Monday, January 31, 2011

can't pay - can't eat

"Hunger is not a food production problem. It is an income problem." said Robert Fox of Oxfam Canada. "There is no food shortage in the world. Food is simply priced out of the reach of the world's poorest people."

It is clear now however that, for every death from hunger, there is no genuine technical cause. For every child's life that hangs in the balance, sufficient food has always been available within a matter of hours – if not in some cases minutes – distance. It’s not a logistical problem or a matter of distribution.

Neither is it an error in the market: the system is operating as it is meant to.

In reality the signal which the market often responds to is not one regarding supply and demand but the one identifying profitability. The entire edifice of the money system is not geared to satisfying the needs of people for even the simplest means of living, such as food. Instead the objective is nothing more or less than profit, and it is an objective shared by the small minority who own and control the means of producing wealth to the exclusion of the rest of us. The invisible hand of the market can send all the signals it wants, but there is often an invisible hand picking up a telephone to tell fellow capitalists to keep stocks back, restrict sales and keep prices high.

Irish income inequality

In Ireland new research published today shows the gap between rich and poor has widened significantly since 1987. The wealthiest ten per cent of Irish people have seen their riches grow by a greater factor than anyone else’s since 1987, according to a new report published by Social Justice Ireland today.The research reveals that the top 10 per cent of Irish households receive almost a quarter of total disposable income, up 1.3 per cent since 1987. In comparison, the bottom 10 per cent of households receive just 2.2 per cent of all disposable income, almost 11 times less than that of those in the richest households. The distribution of Ireland’s riches was so unequal, the report added, that the share enjoyed by the richer families – 24.48 per cent – was almost as much as the amount earned by the poorest 50 per cent of homes.

620,000 people, equivalent to 14.1 per cent of the population, almost one in every seven people, are at risk of poverty and says this figure would be much higher if it wasn't for social welfare payments. The group claims that without the welfare system, Ireland's poverty rate in 2009 would have been 46.2 per cent.

Over 140,000 people are now long-term unemployed - the highest since the late 1980s.

The minimum disposable income ( Disposable income is the amount of money households have to spend after they have received employment/pension income, paid all their taxes and received any welfare entitlements) required to avoid poverty in 2001, according to Social Justice Ireland, is €228.18 per week for a household with just one adult, equivalent to €11,585 on an annual basis. For a household containing two adults and two children the minimum disposable income needed is €515.46 per week, equivalent to €26,877 annually.

Sunday, January 30, 2011

Protest News

3 members and a sympathiser distributed leaflets yesterday in freezing conditions at the beginning of the student protest march against the cuts in London.

Everybody else was there too, including a re-incarnation of Militant in the form of "Militant Student" (same typeface as in the days of the Militant Tendency) put out by the followers of the late Ted Grant. But they haven't changed. If you read the small print (and it's all small print) you discover:

"The period that started with May 1968 was a period of capitalist crisis and revolutionary movements in France, Spain, Portugal, Greece, Italy, Britain and other countries. To that list we can add Pakistan, Chile, Argentina and many other countries. But [...wait for it...] in the absence of a genuinely revolutionary leadership, in every case the movement was derailed and defeated."

Since the student demo was apparently organised without leaders by Facebook, twitter, mobile phone, etc, it's rather surprising that they can get away with this sort of thing in this day and age (probably, and hopefully, they can't and won't ).

Also surprising (at least to us since we hadn't realised it was so mad) was their analysis of events in Eastern Europe and Russia over 20 years ago:

"In Europe, the counter-revolution took place under the flag of bourgeois democracy, but it was a counter-revolution nonetheless."

Mad as this analysis is, it does follow if you think the state-capitalist dictatorships there were some sort of "workers state". I suppose that they prefer the situation where Trotskyists are sent to a labour camp in a "workers state" rather than be able to openly publish their rubbish in a "bourgeois democracy".

Are Americans Complacent

Egyptian, Tunisian and Yemeni protesters all say that inequality is one of the main reasons they're protesting. However, the U.S. actually has much greater inequality than in any of those countries. Specifically, the "Gini Coefficient" - the figure economists use to measure inequality - is higher in the U.S.

Gini Coefficients are like golf - the lower the score, the better (i.e. the more equality).

According to the CIA World Fact Book, the U.S. is ranked as the 42nd most unequal country in the world, with a Gini Coefficient of 45.

In contrast:

* Tunisia is ranked the 62nd most unequal country, with a Gini Coefficient of 40.

* Yemen is ranked 76th most unequal, with a Gini Coefficient of 37.7.

* And Egypt is ranked as the 90th most unequal country, with a Gini Coefficient of around 34.4. ( similar to the UK figure )

Why are Egyptians rioting, while the Americans are complacent?

One reason is that Americans consistently underestimate the amount of inequality in the nation. Americans thought the richest 20 percent of US society controlled about 59 percent of the wealth, while the real number is closer to 84 percent.

Saturday, January 29, 2011

Bankers Bonuses

How big are these bank bonuses?

Barclays' boss Bob Diamond seems set to receive an £8m bonus; Goldman Sachs has set aside $15.3bn (£9.5bn) for bonuses and salaries to pay its staff in 2010 – an average of $430,000 (£270,000) each.

The average nurse in the UK makes £18,000 per year, or the average bin man £22,000 per year, or £346 and £423 per week. This compares to the average Goldman Sachs pay of £270,000 per employee, which works out at roughly £5,200 per week. For comparison, the average wage in the UK is £26,000 per year for all employees and £31,200 for full-time employees, or £600 per week, according to the Office for National Statistic’s just published ASHE (Annual Survey of Hours and Earnings) survey for 2010.

So, we can say that an average Goldman Sachs employee makes ten times more than the average employee in the UK. But this might translate to a net income for the average UK employee of £25,000 a year, or £480 weekly; accordingly it would take at least ten years for the average employee to earn the kind of money a banker makes in one.

If a banker earns more than £150,000 before tax, or £104,000 after tax, he is in the top 0.6% of the UK population ranked by income.


we are not beggars nor thieves

"Egyptians are sick and tired of being corrupted, and when you live on 300 pounds a month [about $51], you have one of two options, you either become a beggar or a thief," said Ghada Shabandar, a longtime human-rights activist. "The people sent a message: 'We are not beggars, and we do not want to become thieves.' "

Elections are rigged. Corruption is rampant. Life gets more difficult for the masses, as the rich grow richer and the poor grow poorer. That is Mubarak's Egypt, where about half the population lives on $2 a day or less, and walled compounds with green lawns and swimming pools and names like Swan Lake spring up outside cities. It is a place where those with money have built a parallel world of private schools and exclusive clubs, leaving the rundown cities to the poor.

"The whole system is seen as being his fault,"
said Anne Mariel Peters, an assistant professor at Wesleyan University, who follows events in Egypt.

Friday, January 28, 2011

The Lessons of East Europe

Tunisia is being viewed as the 'Arab world's' Poland. Will there be a cascade effect similiar to that which toppled the tyrannies of East Europe over two decades ago? Protests involving thosands of workers are taking place currently in Egypt and Yemen. In Egypt, workers in the riot police are using rubber bullets and tear gas (from the US) as well as water cannon against those defying the curfew and demanding basic democratic 'rights'. When members of the police start joining the protestors as they did in Tunisia then, perhaps, the present ruling clique will turn tail and join the recently ex-president for life Zine El Abidine Ben Ali in Saudi Arabia. Support for regime change from other members of the capitalist class will likely provide the final nail in the coffin of the Mubaraks and their allies. To be sure, Socialists prefer what passes for democracy in capitalism to dictatorship but as the cover of the 'East Europe Special' Socialist Standard reminds us - "Welcome to the West...Unemployment, Homelesness, Poverty" - democracy is of itself no panacea.

Before the end of 1989 few people had heard of the Rumanian town of Timisoara. Since then it has added its name to Tiananmen Square and the many other places where workers have been gunned down in their struggles for democracy; such blood has stained the streets of cities throughout the world. In Rumania the price was high and we salute the selfless courage and the sacrifice of men and women who put their lives on the line demanding freedoms which are vital to the interests of workers everywhere. There would be many political points on which Socialists would disagree with those who rose against their oppressors in Eastern Europe but we also acknowledge that they risked their lives trying to establish the conditions in which free trade unions and a genuine socialist movement could operate.

Since the second world war, the enforcement of political tyranny in Eastern Europe has cost the lives of incalculable numbers of workers and brought untold misery.

A further crime that has been perpetrated has been against the integrity of ideas in the claim that socialism exists in Russia and Eastern Europe. A distinction must always be made between the fraudulent claims of ideology and the real facts of productive relations. In Russia and the countries of Eastern Europe there is commodity-production, wage-labour and capital, the accumulation of capital through the exploitation of workers, the market, rent, interest and profit; that is to say, all the economic features of capitalist society, organised mainly through the state for the benefit of a privileged class. The wealth robbed from the workers and enjoyed by the Ceausescu family with its millions of pounds deposited in foreign accounts was only one example of the luxury lifestyle enjoyed by the rich in the state capitalist countries.

Despite these facts it has suited the propagandists of both East and West to describe those systems as socialist. The Russian rulers needed to cloak the reality of their vile system with an acceptable ideology and for Western propagandists, this gave them an ideal opportunity to discredit the name of socialism.

It was inevitable that the oppressive forms of state capitalism in Russia and Eastern Europe would degenerate into chronic inefficiency. It is impossible to allocate such vast resources to repression, to engender corruption, cynicism, low morale and outright lack of enthusiasm and at the same time expect to be well ahead in the world league of rates of productivity and industrial growth. However, it would be wrong to say that the pressures for changes have originated at the top. Leaders like Gorbachev have reacted to a situation created by Russian workers through their many forms of passive resistance including their unwillingness to apply themselves conscientiously at work.

In Poland, East Germany, Czechoslovakia, Hungary, Bulgaria and Rumania despite the intimidation, the workers took courage into their hands, came onto the streets and openly defied their oppressors. What has been impressive has been the sophistication of the ways in which these workers have conducted themselves. By their nature these events could not be well planned in advance, the movements had little structure of organisation behind them, yet despite these disadvantages in every case except Rumania (which was not the fault of the workers) they managed to conduct themselves without great bloodshed in a dignified and self-controlled manner.

With greater freedom of movement and expression, for the first time in many years, the genuine voice of socialism can now be carried to those countries. When we see these oppressive structures collapsing, what is being demonstrated is the power and force of popular consciousness. So, when we say that a majority of socialists will be able to take over the state and establish a system of co-operation and direct production for human needs on the basis of common ownership, the workers' ability to carry this through has been demonstrated in Eastern Europe over the past few weeks.

When we say that in recognition of their common interests throughout the world, workers can co-operate and act simultaneously in each country; that a socialist majority will be able to organise this great revolutionary change through a series of fast-moving events in a level-headed and self-controlled manner, the ability to achieve all these things has also been demonstrated by the working class in Eastern Europe.

These are the grounds on which Socialists can be greatly encouraged by recent events. Having seen these vile and despotic structures continue intact decade after decade, we might have been excused for thinking that they were so firmly in place that they would last for ever. In fact, they were so fundamentally weak that they collapsed overnight.

Having seen world capitalism stagger on decade after decade, similarly we could get the impression that it is so firmly entrenched that it will remain for ever. In fact, confronted by a socialist majority, the lesson is that it will prove so fundamentally weak that its abolition will be a mere formality causing it to dissolve into history.

(Socialist Standard, February 1990)

Thursday, January 27, 2011

German Immiseration

The German Institute for Economic Research (DIW) defines “middle class” as people who have at their disposal between 70 percent and 150 percent of the average after-tax income. For a single person, that means between €1070 and €2350 per month. despite falling unemployment, the proportion of individuals and families living on roughly average incomes has dropped, weekly Die Zeit reported.

Germany’s "middle class" has been steadily shrinking since the late 1990s. The share of middle income earners as a proportion of the population fell from 59.2 percent to 58.7 percent over the course of 2008 – the last year for which reliable figures are available. Ten years earlier, the figure had stood at 64 percent.

Figures released Tuesday by the Federal Statistics Office (Destatis) revealed that the proportion of Germans at risk of poverty had risen from 12 percent in 2004 to 15.5 percent in 2008. The EU defines a person as being at risk of poverty if they are forced to live on less than 60 percent of the average income, including state transfers such as welfare payments. In Germany, this amounted in 2008 to €11,151 per year for a single person. Some 62 percent of unemployed people and 37.5 percent of singles are regarded as at risk of poverty, along with 14.9 percent of pensioners.

Wednesday, January 26, 2011

Davos decision-makers

CEOs, government leaders and academics around the world are headed to ski-resort Davos, Switzerland, for the World Economic Forum's annual meeting - a power gathering that mixes business, politics and champagne. It is an event that draws a wide range of decision makers, from Jamie Dimon, chief executive of JPMorgan Chase, to the Prime Minister of Greece, George Papandreou, to U2's Bono. Russia's President Dmitry Medvedev will go ahead with his trip to the opening of the World Economic Forum in Davos, despite the bomb attack in Moscow. The five-day conference - from Wednesday to Sunday is really about one thing: networking.

A raft of European leaders will try to make their mark on the agenda. German Chancellor Angela Merkel, buoyed by a strong domestic economy, is likely to outline her plans for the eurozone, while French President Nicolas Sarkozy will find it a challenge to follow up his speech last year in Davos - a passionate bashing of bankers and Anglo-Saxon style capitalism. UK Prime Minister David Cameron is also set to come to Davos, accompanied by his deputy Nick Clegg and Chancellor George Osborne. 2,500 global leaders including 30 heads of states will participate. (Rupert Murdoch cancelled his visit in order to personally lead negotiations with the culture secretary, Jeremy Hunt, in an effort to get News Corporation's £8bn buyout of Sky approved)

The question they should be all asking is whether Davos will get it wrong again - as in 2007 and 2008, when all those business leaders and experts failed to spot the imminent financial and economic meltdown.

Just to have the opportunity to be invited to Davos, you must be invited to be a member of the World Economic Forum, a Swiss non-profit group founded by Klaus Schwab, a German-born academic. There are several levels of membership:
The "Basic" , which will get you one invitation to Davos, costs 50,000 Swiss francs, or about $52,000. The ticket itself is another 18,000 Swiss francs, plus tax. But that just gets you in the door at Davos, with entry to the general sessions.
If you want to participate in private sessions, you need to step up to the ''Industry Associate'' level. That costs $137,000, plus the price of the ticket.
''Strategic Partner'', permits an entourage of five and the price tag - $527,000. This year, all strategic partners are required to invite at least one woman along as part of an effort to diversify the attendee list. Nor is the forum accepting new applications to become ''strategic partners'' unless the company is from China or India and must be one of the 250 largest companies in the world.

All those costs, of course, don't include the travel-related costs of getting to Switzerland, schlepping around and perhaps holding a dinner or a cocktail party for clients (the real action).At the Posthotel, the restaurant is charging a minimum of $210 a head. A cocktail party for 60 to 80 people for just one hour? That costs about $8,000.One investor is renting a five-bedroom chalet just outside Davos at $140,000 for the week. A car and driver is $10,000 a week.

From here

the public sector class war

It is all "greedy unions," "extravagant benefits," "unaffordable pensions," and "shared sacrifice." The corporate media are encouraging people to resent the benefits of civil servants rather than the big bonuses paid at Goldman Sachs, to disregard the re-distribution of income from the bottom upwards, to ignore the fact that fewer Americans have a bigger slice of the pie than ever before.

Are teachers really that well paid? Do health care assistants really have platinum-plated pensions? Do fire fighters really have "overly generous" health benefits? There are countless tendentious manipulations of the private vs. public sector compensation data by corporate-backed think tankers out there. That's what they get paid to do. Simply looking at public vs. private pay averages is deceptive.Governments do not have many minimum-wage jobs, whereas the private sector offers at least 10 million of them. Government work forces tend to be older and better educated, and thus better paid. The private sector generates temporary jobs that tend to be lower paid, part-time and without benefits (80 percent of the jobs created by the private sector in November are temporary). Governments generally produce positions that tend to be more secure, full time and with good benefits. There's no doubt that most small businesses do not offer health benefits as generous as those found in government, if any at all.

One study of federal government vs. private compensation for nearly 600 comparable positions found that civil servants make 20 percent more on average. But again, averages are often deceptive. Another study, which adjusted for the variables of age and education, found that pay for local and state jobs is about 7 percent lower than in the private sector. Look at the pay for physicians, IT types, engineers, lawyers and other professionals in the public sector. It can be half or less of what one finds in the private sector. Compare public employee benefits to those for staff at large firms (500 or more employees), the benefits are nearly identical.

What about pensions? The fundamental issue is the difference between defined-benefit plans (prevalent in government jobs) and defined-contribution plans (e.g., a 401k, the standard in most of the private sector). The former promise a certain monthly pension check, the latter leave you at the mercy of Wall Street. Defined-benefit plans clearly cost employers more than defined-contribution plans. That explains why 85 percent of private-sector workers do not have them.

Gone are the days of life-long employment at a single firm with good pay, adequate benefits and a guaranteed pension. Welcome to the era of temporary, deskilled, part-time jobs with few benefits and a lousy pension. Workers witnessed the deliberate restructuring of America's private sector work force; government employees are next.

Taken from here
See also here

justice for kids?

Lawyers for a child in Pennsylvania who was 11 when he allegedly shot and killed his father's pregnant fiancee attempted today to persuade an appeals court not to try him as an adult under America's harsh system of juvenile justice. The US is the only country where juveniles are serving life imprisonment without parole under the so-called "life means life" policy. Only the US and Somalia have refused to ratify the UN Convention on the Rights of the Child, which rules out life sentences with no chance of release for crimes committed before the age of 18.

Unless the lawyers for Jordan Brown who is now aged 13, can convince the judges to change tack, he will be tried in adult court and if convicted will serve an automatic life sentence with no chance of parole. He would become the youngest child in US history to be sentenced to be incarcerated forever. When he was first presented to court Brown was made to wear shackles around his wrists and ankles.

The boy's father, Chris Brown says he has no idea what could await him."Try to explain to a 12-year-old what the rest of your life means. It's incomprehensible for him," he told ABC News last year.

Amnesty International said the move would be a violation of international law. "It is shocking that anyone this young could face life imprisonment without parole, let alone in a country which labels itself as a progressive force for human rights," said Susan Lee, head of the campaign's Americas operation.

No other country had juveniles serving life without parole. "That leads to only two conclusions: either kids in the US are far more violent than those in the rest of the world, or the US has developed uniquely harsh sentences." the Sentencing Project, a Washington-based campaign said.

2,400 prisoners face permanent imprisonment for homicides committed when they were children.

Tuesday, January 25, 2011

Who Pays the Price for the Recession?

Households face the most dramatic squeeze in living standards since the 1920s, Mervyn King, the Governor of the Bank of England warned. Families will see their disposable income eaten up as they “pay the inevitable price” for the financial crisis. With wages failing to keep pace with rising inflation, workers’ take- home pay will end the year worth the same as in 2005 — the most prolonged fall in living standards for more than 80 years.

Households face the most dramatic squeeze in living standards since the 1920s, Mervyn King, the Governor of the Bank of England warned. Families will see their disposable income eaten up as they “pay the inevitable price” for the financial crisis. With wages failing to keep pace with rising inflation, workers’ take- home pay will end the year worth the same as in 2005 — the most prolonged fall in living standards for more than 80 years.“In 2011, real wages are likely to be no higher than they were in 2005,” he said. “One has to go back to the 1920s to find a time when real wages fell over a period of six years...The squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies.”

Disposable household income has been hit by sharp increases in the cost of food, fuel and tax, coupled with restricted wage rises for most workers. Last year, take-home pay fell by about 12 per cent, official figures showed, and the trend was expected to continue in 2011.

The governor warned that the Bank “neither can, nor should try to, prevent the squeeze in living standards”.
“The erosion of living standards would have been even greater. The idea that the MPC
[Monetary Policy Committee] could have preserved living standards, by preventing the rise in inflation without also pushing down earnings growth further, is wishful thinking... The Bank of England cannot prevent the squeeze on real take-home pay that so many families are now beginning to realise is the legacy of the banking crisis and the need to rebalance our economy. I sympathise completely with savers and those who behaved prudently now find themselves among the biggest losers from this crisis...Households and small businesses with little housing equity may be unable to borrow at all or are able to borrow only in the unsecured market – where rates are much higher than before the crisis.”

The Sick Kids

Almost nine million children die each year before their fifth birthday. Pneumonia and diarrhoea kill more children under the age of five than any other illnesses, accounting for three times more deaths than malaria and HIV combined. Annually, 1.6 million children under five die of pneumonia and 1.3 million succumb to diarrhoeal diseases. Almost all of these deaths occur in developing countries.

"For every child who dies from pneumonia - the most common form of serious pneumococcal disease - in rich countries, 2,000 die from pneumonia in developing countries. This is not acceptable," says Helen Evans, the interim CEO of GAVI Alliance (formerly known as Global Alliance for Vaccines and Immunisation)

In wealthy countries, few children die from rotaviral diarrhoea because of ready access to health care services and over-the-counter treatment, and because well-nourished children are less susceptible in the first place. In developing countries, however, rotavirus can be lethal - especially if children have a weakened immune system because they are malnourished. The problem is further compounded if they have limited or no access to health care.

GAVI plans to immunise 240 million additional children in the next five years, saving four million lives. However, a funding crisis is looming. Out of over 45 countries which have been identified for the roll-out of pneumonia and diarrhoea vaccines, only 19 have had funding secured.

"Just when we are on the brink of a breakthrough against these two major child killers, the cash is running out. Without it children will continue to die on a scale, and from causes, that would be unimaginable in the developed world," warns Justin Forsyth, the chief executive of Save the Children.

Even at a discounted price, the vaccines are expensive to roll out for many countries. Imagine the scenario for countries like Burundi where the total per capita government health expenditure is just one US dollar, or in Sierra Leone where it stands at four US dollars. This makes the cost of pneumonia vaccine look phenomenal in context - even at its lowest subsidised price of 10 cents - and a costly purchase to countries already grappling with deep-rooted poverty.

In addition to the funding issue, countries are already restricted by their ability to distribute the vaccines; there is no point having new vaccines without the sufficient trained health workers to administer them, or the facilities to store them. According to WHO estimates there is a critical shortage of 3.5 million health workers in the poorest countries, without whom millions of children will face illness and early death. Doctors, midwives, nurses and community health workers form the vital backbone of the health services and without them, life-saving measures cannot be put in place. Without them, essential vaccines cannot be delivered.

There really is no reason why society could not provide for, care for and value all children, but capitalist society doesn’t. This is a society that allows innocent children to die in their thousands every day; If not by allowing them to slowly starve to death or die of easily cured diseases, then by literally blowing them apart.
The sincerity and sacrifice of charity workers is legendary, but from a socialist perspective charity is worse than useless. In 2003 the Socialist Standard reported that The United States effectively blocked agreement on a global pact to allow poor countries to buy cheap drugs to tackle epidemics such as Aids, malaria and tuberculosis and the big powers were accused of being driven by the interests of their pharmaceutical firms rather than by humanitarian considerations.
If, in protecting their profits, drug firms condemn millions of children to an early grave; well, that is just the logic of the market place. But while human beings are prepared to accept a system that values profit and business interests before children then we can expect to go on hearing of dying children all over the world until we become so numb to the awfulness that we begin to believe that it is a natural state of affairs and accept it with no more thought than the sunrise at the start of the day. The solution lies not in trying to transfer money from the rich to the poor but in abolishing the money system altogether.

all equal?

Monday, January 24, 2011

Food and Farming - the Future?

Foresight Report on Food and Farming Futures, a UK government-commissioned study into food security, the first study across a range of disciplines, the culmination of a two-year study, involving 400 experts from 35 countries, has called for urgent action to avert global hunger and says the current system is unsustainable and will fail to end hunger unless radically redesigned.

According to the government's chief scientific adviser, Professor Sir John Beddington, the study provides compelling evidence for governments to act now.

"We know in the next 20 years the world population will increase to something like 8.3 billion people. We know that urbanisation is going to be a driver and that something of the order of 65-70% of the world's population will be living in cities at that time. We know that the world is getting more prosperous and that the demand for basic commodities - food, water and energy - will be rising as that prosperity increases, increasing at the same time as the population. We have 20 years to arguably deliver something of the order of 40% more food; 30% more available fresh water and of the order of 50% more energy. We can't wait 20 years or 10 years indeed - this is really urgent."

The food production system will need to be radically changed, not just to produce more food but to produce it sustainably. The report says that "piecemeal" changes are not an option: "Nothing less is required than a redesign of the whole food system to bring sustainability to the fore."

As SOYMB so often points out, the experts and think-tanks can identify the problems and possess the knowledge and resources to provide the remedies. But given our current profit-orientated social system, there are going to be continual problems. But this does not mean that the potential is not there for us to solve them, once production is directly for need. For instance, when assessing 40 success stories from Africa the authors say the spread of existing best-practice could treble food production.

But they will utterly fail in their objective for food and agriculture to move up the political agenda and to persuade policy makers of the need of concerted action on many fronts. Despite the best intentions of everybody, capitalism can only do too little, too late. There exists within capitalism vested interests that stand in the way of achieving sustainability and to cause socialists to question the view that a change in priorities about food production is enough to ensure sustainability while capitalism continues to exist. The solution has to involve a fundamental shift in the priorities of society. But this is unlikely to happen without a change in the economic basis of society itself. Where there is short term profit to be made at the expense of long term sustainability we will continue to see problems. Capitalism is all about short term gain and realisation of immediate profit as the previous blog post indicated. The idea that capitalism can be humanised and changed by a series of reforms is almost as old as the capitalist system itself. The question of "how can we maximise profits?" currently gets priority. Food will only be produced if there is a market for it — i.e. people with the money to buy it. The needs of those without money do not count. The assumption that food will only be produced for markets pervades the debate about whether the world can be fed.

There are potential future environmental risks posed by fast developing, new technologies. These could arise from new means by which the genetic structures of the natural world might be altered (not to mention possible manipulation at the molecular level.) This further emphasises the need for democratic, social control of how the resources of our planet are managed. It is as the report says "Achieving a strong evidence base (of the safety or otherwise) in controversial areas is not enough. Genuine public debate needs to play a crucial role".

The solution is to change the economic system. In a socialist world, there will be no profit. Food production will be democratically decided. The human need for a livable eco-system will be considered as a normal part of all decision making. Socialism would allow us to develop and implement food production with two simple questions in mind: Which means will best meet our needs? Which methods are sustainable?

Casino Capitalism and Crops

Three years ago, people in the village of Gumbi in western Malawi went unexpectedly hungry. There had been no drought and there was plenty of food in the markets. There was no evidence that the local merchants were hoarding food. For no obvious reason the price of staple foods such as maize and rice nearly doubled in a few months. UN and food experts came up with their explanations that US farmers had taken millions of acres of land out of production to grow biofuels for vehicles, that oil and fertiliser prices had risen steeply, that the Chinese were shifting to meat-eating from a vegetarian diet, that climate-change linked droughts were affecting major crop-growing areas. However, the International Grain Council says global production of wheat actually increased at the time. Nor was it because demand grew as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand actually fell by 3 per cent.

The UN said that an extra 75 million people became malnourished because of the price rises.

Olivier de Schutter, UN rapporteur on the right to food, is in no doubt that speculators are behind the surging prices. "Prices of wheat, maize and rice have increased very significantly but this is not linked to low stock levels or harvests, but rather to traders reacting to information and speculating on the markets".
Professor Jayati Ghosh's research shows that speculation was "the main cause" of the rise as some crops such as millet ,cassava and poatoes are not traded on the futures markets and their price rose only a fraction of the others which were traded

The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are causing food prices to yo-yo and inflate. They are taking advantage of the deregulation of global commodity markets and are making billions from speculating on food and causing misery around the world. Following heavy lobbying by banks, hedge funds and free market politicians in the US and Britain, the regulations on commodity markets were steadily abolished. Contracts to buy and sell foods were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. In effect a new, unreal market in "food speculation" was born. Cocoa, fruit juices, sugar, staples, meat and coffee are all now global commodities, along with oil, gold and metals. In 2006 came the US sub-prime disaster and banks and traders stampeded to move billions of dollars in pension funds and equities into safe commodities, especially foods. In 2006, financial speculators like Goldmans pulled out of the collapsing US real estate market. They reckoned food prices would stay steady or rise while the rest of the economy tanked, so they switched their funds there. Suddenly, the world's frightened investors stampeded on to this ground. So while the supply and demand of food stayed pretty much the same, the supply and demand for derivatives based on food massively rose – which meant the all-rolled-into-one price shot up, and the starvation began. The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home. The speculative food market is truly vast. Hilda Ochoa-Brillembourg, president of the Strategic Investment Group estimates speculative demand for commodity futures has increased since 2008 by 40-80% in agricultural futures.

Farmers at one time engaged in a process where to protect themselves against risk, Farmer Giles agreed in January to sell his crop to a trader in August at a fixed price. If he has a great summer, he'll lose some cash, but if there's a lousy summer or the global price collapses, he'll do well from the deal. When this process was tightly regulated and only companies with a direct interest in the field could get involved, it worked . These days Farmer Giles still agrees to sell his crop in advance to a trader for £10,000. But now, that contract can be sold on to speculators, who treat the contract itself as an object of potential wealth. Goldman Sachs can buy it and sell it on for £20,000 to Deutsche Bank, who sell it on for £30,000 to Merrill Lynch – and on and on until it seems to bear almost no relationship to Farmer Giles's crop at all. Until deregulation, the price for food was set by the forces of supply and demand for food itself. This was , of course , already deeply imperfect since it left a billion people hungry. But after deregulation, it was no longer just a market in food. It became, at the same time, a market in food contracts based on theoretical future crops – and the speculators drove the price sky-high.

Mike Masters, fund manager at Masters Capital Management, says the markets are now heavily distorted by investment banks: "Let's say news comes about bad crops and rain somewhere. Normally the price would rise about $1 a bushel. But when you have a 70-80% speculative market it goes up $2-3 to account for the extra costs. It adds to the volatility. It will end badly as all Wall Street fads do. It's going to blow up."

Ann Berg, one of the world's most experienced futures traders, argues "There is no way of knowing exactly what is happening. We had the housing bubble and the credit default. The commodities market is another lucrative playing field where traders take a fee. It's a sensitive issue. Some countries buy direct from the markets. As a friend of mine says: 'What for a poor man is a crust, for a rich man is a securitised asset class.' "

Yet one thing we do know as Deborah Doane, director of the World Development Movement explains "People die from hunger while the banks make a killing from betting on food,"

The world's wealthiest speculators set up a casino where the chips are the stomachs of hundreds of millions of innocent people. They gamble on increasing starvation. It was only a matter of time before this all happens again. Food prices once more soar again to and beyond 2008 levels. Just how many people will it kill this time?

Taken from here and here

Sunday, January 23, 2011

A CIassic History Book

The Making of the English Working Class by E. P. Thompson, another book from the Better Read than Red list, was reviewed in the December 1968 Socialist Standard...

Thompson's excellent work, 800 pages long and first published in 1965, has now been brought out as a paperback. Applying the Marxist view that men make their own history but only out of the materials at hand, Thompson traces the formation of working class consciousness (by which he means the awareness among industrial workers that they were a separate class in society apart from the ruling landed and commercial oligarchy and manufacturing middle class) under the impact of tbe industrial revolution between 1780 and 1832. But this was not a passive process; working class consciousness was forged out of the struggles of London artisans, weavers, field labourers and Irish migrants against oligarchic government and the factory system.

The early working class is often seen as an ignorant rabble. Thompson exposes this myth and shows how the independent craftsmen who spearheaded the resistance to capitalism, in tbe Midlands and the North as well as in London, were in fact well-informed and literate with their own view of what society should be like - basically a simple and stable community with a secure place for all.

Wilkes and Liberty, Tom Paine and radicalism, the Corresponding Societies, the pernicious effects of Methodism, Peterloo, the early trade unions, the Cato Street Conspiracy, Robert Owen and Owenism are among the names and events in radical and working class history examined in detail.

Thompson's book deserves a place on every socialist's bookshelf alongside Thorold Rogers' Six Centuries of Work and Wages, the classic history of the workers in England which it (to a certain extent) replaces and certainly supplements.


Labor Power

"In our glorious fight for civil rights, we must guard against being fooled by false slogans, as 'right to work.' It provides no 'rights' and no 'works.' Its purpose is to destroy labor unions and the freedom of collective bargaining." — Martin Luther King Jr.

"What we’re trying to get to is to get Missouri on the map as a place where businesses want to be and where that they would like to locate. National-siting corporations, frankly, they’re taking a look at Missouri and saying, "Are you a right-to-work state or are you a forced-union state?...the other states that are right-to-work states, where they have a freedom to join or not join a union, they’re going to the top of the list. We’re losing out." Luann Ridgeway, a Republican state senator from Missouri

American bankers and big corporations are flush with cash. But in the political world, it is the good union jobs that are suddenly an evil thing. It is the labor movement, and not the banking sector, that is getting attacked. Good old union busting! "State officials from both parties are wrestling with ways to curb the salaries and pensions of government employees," The New York Times' Steven Greenhouse reports. Wisconsin's governor wants to bar state workers from forming unions altogether. Ohio's governor is launching the biggest assault on unions seeking to outlaw strikes by school teachers, prevent child care and home care workers from unionizing, and end a rule that mandates non-union construction workers on public contracts be paid union-scale wages.10 states plan to introduce legislation that would bar private sector unions from forcing workers they represent to pay dues or fees.

High unemployment, sluggish economic growth , state welfare cuts...who's to blame? The unions, of course, is the argument. The unions are the enemies of the working man. The working class must destroy unions for their own good ! Unions are the perfect scapegoat: an organization which a mass of disgruntled outsiders can be easily convinced to blame for their own problems (Immigrants are another good scapegoat!). Blaming unions for unemployment is a brilliant stroke of political acrobatics, because it appeals to the very people that would naturally be allies of organized labor: the working class. So the argument also goes, the municipalities and states that entered into pension and benefit agreements with their employees, and then, through poor financial planning combined with the overall collapse of the global economy due to Wall Street's insatiable appetite for handing out subprime loans, found themselves unable to honor those agreements. This, according to some, must mean that public sector unions themselves--not the elected officials who screwed up the states' finances--are evil. Therefore, private sector union workers who are natural allies of public sector unions should turn against them, until they are destroyed. This will benefit you, fellow worker. Uh-huh , we get it! Public sector workers should sacrifice, not those who caused the recession and who are now sitting pretty.It is a race to the bottom.

20, 30 years ago, pension funds, which were supposedly holding the money for the retirees that had already been paid into a system, were largely invested in safe securities. It was usually two-thirds in bonds, one-third in the stock market. But over the years, as governments reduced their pension contributions, they encouraged these funds more and more to invest in the stock market. So, precisely when the market crashes, all these pension funds, because now they are overwhelmingly exposed to the equities market, now suddenly find—reporting historic losses now in the pension funds that now have to be made up. So you’ve got the very politicians who pushed moving these pension funds into the equities market are now having to deal with the consequences, but they want the workers to pay for it. The pension funds got built up as a substitute for direct wages. So, it’s not like these pension funds were on top of what the workers were getting and just icing on the cake. It was what was the very basic condition of work, which is, when you’re finished working, you need to be able to live. Ther is the old saying, "You’re too old to work, but you’re too young to die." The labor movement historically has fought for those pensions, and those pensions have been given in trade-offs against current wages or as some described deferred pay . Had stock prices not plummeted and had the state governors continued paying into the pension fund rather than skipping payments for like 10 years there wouldn’t be this crisis in pensions. The state governments contributed to the problems because they just simply didn’t fund the pension obligations that they had, thinking that that’s somebody else’s problem—the old kick the can down the road. And now all of a sudden it’s the workers’ fault.

The apologists of capitalism say there is a new class war— between supposedly well paid public sector workers on one side and not-so-well-paid private sector workers on the other side.Yet the real class war are those on Wall Street making a million, two million a year, trying to squeeze private sector workers, trying to squeeze public sector workers, by divide and rule.

“Once voters know who’s behind these fights, and that these are the same people who want to dismantle Social Security, and want to dismantle unemployment insurance, and basically want to repeal minimum wage I think they’re going to have a little better understanding of where these things are coming from,” said Naomi Walker, the director of state government relations at the AFL-CIO.

The Secretary-Treasurer of the giant public workers union AFSCME, Lee Saunders explained “The ultra-conservatives are trying to make the public sector the enemy because the private sector is being hit so hard,” he said. A main focus, he said, would be pushing back against “misinformation” on the allegedly lavish pay of public workers. “A lot of that information is dead-ass wrong,” he said.

Working people can organize and form unions. Unions do more than raise wages. They improve working conditions and safety. They provide protection against abuse, intimidation and wrongful dismissal. Non-union employers have to compete, partly to keep out unions, so the existence of unions helps everyone. Unions also have political power, they spend money and mobilize their members to vote. Union members continued to earn more than non-unionized full-time wage and salary workers, with average weekly earnings of $917, compared with $717 among non-union workers. If you have public sector workers stripped of their capacity to have unions and to protect themselves, their living standards will decline but also the public services that people get will decline.

In 2010, the rate of union membership among wage and salary workers was just 11.9 percent, down from 12.3 percent a year earlier and down from more than 20 percent in 1983.The number of union members fell by 612,000.15.7 percent of workers aged 55 to 64 are in unions and just 4.3 percent of workers aged 16 to 24 as members.

In the 1940s a third of private sector employees were unionized. Now it's down to just 6.9 percent. Unions only remain strong in the public sector, where membership is 36.2 percent. If you read the papers or watch the news, you will see an anti-public service union story almost everyday. These are the people who teach your kids, pick up the trash, clean the sewers, drive the buses and trains, they're the police and fireman. The stories will tell you their pension fund liabilities will bankrupt the states; that it's unionized teachers who have ruined our schools. Charter schools -" without unions -" are the new favorite charity for billionaires. Businesses have become very good at beating unions. And they're getting better at it. According to Business Week,"over the past two decades, Corporate America has perfected its ability to fend off labor groups." Demonising labour has a long and dirty history in America. Now, in times of trouble, American politicians have fallen back on the oldest stereotype they know: the evil union.

Mary Kay Henry, president of the Service Employees International Union explains "The decline in the number of workers who have a voice on the job makes it more difficult to reverse the economic trends that continue to put workers and our communities in crisis."

Workers do not possess any effective countervailing power against Big Business to fight them. Unions used to provide that power. Competitive labor markets have steadily displaced top-down collective bargaining. Competitive for whom? Employers have been steadily gaining at the expense of their employees and the job market for decades. Your average middle income worker has very little real bargaining power anymore, and this isn't due to chance or to fundamental changes in the economy. Rather, it's due to a long series of deliberate policy choices that been made over the past 40 years. The corporations and the rich know perfectly well what the biggest threat to their wealth is, and this is why the steady erosion of labor rights has been, by far, their single biggest obsession since the end of World War II. Not taxes but the unions. And right now it is all about weakening the one sector of union movement that’s still relatively quite strong , and that’s the public sector unions.

crime and poverty and alienation

In 2008-09 , aboriginal convicts made up a whopping 71% of all admissions to provincial institutions. From 1998 to 2008, the aboriginal population in federal prisons increased by nearly 20%. Why is there such an overrepresentation of aboriginal peoples in the jails?

Eric Robinson, Manitoba's minister of Aboriginal and Northern Affairs, says "It's hard to overcome generations of oppression towards aboriginal people. As a result, many aboriginal people fall between the cracks and then wind up doing time." The residential school era took away the students' cultural identity, which has been passed on through generations, he said. "We have not been able as aboriginal people to generate enough to end that cycle that appears to be there. What has happened has been ... this loss of identity of aboriginal people and that's what has contributed to the social discourse of aboriginal people for the most part in the province of Manitoba."

Jennifer Wood, residential school compensation co-ordinator with the Association of Manitoba Chiefs, explained "...that the direct link to many of our problems is ... these are children of residential school survivors. When you come out, you don't have the parenting skills, you don't have the emotional comfort that a child should have, you don't have the ability to teach them certain things." Many families live in poverty on reserves, and when people make the move to the city, that poverty continues, she said. "Once you come in to the city, you are a target because you are a vulnerable person," she said. "You don't have the street smarts. Vulnerability is a breeding ground for people wanting to recruit young people into the drug scene."

Poverty is often linked to criminal activity, and Wayne Helgason, executive director of the Social Planning Council of Winnipeg says it is the "single most determining factor" for whether or not one chooses a life of crime. 68% of children under the age of six who are aboriginal live in poverty. When educational and other opportunities are missed, there is a general disassociation with society and its norms and values, he said. "It gives you permission in your own way, to take what you can, while you can for immediate basic needs," he said. "So it's a predictable situation. If we have poverty and exclusion, we will have increasing rates of crime."

Saturday, January 22, 2011

Slavery by Another Name

A prison strike has ended in seven Georgia prisons, but organizing is still ongoing.
All 54,000 Georgia inmates work for “Prison Industries” – not a private corporation but the wholly owned subsidiary of the Department of Corrections. In effect, PI employs more workers than Delta Airlines, Coca Cola, Home Depot or any of the largest corporate employers in the state. Prison inmates are the largest single workforce in Georgia. They are paid no wages - the 13th Amendment permits “involuntary servitude” of those convicted of crimes.

This action by the inmates was a strike, not a riot or a protest. It was an action by workers to with-hold their labour by refusing to leave their cells. The risks they have taken are enormous. Refusal to work gets you a “Disciplinary Report,” which can affect parole and your “privileges” in prison.State officials claimed they knew about the strike action well in advance and said they locked the institutions down as a preemptive measure. They declared they’d confiscated more than a hundred cell phones, mostly in public places, and identified dozens of inmates whom they believed were leaders of the strike. They admitted confining these inmates to isolation and in some cases transferring them to other institutions. In retaliation for organizing the Georgia prison strike, Miguel Jackson was pepper sprayed, handcuffed and beaten with hammers, resulting in a fractured nose and 50 stitches to his face, and guards tried to throw him over the railing from the second floor, his wife said.

The demands they presented were for wages and working conditions , which in their case of course includes living conditions. Since the work stoppage involved thousands of prisoners, it is probably the largest strike or labor action in Georgia in decades. Moreover, the inmates have firmly taken a stand of interracial solidarity, particularly crucial in Georgia where more than one third of the inmates are white.

At a forum on the Abu Ghraib abuses held in Atlanta, someone who then worked for the Southern Conference on Human Rights remarked that the methods of Abu Ghraib had their origins in practices common in Southern prisons, the “stress positions” very similar to those in the photos from Iraq.

The inmate demands recall those of Black Reconstruction: education, wages, decent food and medical care, the right to be in touch with their families, and a chance at a decent life once they are released by learning employable skills. In this struggle may lie “the kernel and meaning of the labor movement,” to use the phrase W.E.B. DuBois used to characterize Black Reconstruction
“The South, after the war, presented the greatest opportunity for a real national labor movement which the nation ever saw or is likely to see for many decades. Yet the labor movement, with but few exceptions, never realized the situation. It never had the intelligence or knowledge, as a whole, to see in black slavery and Reconstruction, the kernel and meaning of the labor movement in the United States” (W.E.B. DuBois “Black Reconstruction” Ch. IX “The Price of Disaster”).

Theodore William Allen, author of “The Invention of the White Race,” points out that where racial inequality has been most extreme, in the South, whites are the worst off. The greater the gap between the white and black worker, the less able white workers are to defend themselves as workers. The role racial privilege plays in the social control of white working people, as well as black, suggests why incarceration rates of whites are highest in the Deep South. Working class interracial solidarity anywhere anytime is of historic significance, and according to reports, it is being realized in this movement of inmates. The prison population is of course quintessentially working class, and these workers have launched a strike for wages and improvement of “working conditions.” They have established interracial solidarity. Thus the strike deserves solidarity from every corner.

The U.S. has 4 1/2 percent of the world’s population and nearly 25 percent of its prisoners. In 2007 blacks accounted for 900,000 of the 2.2 million people incarcerated in state prisons, six times the incarceration rate of whites. One in six Black men is in the system at any time.Georgia leads the nation with an astounding one in 13 of its adult citizens in prisons and jails or under court and correctional supervision. Advocating ever-longer sentences has become a standard campaign tactic for ambitious politicians and prisons have become growth industries with their own lobbyists.

" Long tired of being forced to work without compensation and under the threat of disciplinary action – bad conduct reports to the Parole Board, for example – Georgia prisoners decided it was time to sit down, rest, recuperate and reconcile themselves with their rights, human and civil...Georgia state prisoners stuck together and learned what their togetherness could do. They learned that they could get more accomplished being unified than they ever could being separated. For this day, Black, White, Brown, Red and Yellow came together. This day saw the coming together of Muslim and Christian, Protestant and Catholic, Crip and Blood, Gangster Disciple and Vice Lord, Nationalist and Socialist. All came together. All were together. The only antagonistic forces were the Oppressors and the Oppressed. So, in Georgia, we’ve finally learned – or rather, been reminded – that with just a little unity and a lot of determination, we can change some of the longstanding exploitative practices of the state of Georgia’s Department of Corrections." Eugene Thomas, a prisoner in Georgia

Another bubble set to burst?

According to Hurun’s most recent data, and in Chinese yuan terms, the country had 875,000 multi-millionaires and 55,000 billionaires last year – 6.1 per cent more millionaires and 7.8 per cent more billionaires than in 2009. More than 50 per cent of the mainland’s wealthiest, who each have assets of more than 10 million yuan (€1.15 million), spend between one million yuan (€115,000) and three million yuan (€230,000) every year, and own more than three cars. These cars – the white BMW 7-Series, the black Audi A6 models with extended wheelbases, the Porsche Cayenne SUVs – throng China’s fabulous new network of motorways. Rupert Hoogewerf, publisher of the Hurun Report, which counts China’s wealthy and analyses what they do, lists off the brands favoured by the country’s rich: Patek Philippe watches, Mercedes E-Class cars, Gulfstream jets, Armani suits, Azimut yachts and Louis XIII brandy. This is the luxurious reality behind the 10.3 per cent increase in China’s gross domestic product (GDP) last year. Half of the richest people on the Chinese mainland are spending at least a million yuan (US$115,000) a year. Rupert Hoogewerf, head of the Hurun research group, says this shows that luxury brands have a very special place here. “Lots of people like to receive luxury brands to improve their status. It’s a noticeable trend,” Hoogewerf says. “The time for China to learn from Europe is over. People here are becoming better educated. They are getting to know luxury brands that are not even familiar to some Europeans.”

Ni Xiao owns a chain of shops and spends a lot of his money on the stock market. “My monthly outgoings are about 100,000 yuan [€11,500], which I spend on eating, entertainment and my girlfriends. I travel a lot to the US. I probably spend about a third of my time there. My annual income is about four million yuan [€460,000], and I own a few apartments in Beijing and Shanghai.”
Zhang Hongli, marketing manager of a publishing company, owns two apartments in Beijing and one in her home town, in Hubei province. “I never spend more than 100,000 yuan [€11,500] a year on luxury items, which is about a third of my income,” she says.
Zhang Yue, an actor , spends between 30,000 yuan [€3,500] and 50,000 yuan [€5,800] on shopping each month. “Most of this is on luxury brands, because as an actress I need it. Together my husband and I spend about a million yuan [€115,000] a year, and we change our cars frequently. My annual income is more than 500,000 yuan [€58,000], and we own five or six apartments here in Beijing."
Mr Yang, a marketing manager in a foreign company, “My monthly expense is around 30,000 yuan [€3,500], and my annual income is around 600,000 yuan [€69,000]. I seldom buy luxury things for myself, but, as all girls love Louis Vuitton bags or Chanel, sometimes I buy this for my girlfriend. My expense on luxury things is about 100,000 yuan [€11,500] to 150,000 yuan [€17,300] per year.”

What China’s wealthy people like to buy most of all is property. Their main investment choice is real estate. About €310 billion was spent on land transactions in 2010, a 70 per cent rise on the previous year. The biggest jump in property prices was in Beijing, where they rose 42 per cent, with the average price 20,328 yuan (€2,345) per square metre. Shanghai’s price hike ranked second, with 40 per cent, although it is the most expensive market, with prices reaching 22,261 yuan (€2,561) per square metre, and €24 billion worth of residential properties were traded, despite government efforts to cool the market. Prices in the southern boom town of Shenzhen rose 33 per cent last year, and they were up 23 per cent in Guangzhou.

With inflation running at about 5 per cent, there is no point keeping your money in the bank because the deposit rate is only about 2.5 per cent. So people look for other investment vehicles. With the stock market looking pricey, the classic investment is property. Much of the rise of the market is attributable to China’s incredible process of urbanisation. China has seen the number of city dwellers rise from 18 per cent of the population in 1978 to 46 per cent in 2008, a rise of 28 per cent in three decades. About 300 million Chinese now living in rural areas – the equivalent of the population of the United States – will move into cities in the next 20 years, and by 2025 at least 220 Chinese cities will likely have more than a million inhabitants.

"...there is a conflict between supply and demand. In the past four or five years the number of new apartment buildings in Beijing is falling, probably by about 60 per cent, while demand has doubled or trebled. So for sure the price will go up. People’s incomes are rising; the numbers of people moving to the city is rising. People about 30 years of age need a home, want to start a family, but their parents are still young, and they don’t want to share with them. So what do you do? And with the move from the rural areas and villages to the cities in recent years, more and more people are here in the big city. With such huge demand in a city such as Beijing, where land is limited, demand is sure to rise" explains Jiao, who has managed a property agency for the past 14 years.

Mao Yushi is one of China’s best-known economists and a director of the Tian Ze Economic Research Centre. “We have a lot of problems now, for example the real-estate bubble,” he wrote on his blog. “Much of the increase in GDP is actually because of this bubble. When one building sells at an incredibly expensive price, beyond the normal market price, it is a distortion, which inflates the bubble in the real-estate market. This bubble relates for sure to a series of macroeconomic policies, including the savings made from having the renminbi [or yuan] currency at a low exchange for a long time.”

Brian Lucey, associate professor of finance at Trinity College Dublin, says “There is some research out there looking at housing and asset prices in China, and there are indications that the property market is somewhat overvalued in China. The question is whether that could be a major problem, and that I don’t know. It could be that it doesn’t go to the heart of the economy and could be absorbed by the broader economy...They are coming up against the limits of freedom to manoeuvre in controlling the political economy.”

extracted from here

1 Hyde Park

This week saw the opening of the world's most expensive block of flats in Knightsbridge, overlooking Hyde Park. Some of the richest people in the world gathered next door in the Mandarin Oriental Hotel for a lavish luncheon prepared by Heston Blumenthal to mark the completion of the four glass and steel towers now known as One Hyde Park, in which four penthouses have already been sold for up to £135m each and the price of floor space exceeds all records at £6,000 a square foot.

Their designer, Lord Rogers, calls it "a 21st-century monument". That is what it is - a monument to the ever-widening gap between rich and poor and to the unique ability of the very wealthy to ride out the recession unscathed.

Friday, January 21, 2011

Marx and the Anarchists

Karl Marx and the Anarchists by Paul Thomas, another book from the Better Read than Red list, was reviewed in the July 1980 Socialist Standard....

This excellent book is a running commentery on Marx's fierce battles with crackpots he regarded as disasters to the socialist movement: the anarchists Max Stirner, P. J. Proudhon and Michael Bakunin. One of its principal merits is that it debunks, with the support of voluminous and correctly interpreted quotations, the idea that Marx was a dogmatic old bully, hopelessly impatient and irritable with anyone who dared to dissent from his views.

Stirner's sole claim to fame is his book, The Ego and his Own, which was purported to be a rebellious challenge to all the established institutions but is actually a pathetic rehash of Hegelian idealism. The greater part of The German Ideology, Marx and Engels' "settlement" with German philosophy, consists of the reply to "Saint Max", as they called him. Proudhon wrote so much, with so many contradictions, that it is impossible to list them all. Suffice it to say that one keen observer (Albert Hirschmann) has pointed out that Milton Friedman's arguments today were originally put forward by Proudhon in the 1840s. Bakunin was opposed to writing, on the grounds that "action", not books, was necessary (although he did write a partly autobiographical work, and the short God and the State).

All three anarchists did immense harm to the socialist cause, Stirner, with his ridiculous "personal rebellions", opposed any form of organisation or educational work, as did Bakunin and Proudhon. The latter spread more confusion than anybody in France, with his opposition to strikes, trade unions and political parties; while Bakunin succeeded in having the First International dissolved by Marx's supporters rather than allow it to be tumed into a terrorist conspiracy practising robberies and assassinations. Each one of them extolled the virtues of the criminal lumpen-proletariat who, they claimed, were the real "rebels" because they had "nothing to lose"; Bakunin went so far as to advocate arson, brigandage and burglaries.

No supporter of the Socialist Party of Great Britain who reads the book can fail to be struck by the correspondence of Marx's replies to these anarchists with our Declaration of Principles. (For exarnple, Marx's reference to the "parliamentary idiocy" of the German workers' movement in 1879: "The point was not to pursue the franchise as though it were a Workers' Holy Grail, but to transforrn it from the institute of fraud ... into an instrument of emancipation", p, 345.) Thomas also shows that, on the questions of democracy and working class understanding Marx shares our, and not Lenin's view: "We cannot, therefore, co-operate with people who openly state that the workers are too uneducated to emancipate themselves" (1879).

Marx held that, on every count, political action was the "first duty" of the working class. This book makes clear his views on dictatorship and democracy; the transformation of the State apparatus; the necessity of working class knowledge; the indispensability of trade unions; and the transformation of working class mentality. Above all, however, it documents his insistence on the need for a working dass political party active in the struggle for socialism. It remains to add that, whether Marx considered it imperative or not, it happens to be right.


jobless and powerless

According to the American Bureau of Labor Statistics (BLS) latest report, there were 1.1 million private sector jobs gained in the last year, and of those jobs, 650,000 (or about 60 percent) could be categorized temporary, leisure and hospitality, and retail sales. The BLS cites the average rate of packers and packagers as $8.62 per hour. Other than keeping families from starving or living on the street, how are $8.62/hour jobs—not for teenagers still living with their parents, but for heads of households. Traditionally well paid male dominated occupations in construction and manufacturing were hit especially hard in the recession, and those males are now, as part of the bigger casualisation trend, taking lower paid and part time work, of the kind traditionally associated with women. As the influence of unions has declined, the standard of living has declined right along with it. And why wouldn’t it? With unions weaker and nothing to resist the downward pressure on wages, corporations will continue grinding workers down until, in theory, they reach the federal minimum of $7.25/hour.

From the New York Times we read that in the USA the GDP — the total value of all goods and services — has recovered from the recession better than in Britain, Germany, Japan or Russia. In Canada, Japan and most of Europe, corporate profits have still not recovered to pre-crisis levels. In the United States, profits have more than recovered, rising 12 percent since late 2007.
For corporate America, the Recession is over but for the American work force, it’s not. A greatly shrunken group of American workers, working harder and more efficiently, is producing the goods and services.The American jobless rate is higher than Britain or Russia and much higher than in Germany or Japan .
Why the lack of job growth despite the recovery? It's down to the balance of power between employers and employees. American employers operate with few restraints. Unions have withered, at least in the private sector, and courts have grown friendlier to business. Many companies can now come much closer to setting the terms of their relationship with employees, letting them go when they become a drag on profits and relying on remaining workers or temporary ones when business picks up. Unions are clearly playing on an uneven field. Companies pay minimal penalties for illegally trying to bar unions and have become expert at doing so, legally and otherwise. For all their shortcomings, unions remain many workers’ best hope for some bargaining power.

In the UK, the new private sector jobs that are being generated are also predominantly part time and temporary rather than full-time and permanent, with all that implies as well for lack of paid holidays, final salary pensions and job security.

In Scotland, the number who have been out of work for more than two years has doubled in the past 12 months, according to official figures. Long-term unemployment rose for every age group. Susan McPhee, director of external affairs at Citizens Advice Scotland, said: “The numbers of people out of work in Scotland now are so high that every family will know someone who is looking to find work and can’t get it. These figures also mask the reality that many of those who are in work are stuck in insecure, part-time or low-paying jobs that really don’t meet their needs.”

While in Ireland, the Economic and Social Research Institute project that a further 25,000 jobs will be lost – most of these in the construction, financial and public sector and that 50,000 people can be expected to emigrate (which compares to the 44,000 who emigrated in 1989, the peak year for emigration during the 80s).

Thursday, January 20, 2011

there are victims, and then there are victims

The media has been providing plenty of coverage of the disastrous floods in Queensland, Australia, lots of news footage has been provide, ample commentary of the human cost to those flood victims.

Yet the floods in Sri Lanka? Very little reporting. The floods were a once in a century event, according to the UN Global Disaster Alert and Co-ordination System. Local newspapers reported that, during the period from 1 December to 12 January, more rain fell in Batticaloa district than it normally receives in a year.

The damage to agricultural land could leave up to 1 million people, including 400,000 children, without enough food, Save the Children said. 21% of the country's rice crop had been destroyed. 350,000 displaced people driven into temporary refugee camps are now returning home only to find that their homes, schools, crops and livelihoods have been wiped out by the rains.

"The average ten-year-old in eastern Sri Lanka has lived through conflict, the tsunami and now risks facing a food crisis in the coming weeks caused by these floods," Gareth Owen, Save the Children's emergencies director, said. "It is absolutely essential that the world does not wait until these children are starving to act. Many families in affected areas are facing a nightmare scenario in which both their food source and their livelihoods have been washed away by the rains. They need help to survive until the next harvest. It may not have been possible to prevent the floods, but we can avoid a food crisis if help is given to families now."

A letter to ed

"Dear Mr Miliband,

The purpose of this letter is not your party's policies but about the role of political leadership in general. There is a saying that goes: “If you know what you want and know how to get it, then you don’t need leaders.” I ask you whether you put yourself in the category of being in charge of such followers? Perhaps they know what they want, but not how to get it? If someone joins a political party then presumably they agree with its principles and aims beforehand. Or is your role solely as a salesman for your party's policies?

Secondly, what is your “official” position in the Labour Party? A political party has various officials and functionaries such as general secretary, chairman, treasurer etc. As far as I am aware the title “leader” does not bestow upon you any specific function, except the “on-the-nod” acceptance of your decisions by members of your organisation. In other words, what are your terms of reference? My question is equally addressed to all those political parties which
install leaders.

Yours sincerely,

High Rise Poverty in Toronto

In 1981, a quarter of the families who lived in North York highrises were poor. By 2006, it was 40 per cent. During that period, median incomes for families renting North York highrises fell almost $9,000 a year to around $34,500.

Those highrises - privately-owned buildings of five storeys or more - were also more crowded: 16 per cent of families in 2006 rooms reported more than one person living in each apartment room. In 1981, that was true of just eight per cent, the report says, citing census data. Back then, North York had just seven census neighbourhoods where more than a quarter of families lived below the poverty line. By 2006, there were 41.

More Jane-Finch tenants (48 per cent) said they had cockroaches in their building than said they had no pests at all (43 per cent), 17 per cent said their apartment or another in the building had been broken into during the previous 12 months, and 46.5 per cent said elevators in their buildings broke down "frequently."

Less than four per cent of Canadian households now control more than 65 per cent of our net worth (excluding real estate.)
Canada’s CEOs 2009 rewards averaged $6.6 million. In sharp and growing contrast, workers typically pocketed about $43,000 — more than 150 times less.

From Here

Wednesday, January 19, 2011

"divided and impoverished"

Unemployment has soared by 49,000 to 2.5 million with a record number of young people out of work. One in five 16 to 24-year-olds are jobless - 951,000 - the highest figure since records began in 1992. Employment levels have fallen, redundancies have increased and the number of people classed as economically inactive has reached 9.3 million.

Dave Prentis, general secretary of Unison, said "It's misery for families, hit with a toxic cocktail of high inflation which is pricing them out of everyday living, and dwindling job opportunities. Meanwhile it's easy street for the bankers who caused this crisis, and are still making off with billions in bonuses."

Workers are worried about money and their jobs and are living under "tremendous pressure", according to a new study today.

Unite said a survey of 50,000 of its members showed that Britain is becoming "divided and impoverished" and increasingly forced into "insecure" working. As well as job losses, workers are also being hit by pay cuts and seeing an increasing number of agency staff being employed.

"With bankers lining up to line their pockets while workers worry about every penny, we are not all in this together." Unite's leader Len McCluskey said

Wall Street global banking giant Goldman Sachs revealed today that staff earned a total of 15.4 billion US dollars (£9.6 billion) in pay and bonuses last year - equivalent to around £270,000 per employee. The share of revenues paid out in salary and benefits for 2010 was up from 35.8% at 39.3%. The firm posted a 38% drop in net earnings to 8.35 billion US dollars (£5.23 billion) for the year to December 31. This followed a 13% decline in revenues to 39.16 billion US dollars (£24.51 billion).

The power to change the world

It is always inspiring to see people power in action, as in Tunisia, where it forced the local dictator to flee after twenty-three years in power. It shows that people are not always passive victims but have the potential to topple capitalism not just dictators.

In all countries society is divided into two classes: those who own and control productive resources and want them operated to bring them a financial profit and the rest of the population who depend on them to live.

All governments have to give priority to profits and profit-making as this is what drives the capitalist economy. When profits are under pressure, as at present, they have to impose an added austerity on the population which inevitably brings them into conflict with them.

One of the key jobs of any governments is to keep the population quiet, basically to avoid them rioting. In a developing capitalist country such as Tunisia this can’t be done without regular recourse to brute force. Which is why most of the governments of such countries are more or less authoritarian, compared, that is, with those of the more developed countries where lies and trickery generally do the job.

This situation is tacitly accepted by Western governments as they want social peace, however obtained, in the countries where they have profit-seeking investments. They need governments there that keep the people down. As long as a government does this they can expect support, as Ben Ali got from France for years. But woe betide a dictator unable to stop the population getting out of hand. He may initially continue to be supported but eventually an exit strategy will be prepared for him – exile in a country where he and his family can live off the loot all far-seeing dictators statch away.

When a dictatorship is toppled people feel empowered by what they have done but that is not enough. One demonstrator in Tunisia, asked what he expected to happen next, replied simply “I don’t care. I’m just glad to see the back of him”. But “what next?” is the key question as kicking out a dictator does not change the economic realities of capitalism – nor the repressive role of governments.

We take no pleasure in pointing out that any new government in Tunisia, even though less corrupt (or not corrupt at all) and enjoying more legitimacy, will still have to keep the population down in the interests of capitalism.

The only way the population in Tunisia, and elsewhere, can avoid having to protest at an artificial scarcity being imposed on them in a world of potential plenty is to join with workers in the rest of the world to get rid of capitalism, its class rule and its production for profit. This means making the natural and industrial resources of the Earth the common heritage of humanity. It means establishing a world without borders where the resources which already exist can be used to provide plenty for all

suffer little children

More babies are at risk of being born into poverty , a charity says. A report by Family Action warns that new parents and babies will bear the brunt of cuts to benefits and tax credit support to families. The charity, which works with 45,000 vulnerable families a year, estimates that at least a million of the poorest families will lose one or more of these benefits. The charity is warning that affected families may use doorstep lenders to help plug the holes in their finances.

Analysis for the charity in its report Born Broke suggests the poorest families stand to lose £1,735 in pregnancy support and help for new babies. Middle income families will lose thousands of pounds more when losses from changes to the tax credit income disregard and childcare costs are taken into account.

Family Action chief executive Helen Dent said: "The loss of these grants could be dire for many families and may force them into the arms of doorstep lenders. We know from speaking to parents here that this is an option they'd consider. That or their babies will simply have to go without.These forgotten families and their children will be counting the cost of austerity.Many parents will be hit hard by measures which will disadvantage new babies at birth."

Ms Dent added that vulnerable mothers would struggle to maintain a healthy diet during pregnancy and that low income families would find it tough to meet the needs of their newborn children.