. If they ever get up they will never get them put down again." This was a conscious member of the upper class. He then went on: "And if they get up W. these boys here of ours might want up too. And not only them Catholics but our own kind as well. That is the importance of your organization W. of the Order. It teaches the Protestant worker, our own kind his place. If they were ever to get the notion that they could run things this would be bad. That is why your organization is so important. To keep the Protestant worker in his place" These words live with me to this day.

I remembered them again when Paisley died.  What a contemptible creature and enemy of the working class and especially the Protestant working class. He saw his job as to keep them down, keep them subservient to the sectarian capitalist system that ruled and exploited them. Take one example. When the civil rights movement developed one of its aims was to end the situation in the North where the more property you had the more votes you had in local elections. This was clear discrimination against the Catholic working class in particular as they had less property. But it was also discrimination against the Protestant working class. The Protestant working class who had no property were also discriminated against by this system. You never heard Paisley saying anything about that. The mass civil rights movement ended this unequal voting system. It won one person one vote for all. If my memory serves me right this resulted in up to 150,000 Protestants getting the vote in local elections which they did not have before. If it had been up to Paisley they would not have won this reform.

On top of that Paisley continually would up sections of the Protestant working class into sectarian actions. He continually pushed them into sectarian para military organizations. But he himself was very careful to keep out of these organizations and let ordinary working class youth and workers take the fall. What a contemptible creature and enemy of the working class including the Protestant working class. Sean

Climate and Capitalism: Interview with Naomi Klein

This blog has always stressed that the environmental crisis is perhaps the most pressing issue facing the working class today.  This is an interview with Naomi Klein about her latest book and we share it for our readers' interest.

 Interview BY
SEPTEMBER 12, 2014
ISSUE #

The fact that global warming is man-made and poses a grave threat to our future is widely accepted by progressives. Yet, the most commonly proposed solutions emphasize either personal responsibility for a global emergency (buy energy-efficient light bulbs, purchase a Prius), or rely on market-based schemes like cap-and-trade. These responses are not only inadequate, says best-selling author Naomi Klein, but represent a lost opportunity to confront climate change’s root cause: capitalism.

This Changes Everything: Capitalism vs. the Climate, Klein’s much-anticipated new book, is both surprisingly hopeful and deeply personal as she deftly weaves in her story of struggling to conceive her first child while researching the potential collapse of the natural world. In the book, Klein challenges everyone who cares about climate change to strive for a seemingly impossible redistribution of political and economic power. This, she argues, is both necessary and offers the prospect of living in a more just and humane society than the one we know today.

John Tarleton: When it comes to the climate crisis, capitalism is often the elephant in the room that goes unacknowledged. Yet you zero in on it, starting with the title of your book. Why?
Naomi Klein: I put the connection between capitalism and climate change up front because the fact that the life support systems of the planet are being destabilized is telling us that there is something fundamentally wrong with our economic system. What our economy needs to function in a capitalist system is continuous growth and continuous depletion of resources, including finite resources. What our planet needs in order to avoid catastrophic warming and other dangerous tipping points is for humans to contract our use of material resources.

The science of climate change has made this fundamental conflict blindingly obvious. By putting that conflict up front, it breaks a taboo. And sometimes when you break a taboo, there’s sort of a relief in just saying it. And that’s what I’ve found so far: This is something that people know. And it’s giving permission to just name it. It’s a good starting point, so now we can have a real discussion.

Why has that taboo of talking about capitalism and climate change in the same breath become so entrenched here in the United States?
I think it’s primarily because capitalism is a religion in the United States. But also because the Left in the United States is extremely Keynesian, though Keynes himself questioned economic growth. But the translation of Keynesian thought we are seeing in this historical moment is a debate about the distribution of the spoils of economic growth. It’s not about some of the core facts about blanket economic growth. 

In the book I talk about selective de-growth. There are schools of thought on the Left that dismiss all forms of growth. What I’m talking about is managing the economy. There are parts of our economy that we want to expand that have a minimal environmental impact, such as the care-giving professions, education, the arts. Expanding those sectors creates jobs, well-being and more equal societies. At the same time we have to shrink the growth-for-growth’s-sake parts of our economy, including the financial sector, which plays a large role in feeding consumption.

You say that the Left needs its own project for addressing climate change in a systematic and transformative manner that breaks with free-market orthodoxy. What would that look like?
The industrialized nations have to start cutting their emissions by about 8 to 10 percent per year, which is incompatible with capitalism. You cannot reconcile that level of emission reduction with an economic system that needs continual growth. The only time we have seen emissions reductions on that level was during the Great Depression of the 1930s. How we transition from our current status quo sets the parameters for how we want to organize society. A healthy transition would entail huge investments in the public sphere, public transit, housing, all kinds of infrastructure and services in order to prepare for the extreme weather that’s already locked in and also to lower our emissions.
Progressives should seize the reins of this project because it’s an opportunity to make this transition equitable and to have a better economy on the other side. You could also allow your economy to crash and burn, which is a terrible idea and would hurt enormous numbers of people.

The latter option would make a good starting point for a Hollywood movie.
It’s striking to me that when we envision the future it’s just a more brutally cleaved world between haves and have-nots than the one we have now. This is so much a part of our culture that we think all we’re capable of doing is becoming like the societies portrayed in Snowpiercer, Elysium or The Hunger Games. It’s actually not controversial to say this is where we are headed. The question is, can we imagine another way of responding to crisis other than one of deepening inequality, brutal disaster capitalism and mangled techno-fixes, because that seems to be where people agree we’re headed.

The alternative project you have in mind envisions a large role for the state. Yet, many on the Left have deep qualms about holding power of any kind, much less “seizing the reins,” as you say, to affect systemic changes.
There has been a backlash in our generation of leftists against the centralized state socialism of previous generations. This is for obvious and understandable reasons. Since the 2008 economic crash, I see more appetite among the younger generation to engage with policy and to try to change power. You see it with the Indignados movement in Spain forming its own party and running in elections, in Iceland post-crisis, with outsiders going inside on their own terms. You see it at the municipal level with the minimum wage in Seattle.

Where the pendulum swung really hard against any sort of engagement with formal politics, I see it swinging back where it’s like, “No, we’re not going to replicate those centralized structures but things are too urgent and too dire to ignore institutions of various kinds, including lawmaking. But we’re going to try to change it and build our belief in decentralization into the way we engage.“

Has this approach made a significant impact anywhere on energy and climate-related policies?
A really great example is the energy transformation that has been going on in Germany. Thirty percent of the electricity produced there is now coming from renewable resources, mostly wind and solar and mostly through decentralized, community-controlled ventures of various kinds, including hundreds of energy co-ops. You also have large cities like Munich voting to reverse their electricity privatizations and become part of this energy revolution.

What’s interesting about Germany is it really shows how you need strong policy to make a transition like that happen. It’s not about, “Hey, let’s start an energy co-op.” No. That kind of fetish for very small-scale initiatives won’t get us where we need to go. What Germany has is a bold national policy. That’s how you get to 30 percent renewable electricity in such a short time, and they may very well get to 50 to 60 percent by 2030. It also shows you can design smart policy to systematically decentralize.

What got you started on this book? Was there a specific moment when you realized you wanted to write a book on climate change?
I decided that I was going to immerse myself in this subject in 2009 when I was covering a U.N. antiracism conference in Geneva. An earlier conference held in Durban, South Africa, in September 2001 saw a growing debate about whether the United States and Europe should pay reparations to African nations for the harm done by the slave trade and colonialism. The issue vanished from public discussion after 9/11 and it was clear by 2009 how much ground had been lost.

At that 2009 conference I met Angélica Navarro, a trade negotiator from Bolivia who was doing some really interesting work about climate and reparations and how to really push the concept of climate debt within the U.N. climate negotiations. And I had a moment in which I realized that the science is so clear on the historical responsibility for climate change that it could be used as a tool for realizing justice goals for which social movements had been fighting for a very long time.
Your book strikes a hopeful note on what can be a grim topic. 

I find it really hard to write when I feel hopeless. It took me five years to write this book in part because initially I didn’t feel so hopeful. Then, there really started to be an explosion of resistance to extractive projects such as fracking and oil pipelines and coal export terminals. It’s being done in a truly global and networked manner that reminds me of the early days of the so-called anti-globalization movement.

That shift made me really excited that there is a growing movement and that the book can be part of that movement. I feel like we’re on the verge of a coming together of economic justice movements and a new sort of kick-ass grassroots anti-extractivism movement. When people are fighting fracking or they’re fighting a big pipeline, generally they’re not driven by concerns about climate, they’re driven by a love of place. Often the protection of water is the primary motivation, as well as concerns about the health of their kids. But climate change definitely adds another layer of urgency to keeping carbon in the ground and not putting it into the atmosphere.

You became a parent for the first time a couple of years ago. How did that experience affect the way you see climate change? Did the prospect of dire climate change taking effect in this century cause you to be hesitant about becoming a parent?
I was 38 when I decided I wanted to have kids and to start trying. That’s pretty late. I would have this conversation with my husband where I’d say that the more I read about climate change, the more I felt that having a child was condemning this kid to a Mad Maxian future of fighting with their friends for food and water. This was the sort of dystopic future that I was imagining. And I was having trouble imagining anything else.

I think that seeing some of these signs of hope were part of the process of me deciding to become a parent: being able to imagine other futures than the one playing on repeat at the moment. But I’m really wary of this sort of, “I care more about the future because I have a baby” thing. As somebody who didn’t have kids for a long time and had trouble getting pregnant, I really hated when people did that, because it felt really exclusionary to me. I understand, as a parent, why people say that, because when you hear that we’ll be at x degrees warmer by 2050, you can’t help but do these mental calculations of, “Okay, how old will he be then?” But I cared about the future before my son Toma was born just as some of the most caring people that I know don’t have kids. So I want to be careful about that.

There’s a tremendous organizing effort taking place here in New York for the People’s Climate March. Why do you think this particular protest matters, and what are the chances it will have an enduring impact?
Climate change has gone from being an issue that will affect our grandchildren to a right-now issue. The difference over the past few years is that the climate movement has jettisoned its astronaut’s “eye in the sky” view of a shimmering blue-and-white dot set against the darkness of space in which no people are visible, and it has come down to earth.

It’s connecting with people who are driven by basic justice demands such as clean air for their kids and water they can drink. The People’s Climate March will be much more diverse and it’s going to be angrier than previous climate protests. That anger is a really important and powerful tool. So I think we’re going to see a different kind of climate movement. It’s already there. I think Seattle 1999 was a coming-out party for the global justice movement, and I think this will be a coming-out party of sorts for a new climate movement.

There have been other moments over the past two decades, from the Rio Earth Summit to Al Gore’s movie to Hurricane Sandy, that have seen climate change briefly capture the public imagination only to fade out again. 
In the past the climate movement was incredibly elitist. There really was a belief that you did not need a grassroots movement if you had all the celebrities and the billionaires and a former vice president like Al Gore on your side. I think that is what has made the issue so ephemeral. If your strategy is just to get a bunch of celebrities and billionaires on your side, guess what? They change their minds, and they move on to other things. Vanity Fair launches their annual green issue and it lasts for two years. Fashions change.

This is the first time climate change has had a grassroots movement behind it in North America. And that’s what is going to give it staying power. The whole point is that it has roots now. The problem with the top-down strategy is that it has no roots. And when you don’t have roots, you can blow away.

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Strike Victory: No more two-tier at Lear

Reprinted from Fightback News

Auto parts strike achieves major victory - no more two-tier wages at Lear Corporation

By J Burger |
September 15, 2014
Read more articles in
Enter a descriptive sentence about the photo here.
UAW defeats two tier wage structure at Lear Corporation. (FightBack!News/Staff)

Hammond, IN - By 4:00 p.m. Sept. 14, the negotiating committee from UAW Local 2335 had reached a tentative agreement with Lear Corporation. Over 700 workers walked off the job Sept. 13 demanding an end to the two-tier wage structure. In a major victory in the auto industry, the employer agreed to abolish the double standard in wages. Workers will return to work on Sept. 15 and have yet to ratify the agreement.

Fight Back!
caught up with Mike Elliot, the chair of the Union Solidarity Committee of UAW Local 551 at the Ford assembly plant in Chicago. His local is the only local in the UAW that has a standing committee like this. Its mission is to build solidarity with other unions and social justice groups and mobilize members from the plant to picket lines, fights for justice, for women’s rights, human rights and even anti-eviction campaigns.

“Without solidarity, none of this would be possible. We set up shifts and brought out a great number of our members to the pickets lines at Lear,” Elliot said. “It was announced this afternoon that Lear Corporation agreed to abolish the two-tier wage structure and increase workers at the top by 1.5%”. The details of the agreement have not been made public yet, but workers on the picket lines were celebrating their fight today.

Elliot expressed how important this is to the 4500 workers at the assembly plant. “Our contract expires next year on Sept. 15, 2015. This is a major blow to what divides the workers: a two-tiered wage structure. You cannot survive long if you have people working next to one another doing the same work and one person is paid half of the other person.” Members of UAW Local 551 will be carefully building for their fight next year to dump the two-tier system there, he added.

Sunday, September 14, 2014

Can I be a socialist and have things that work?

The evidence that I sold out
by Richard Mellor
Afscme Local 444, retired

It's no fun being a damn socialist in America.  I was down the pub tonight, or this afternoon and part of the early evening and was enjoying a nice pint and listening to a local musician ply his trade.

As readers might be aware, I am a retired public sector worker.  We, or most of us, tend to have better working conditions, wages and benefits when compared to our private sector comrades.  This is why we are under attack.  Individuals that earn $5 billion a year clipping coupons, selling currencies or laying off workers and the like are given hero worship status but public sector workers, or any worker,  that might have a pension that we can live on, are demonized, are blamed for destroying the American way of life along with Muslims and Arabs and foreigners of all sorts.

So someone noticed my glasses.  My wife is still working and she is also a public sector worker so I still have the benefits that this type of work gives married couples. My glasses are new, only a week old.  Apparently, some Italian guys name is on the side of the frame. His name is Giorgio Armani.

Man, did I take some crap.

"Oh, designer glasses are they"  said one friend who shall go unnamed.

"What's a socialist doing wearing Giorgio Armani glasses" says another derisively.

"I'll bet you never put that on your blog do you?" says a third.

"I dare you, go on, put that on your commie blog."  another guy who I thought was a friend told me.

Well, here it is.  Now I know they were all teasing me, and I did make the point that this Italian never
There's no way this guy made anything
made my glasses some Cambodian or Vietnamese worker probably did, someone who can't even afford to buy the glasses she's making. The Italian just signed his name on the frames and took all the money.

Now these may be good glasses and they may not be. They seem pretty good to me and they do fulfill the criteria I asked of the woman that sold them to me, they make me more handsome. Coupled with the handsome pills I take, I think I'm on a roll.

But the most important thing, and what irritates the 1% the most, is that an ordinary worker can have a wage they can live on, a retirement they can live on and glasses that do the job.

As my friend said to me tonight, as I tried to defend my new glasses, and he was  mocking me really, "Richard will just say we all should have these glasses."

He's right about that I guess.

World economy: getting back to trend?

by Michael Roberts

The latest high frequency indicators of economic activity in the major economies suggest that global economic growth picked up a little in the summer. Based on my measures of the so-called purchasing managers indexes (PMIs), business activity in both the advanced capitalist economies and the so-called emerging economies is up from a weaker first quarter.
Business activity indexes
This would suggest a global annualised growth rate of about 3.0-3.5% for 2014. That’s better than the first quarter by some way, but still below the rate achieved in the recovery from the Great Recession in 2010.
Global PMI
And, as has been documented in this blog and in many other places, the economic recovery from the Great Recession has been the weakest of all recoveries from slumps since the second world war. Since the end of the Great Recession, world industrial production growth has averaged only 40% of the rate achieved before the Great Recession and only 60% of the long-term average. The productive sectors of world capitalism are crawling along.

And that conclusion also applies to the US, the economy that has achieved the best recovery of the all major capitalist economies (G7) since 2009. The US GDP is still 5% pts below its ‘full potential’, even though it has been the US economy that has led the way in this ‘recovery’. The last set of US GDP and employment figures, as I outlined in a previous post (https://thenextrecession.wordpress.com/2014/08/29/the-us-recovery-the-long-depression-and-pax-americana/), suggest that the US economy is expanding at little more than about 2% a year, well below the post-war average of 3.3% and even more behind the pre-crisis rate.

However, there is more talk among mainstream economists that the US, at least, is now on a path of sustainable ‘normal’ growth, something I questioned in a recent post
(http://thenextrecession.wordpress.com/2014/08/14/the-myth-of-the-return-to-normal/).

Gavyn Davies, former chief economist at Goldman Sachs and now a columnist for the FT, reckons that the US recovery now looks sustainable. Davies recognises that global financial crashes and slumps combine to limit and delay economic recovery, but: “such recoveries are slower than normal in their early phases, and they therefore take much longer to bump into supply constraints. On average, such shocks are followed by economic recoveries that last for 8-9 years, as compared to 5 years for the present US recovery. At about the current stage of the recovery, they actually tend to speed up a bit.” http://blogs.ft.com/gavyndavies/. And he quotes the work of his old employer, Goldman Sachs, which shows that the US economy could at last be about to head back to the trend growth rate of the past (see graph below).
Wolrd recovery cycle
The evidence of the weekly US economic indicator ECRI would also suggest that the US economy might be reaching a lift-off point.
ECRI
But these activity surveys are the only evidence that I can find for Davies’ assertion. US business investment shows little sign of a significant pick-up and corporate profits have actually stopped rising.
US business investment level
Employment growth remains lacklustre and real wages for average Americans are flat at best. Indeed, the latest Federal Reserve survey of household finances shows that median family incomes in the US have dropped so much in real terms since the Great Recession that they are now no higher than they were 16 years ago!
(http://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf).
US median family income
So a Keynesian-style demand boost for the US economy from household spending looks unlikely. If consumption and business investment remain in the doldrums, so will the US economy.

The United Nations Commission for Trade and Development (UNCTAD) just released its annual report on the global economy. UNCTAD remains gloomy about a return to normal (http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=981). UNCTAD concludes “six years after the onset of the global economic and financial crisis, the world economy has not yet established a new sustainable growth regime. With an expected growth between 2.5 and 3 per cent in 2014, the recovery of global output remains weak.” It points out that “international trade remains lacklustre. Merchandise trade grew at close to 2 per cent in volume in 2012−2013 and the first few months of 2014, which is below the growth of global output. Trade in services increased somewhat faster, at around 5 per cent in 2013, without significantly changing the overall picture. This lack of dynamism contrasts sharply with the two decades preceding the crisis, when global trade in goods and services expanded more than twice as fast as global output (at annual averages of 6.8 per cent and 3per cent respectively).

UNCTAD, being an institution that is somewhat ‘off message’ compared to the IMF and the World Bank, calls for coordinated global action by governments to reverse ‘market liberalism’, reduce inequality and follow the prescriptions of Pope Francis (see my post, http://thenextrecession.wordpress.com/2013/11/28/ayn-rand-pope-francis-and-the-philosophy-of-greed/)!

Don’t hold your breath.

Saturday, September 13, 2014

Oscar Pistorius murdered a real person, she had a name.

From Janine Booth.
RIP Reeva Steenkamp


Her Name Is Reeva

Her name is Reeva
Reeva Steenkamp
Not 'Oscar Pistorius' girlfriend'
Not 'model'
Not 'reality TV star'
Her name is Reeva

Her name is Reeva
She was not just a model
But also a law graduate
She was not just a reality TV star
But also a campaigner against violence

The story is about her killing
Not about his fame
Or it ought to be
Her name is Reeva

His name is Oscar
Oscar Pistorius
And every news report calls him that
Her name is Reeva
Sometimes mentioned
But only after 'his model girlfriend'

He slept with guns
She is one of fifty victims of homicide every day in South Africa

Her name is Reeva
She is a woman, a person in her own right,
Not an appendage of the celebrity who killed her
Even now she is dead
She still has a name
Use it please

Friday, September 12, 2014

Video: Ironworkers wildcat strike in San Francisco.

The Ironworkers wildcat strike in San Francisco is taking place as the Carpenters wildcat strike did in 1999 in a booming economy.  The worker says it so clearly in this video, that the cranes are all over the place, there's a boom, the hall is empty etc. It places workers in a stronger position.

A building trades worker once said to me he knew nothing about economics.  But then, he knew if the union hall was empty the economy was good, if it was full, the economy was bad. We know about economics in our own way, not in an academic abstract way, but in a concrete way.

But we have to reject this idea that any one or any group of us are more important than the other.  The worker talks about how the ironworkers are the foundation, are the most important part of the project.  But we cannot beat the bosses alone.  The UAW didn't the steel unions didn't, no union alone can.  The main problem as a worker commented in this video is that the union leadership has the same world view as the bosses.  They support capitalism, they worship the market, they stress competition.  But unions were built to protect us from the market not facilitate competition between us.

But more important than this failure of our own leadership, their collaboration with the bosses, is that we must build a generalized movement, a united front of struggle.  Not just union workers but all workers, the unemployed and the unorganized and our communities and the youth who have no future as things are. This is how the unions were built in the first place along with defying and violating the bosses' anti-union laws. This is what will turn this tide.

Missionaries and land.

I like that one by Bishop Tutu. "When the missionaries came to Africa they had the bible and we had the land. They said let us pray and we closed our eyes. When we opened them again we had the bible and they had the land." Sounds about right. And we could add the missionaries brought with them all the homophobic bigotry, the sexist bigotry, the special oppression of women, private property.

Sean.