Socialist Standard No. 1365 May 2018

• Editorial: Here We Go Again?
• Pathfinders: Killer Apps
• Ethnicity: Sticky Wicket or Slippery Slope?
• NEW PAMPHLET: The Road to Socialism
• Cooking the Books: Pleasing Business Leaders
• Shadow Boxing With the Ghost of Lenin
• Material World: Welcome if You're Rich
• The World Military Situation
• In Response to the Syrian Air Attacks
• Zambia: Corruption and the Origin of a Local Private Capitalist Class
• Dialectic of Power: Leaders and the Led
• Saving Capitalism
• Cooking the Books: Yes, Read Marx
• Proper Gander: A Tale Of Two Cities
• Book Review: 'My Life, Our Times'
• Book Review: 'The Experiment - Georgia’s Forgotten Revolution 1918-1921'
• Book Review: 'Hinterland - America’s New Landscape of Class and Conflict'
• 50 Years Ago: Martin Luther King
• Obituary: Pat Kilgallon
• What is Freedom?
• Rear View
• Cartoon: Free Lunch

Edinburgh's Slavers

People in Edinburgh were at one time twice as likely to own a slave as someone in Glasgow or London.

 By the late 1700s, a third of Jamaican plantations were owned by Scots, some of whom liked to dress their slaves in their clan tartan.

 In 1790, the combined worth of exports and imports between the West Indies and Scotland totalled at least £50 million in today’s currency. 

Among those to receive a share of the £20m in compensation paid out in the wake of the emancipation of slaves were Peter McClagan of Great King Street, John Blackburn of Queen Street, John Gordon of St Andrew Square and James Auchinleck Cheyne of South St Andrew Street.

One of Edinburgh’s most prominent landmarks, the Melville Monument in St Andrew Square, was erected in honour of Henry Dundas, the 1st Viscount Melville, who is widely blamed for delaying the abolition of slavery in the 18th century.

Another immigration myth debunked

People tend to believe anything they are told, except the truth.

The Marshall Project, in conjunction with the New York Times Upshot, analyzed the data from a 2016 study of the relationship between crime rates and immigration in 200 U.S. cities and found that “a large majority of the areas have many more immigrants today than they did in 1980 and fewer violent crimes.”

“In 136 metro areas, almost 70 percent of those studied, the immigrant population increased between 1980 and 2016 while crime stayed stable or fell,” the Marshall Project write-up said. “The number of areas where crime and immigration both increased was much lower—54 areas, slightly more than a quarter of the total. The 10 places with the largest increases in immigrants all had lower levels of crime in 2016 than in 1980.”

Trump engaged in a public war of words last month with Oakland Mayor Libby Schaaf after she warned her constituents of impending ICE raids. He called Schaaf a “disgrace” and claimed “85 percent” of the “close to 1,000 people ready to be gotten” were criminals. Data from the study, however, show Oakland was among the cities in which immigration has increased, and crime decreased, since 1980.

https://www.alternet.org/news-amp-politics/study-no-relation-immigration-crime

The Human Family

The average UK adult has more than 16,895 eighth cousins living relatives, with most completely unknown to them, a study suggests.

The company said: “Based on this, if you went to see a football match at the 90,000-capacity Wembley Stadium, you’d potentially be sat in a crowd containing two long-lost cousins.”

 People in Scotland have the most living connections, typically with an average of 21,000 cousins, followed by residents of the North West, with more than 20,000.

Fighting the Gig Employers

The delivery company Hermes which delivers packages for retailers such as Next, Asos, John Lewis, Topshop and River Island, faces a legal battle with a group of its own drivers today, in the latest case promising to have major ramifications on labour rights in the growing gig economy.

The drivers claim they are being denied basic workers’ rights by being forced to declare as self-employed, meaning they are not entitled to holiday pay or to be paid the legal minimum hourly rate under the national living wage.

Tim Roache, the general secretary of the GMB union, which has been involved in bringing the Hermes claim, said: “GMB’s courier members do a tough job – working long hours with unrealistic targets. They make a fortune for companies like Hermes, the least they should be able to expect in return is the minimum wage and their hard-fought rights at work.Companies like Hermes and Uber hide behind terms like ‘flexibility’ to wriggle out of treating the people who make them their money with the respect they deserve.  Guaranteed hours, holiday pay, sick pay, pension contributions are not privileges companies can dish out when they fancy. They are the legal right of all UK workers and that’s what we’re asking the courts to rule on.”

The Price of Renting

A year's rent takes up every penny earned by full-time workers until the first week of May, analysis by BBC News reveals.

Someone earning £22,900 after tax in England would have to work 86 days just to cover rent, five more than in 2011.

In Scotland and Wales, the number of working days needed to cover their rent fell to 79 and 71 days respectively.

Rising property prices have made it harder for millions of people to buy a home and the number of households renting privately has reached a 30-year high, according to the English Housing Survey.

Analysing the median annual rent for two-bedroom properties and the median income of full-time workers in Great Britain the BBC England Data Unit found:

• If the typical full-time worker in England, living alone, spent everything they earned after tax and national insurance on their rent, they would have made enough money by 3 May.
• Similar workers in Scotland would have earned enough money to pay their rent by 24 April and in Wales, workers would be rent-free by 12 April.
• Nearly half of local authority areas in Great Britain have seen annual rents for two-bed properties increase faster than the average take-home pay.
• In London, the cost of rent eats up 15 more days' pay than it did in 2011. In London, even renting a room in a shared property takes a full-time worker until 27 March. A middle-earning worker makes £27,150 in the capital, after tax and National Insurance. Renting a room at an average of £7,200 they would have to work 67 days just to cover the rent. That is nearly three weeks longer than in 2011.

The workers squeezed the most by rents rising faster than pay are in the south of England. A private tenant in London would have to work 165 days to earn enough to cover the rent on a two-bed property, compared to 66 days for a worker in the North East.

Almost one in 10 councillors in London either work for property businesses or have received gifts or hospitality from them, a Guardian investigation into the depth of links between town halls and the property industry has revealed. Nearly 100 councillors in the capital work for property companies or lobbying and communications consultancies involved in planning, according to declarations of interest made by elected representatives. Some of them also sit on planning committees making decisions over major developments, including volumes of affordable housing.

Sir Alistair Graham, the former chairman of the committee on standards in public life, claimed the extent of the overlap between the property industry and councillors “undermines trust” and potentially “the important national objective of increasing affordable housing”.

“These networks have the capacity to help property companies default on their responsibility to build affordable housing,” he said. “We should place restrictions on council members who are also employed by property companies and make it a legal requirement that they must stand down when decisions on planning issues are discussed which they may have an issue in.”

Some of the councils with the highest levels of hospitality or declared interests in property companies are producing levels of affordable housing that fall short of the London mayor’s 35% target in the capital. In Wandsworth, where 17 councillors declared interests or entertainment with property companies, 19% of new homes built between 2013 and 2016 were affordable. In the City of London, where 12 councillors declared interests, only 3% were affordable.

London Elections 3rd May

As the political party apparatchiks go out and about trying to convince the cynical and sceptical public to vote for their same old tried and tired solutions and policies the Socialist Party offer something a lot different. As socialists, we wish to help change the world in a positive direction, not get ourselves into the offices of the local council. We in THE SOCIALIST PARTY are putting forward an alternative to capitalism and the madness of the market—a society of common ownership and democratic control, real socialism, not the elite-run dictatorships that collapsed in Russia and East Europe, nor the various schemes for state control put forward by the Labour Party.

Capitalism can only function in the interest of the capitalists, no palliatives can (nor ever will be able to) subordinate capitalist private property to the general interest. So long as class exists, any gains will be partial and fleeting, subject to the on-going struggle. What we should be opposed to is the whole culture of reformism, the idea that capitalism can be tamed and made palatable with the right reforms. Over decades, millions of workers have invested their hopes in so-called ‘practical’, ‘possibilist’ organisations and policies, hoping against hope that they would be able to neuter the market economy when, in reality, the market economy has successfully neutered them. They turned out to be the real ‘impossibilists’. Demanding the unattainable humanised capitalism is one of the greatest tragedies of the last century and it is made all the greater because it was all so predictable. Many held and still hold such as the authors the idea that capitalism could be reformed into something kindly and user-friendly. It couldn’t and it can’t.

The Socialist Party has no objection to workers and socialists getting involved in fights for partial demands but doesn't believe a socialist organisation should do that. We regard the strategy of making transitional demands as manipulative. A socialist party's task is NOT to "lead” the workers in class struggle or even to instruct its own members on what to do in trade unions, tenants' associations or whatever because we believe that socialists and class-conscious workers are quite capable of making decisions for themselves. To those who still say that, while they ultimately want socialism, it is a long way off and we must have reforms in the meantime, we would reply that socialism need not be a long way off and there need not be a meantime. It is only when people leave reformism behind altogether that socialism will begin to appear to them, not as a vague distant prospect, something for others to achieve, but as a clear, immediate alternative which they themselves can - and must - help to bring about. 

Most on the Left believes class struggle militancy can be used as a lever to push the workers along a political road, towards their "emancipation." How is this possible if the workers do not understand the political road, and are only engaging in economic struggles? The answer is the elitist Leninist "leaders in-the-know" who will direct the workers. But these leaders lead the workers in the wrong direction, toward the wrong goals (nationalisation and state capitalism), as the workers find out to their sorrow.

One of the great strengths of the Socialist Party is our opposition to leadership and our commitment to democratic practices, so, whatever weaknesses or mistaken views we hold or get accused of, they cannot be imposed upon others with possible worse consequences. The history of Leninism/Trotskyism blames all on the lack of leadership or the wrong leadership or a traitorous leadership. The Socialist Party are not going to take the workers to where they neither know where they are going nor, most likely, want to go. This contrasts with those who seek to substitute the party for the class or who see the party as a vanguard which must undertake alone the task of leading the masses forward. The crucial part of the Socialist Party case is that understanding is a necessary condition for socialism.
The Socialist Party’s job is to make a socialist society an immediacy for the working class, not an ultimate far-off ideal. Something of importance and value to people’s lives now, rather than a singular "end".  There is no point in drawing up in advance the sort of detailed blueprint of industrial and social organisation. For a small group of socialists, as we are now, to do so would be undemocratic. We also recognise that there may not be one single way of doing things, and precise details and ways of doing things more than likely vary from one part of the world to another, even between neighbouring communities. Nor can we determine what the conditions will be when socialism is established. As the socialist majority grows, when socialism is within the grasp of the working class, that will then be the proper time for making such important decisions. It is imprudent for today’s socialist minority to be telling people how to administer a socialist society. When a majority of people understand what socialism means, the suggestions for socialist administration will solidify into an appropriate plan. It will be based on the conditions existing at that time, not today. At this point some will no doubt say "cop-out" but no. We can reach some generalised conclusions based on basic premises and can outline broad principles or options that could be applied. We do not have to draw up a detailed plan for socialism, but simply and broadly demonstrate that it is possible and therefore refute the label of “utopian”. Never forget that socialist society is not starting from a blank sheet and we are inheriting an already existing production system. Workers with all their skills and experience of co-operating to run capitalism in the interests of the capitalists could begin to run society in their own interest.

VOTE 

ISLINGTON JUNCTION:

Bill MartinRICHMOND BARNES:Adam BuickSOUTHWARK BOROUGH AND BANKSIDE:Kevin Parkin

Sweated Labour

“If you know how to stitch cloth then you will easily find work in a garment factory, but surviving here is not easy, as they squeeze you like they squeeze the clothes” -  Lakkuben, a garment worker. 

In their constant drive to increase profits,  big multinational clothing chains have in recent years set up production houses in Narol, on the outskirts of Ahmedabad. It is a very large industrial hub that manufactures readymade garments, especially jeans, readymade shirt, pants, and T-shirts, sold widely in domestic markets as well as abroad. It attracts workers not just from the city and its rural hinterland, but from across India, especially from Uttar Pradesh, Bihar, Rajasthan, and Maharashtra. Just like their counterparts in Bangalore workers here too earn meagre salaries and work in precarious conditions, with little respite to the chronic poverty that their families face back home.  As a result of the structural adjustment programmes initiated by World Bank and International Monetary Fund in the 1990s, many major western clothing chains shifted their production to developing countries, such as Bangladesh, Pakistan and India primarily because of lower labour cost. During this period, Narol emerged as a major garments hub in India along with centres like Tiruppur in Tamil Nadu, Delhi, and Bangalore.

The shift from mainly male workers to an increasing proportion of lower paid female workers in the garment workforce has been one of the major ways in which industrialists have been able to keep their labour costs down. Data show that in the past five years, the number of women employees has increased by 15% in the textile industry and the rate is double in Gujarat. 

The workers are given impossible targets each day, of stitching about 400-500 pieces, which is estimated to be three-to-four times what is humanly possible. As a result, they work at a frantic pace, often forgoing meal breaks or using the toilet. Yet, they constantly fall behind the target, which gives the management an excuse to penalise or fire them. Overtime work in the industry tends to be compulsory both for regular and contract workers; if there is a large order with tight deadline, everybody is forced to work overtime without any incentives or wages, coerced by threat of termination for refusal.

“I spent 12 years of my life working and living inside this factory, still I am not in the payroll of this factory nor am I identified as a worker” says Kamilaben, an Adivasi. She started work at the wage rate of Rs 180. Now she gets Rs 270 as daily wage. During the last 12 years, her wage has increased by only Rs 90. She and her husband do the same work but her husband is paid more. “Our shift keeps changing every week and night shifts are scary as we feel extremely unsafe in the factory. We have to take our kids along while we go for work and we keep them in a cradle made of cloth" Her testimony speaks volumes about the kind of physical risk and health hazards these workers and their children face in these factories.

“We are not allowed to leave the premises unescorted, visits from family are not encouraged and there have been numerous unregistered complaints of sexual harassment in the confines of these units” says Sushilaben, an adivasi worker. Sushilaben ’s life is completely restricted to the factory’s premises 24/7.  “We are grateful to god for gifting us nights, otherwise how else could we have taken the much-needed rest” she says.

Most women who work in these congested and closed spaces of these stitching units, face not only health hazards but also a constant threat of sexual harassment and exploitation, all in the name of protecting their sole source of livelihood.

“The factory owners prefer to hire younger women and a woman is never assessed based on her work. Her retention depends on her looks and to what extent she doesn’t speak up against the exploitation” says Vanaben, who works as a helper in a garment stitching unit.

In their constant drive to increase profits,  big multinational clothing chains have in recent years set up production houses in Narol. As a result of increased competition, garment unit owners have been imposing even more exploitative conditions on their workers.

While the clothes these women stitch are flaunted by big multinational in their world of glitz and glamour, the grim state of affairs of women workers employed in Narol’s garment industry, whose hard work and contribution to the economy and society at large,  is invisible and under-valued. In the process of  providing cheap labour to the garment industry, these women workers are bearing disproportionately long-term costs in terms of their health, security, well-being and basic human dignity, while the industry reaps higher and higher profits.

https://thewire.in/labour/in-narol-the-lives-of-migrant-garment-workers-hangs-by-a-thread

Two workers were burnt to death in yet another factory fire in the national capital — this time at a jeans manufacturing unit at Gandhi Nagar in Shahdara district of north-east Delhi. This is the sixth such incident — of workers dying after a factory caught fire — since the beginning of this year, and the fourth in the last month alone. A total of 28 workers have reportedly died in factory fires in 2018 so far.

On 20 January, 17 workers were charred to death at an unauthorised firecracker unit in Bawana Industrial Area. These workers included at least seven women too, including one who was pregnant.

On 10 February, one worker died after a fire broke out at a garment manufacturing unit in Karol Bagh.

On 7 April, two workers died in a blaze at a footwear manufacturing unit at an industrial area in Bhorgarh, Narela, in north-west Delhi.

On 9 April, four workers — including two minors — died after a fire broke out at an illegally  running shoe manufacturing unit in Sultanpuri of north-west Delhi.

On 17 April, two workers died in a fire at a crockery factory in Nawada. 

Many of the factories that comprise Delhi’s unregulated small industries sector operate in unauthorised areas, usually residential areas of the lower middle class and slum areas — which are not part of the officially designated industrial areas. Typically, because these factories are operating illegally, there are no fire safety measures, no labour laws are followed and the working conditions are deplorable. Another common practice in such units is that the factory gate is locked from the outside even as the workers sleep inside — as was the case in both the Sultanpuri unit and the Nawada unit. At the time of the Sultanpuri fire, 40 workers were sleeping inside the factory.

Workers in such factories are paid a paltry wage — much below the minimum wage — while working overtime. In Delhi, the official minimum wage for an eight-hour work day is Rs 13,350 per month for unskilled workers, Rs 14,698 for semi-skilled workers and Rs 16,182 per for skilled workers, according to a notification in March 2017. In the Bawana factory, workers were reportedly up to Rs 200 per day for a 10-hour shift. In the Sultanpuri shoe manufacturing unit, workers were being paid on a piece-rate of Rs 30 per pair of shoes, while working 10-12 hours per day.

So why are these incidents continuing to happen? 

“It is the same old story. It is because of the callous attitude of the government that such tragic incidents continue. Inspection and implementation are weak. Officials are corrupt and often ignore violations,” said Anurag Saxena, general secretary of the Delhi unit of the Centre of Indian Trade Unions (CITU), speaking to Newsclick.“These illegal units tend to operate on extremely small premises. It is not even possible to install the fire safety measures as required by the law. Saxena said there were just 11 labour inspectors to take care of more than 20 lakh workers in Delhi. He said one solution was to shut down the illegally running units.

 the challenge in front of the Trade Unions is to organise workers in the unorganised sector and take up these issues more aggressively. 

https://newsclick.in/delhis-factory-fires-swallow-more-workers

Lest We Forget

Neglected but not forgotten

A century ago, on April 27th, 1918, India’s first labour union was born right here in the city of Chennai, then known as Madras, when workers of Buckingham and Carnatic Mills formed the Madras Labour Union. The trade union was a historic act of resistance against exploitation. It eventually led to enactment of the Trade Union Act in 1926. Much has changed since the days of the Madras Labour Union. 

 It is important to note that it still offers the trade union movement important lessons for today especially regarding the need for a larger and more inclusive working class solidarity. The struggles are evidence that union could not have been formed without the support of the larger community and how this process not pushed workers to build a strong movement to fight for their collective rights but also transformed individuals to shift their political engagement to build working class movements.

 Just like today, even then, the management refused to recognize the union. Various forms of intimidation from lockouts to police harassment and even shootings were used to break the workers’ unity and the company was forced to increase welfare measures to prevent workers from joining the union. In the age of regionalism and nationalism, it is all the more important to highlight that activists came from very different regions and backgrounds to work together and build working class solidarity.

Rich and Poor in Iraq

According to the World Bank, the poverty rate in Iraq's liberated territories has doubled to over 40 percent, and the UN warns that one in four Iraqi children now live in poverty. 

Poverty and a lack of services are preventing rebuilding in Mosul, forcing thousands to choose the lesser of two evils and return to the refugee camps. Over 37,000 Mosul returnees have chosen to go back to the IDP (internally displaced person) camps since January while 2 million have yet to go back home. In some of the camps to the east of Mosul, the returnees outnumber those who are leaving to go home. 

Much of west Mosul lies in ruins. In some parts of Mosul, the rubble, and the mines and bodies beneath it, continue to prevent returns.  Poverty has grown since the IS occupation and the subsequent war, and nine months after the city was declared liberated their homes remain barely habitable. The World Bank and Iraq's government set up a special fund of $300 million (€248 million) in February to improve living conditions for more than 1.5 million poor households by increasing access to basic services and creating job opportunities. According to the UN, in Mosul alone more than 40,000 houses need to be rebuilt or repaired. The organization estimates that rebuilding in Iraq's liberated territories will cost at least $17 billion. What's more, schools are overcrowded and health services are below standard.  According to the World Bank, the unemployment rate in Iraq's liberated areas is currently around 21 percent.

The situation in East Mosul is very different, with rebuilding in full swing. Here, the wealthier citizens have access to loans from friends and institutions. Hovig Etyemezian, who heads the Mosul office of the UNHCR,  points to the private-sector solutions introduced there to counter the lack of state-provided electricity and water: "Generators and water are brought in by trucks. The issue is whether you can afford to pay for it."

 Etyemezian explains, "People no longer have the means to live and are returning to the camps. Their actions are not linked to the security situation or the armed conflict. "Camps for me are the final and the worst option," Etyemezian said. "They are supposed to be temporary, the last resort. Displacement leads to trauma every time. Meaning that if people return because it did not work out, they suffer additional trauma. The more displacements you experience, the more traumatic and the less dignified your life becomes," he added.

Etyemezian has seen time and again, " the assumption, when a war ends, that the problems are solved. But actually, you often need more money after a conflict. Because it's only when the dust settles that you realize how much damage has been done. It is easier when a conflict is at its peak, as people come to you and the media and donors can see it. Now it is much more complex."

No Gain in Gas in Papua New Guinea

The massive ExxonMobil-led liquid natural gas project in Papua New Guinea, backed by a $500m Australian government loan, has failed to deliver on a promised economic boom for the country a new report has found. The PNG people would have been better off if the project had never happened.

The US$19bn project has been supplying LNG to Japan, South Korea, and China since 2014, using gas production and processing facilities connected by 700km of onshore and offshore pipeline across PNG. The project, owned by an Exxon-led joint venture, was strongly backed by the Australian government through the largest loan ever provided by the nation’s export credit agency. The $500m loan from Australia’s Export Finance and Insurance Corporation (Efic) was made with two chief aims: to help Australian exporters win contracts in the project’s construction phase; and to potentially add “considerably to PNG’s economic growth”.

Paul Flanagan, a former senior Australian treasury official, found that overall, the PNG economy had grown by 10% – far less than the near-doubling of GDP predicted in Exxon-commissioned modelling produced in 2008 by the strategy consultants, Acil Tasman (now Acil Allen).

That same modelling, which has been removed from the ExxonMobil website, predicted the project would help drive significant growth in other areas of the economy, but the reality has been quite different. The report found:

• 1) instead of household income increasing by a predicted 85%, it fell by 6%.
• 2) instead of employment increasing by 42%, it fell by 27%
• 3)instead of government expenditure to support education, health, law and order, and infrastructure increasing by an estimated 85%, it fell by 32%
• 4) instead of imports increasing by a predicted 58%, they fell 73%
• 5) instead collecting  around 1.4bn kina (AU$567.8m) in revenue the report estimated the PNG government should have collected about 500,000 kina (AU$203,000).
• “On every other measure of economic welfare (household incomes, employment, government expenditure, imports and every non-resource sector of the economy), the PNG economy currently would have been better off without the PNG LNG project, often drastically so,” wrote Flanagan.
• Dr Luke Fletcher, executive director of Jubilee said there was little to no transparency about what assumptions were made by economic modellers hired by resource firms proposing large-scale projects. Fletcher said the problem wasn’t just restricted to PNG but occurred across Australia. 
  “It’s about transparency about how these models are conducted, but also accountability when the models turn out to be bogus or problematic,” he said. “The argument we’re making is that this is a decision which had a huge impact on the economy of a country of six million people,” he said. “These decisions have huge consequences, not just for particular communities but in this case for an entire nation. There needs to be more of a public discussion about what taxpayer money is going towards.” Fletcher noted the broad exemptions Efic had from freedom of information laws. “Given what we’ve seen in PNG … there’s just no way for there to be accountability unless we’re able to understand its decision making. Unless it’s releasing its decision-making and benchmarking its due diligence, there is no way we can hold them to account.”
• Fletcher said, there were also concerns about the government management of what was collected.
  “The resource curse is a well-established phenomenon where you get a huge resource boost to a relatively undeveloped economy and despite what you’d expect the economy doesn’t do well,” he said. Fletcher said profligate spending during the construction phase, weak central institutions like the sovereign wealth fund and central bank, and poor management of the exchange rate which hit non-resource sectors hard, were all potential contributors to the dramatic economic decline.
  “This is exactly what happens when a country goes down this path – it puts all its focus and belief that resources are going to solve everything,” said Fletcher. “This is not just a PNG problem, Australia in many ways could be seen to be cheerleading, not just with Efic but in encouraging PNG down this path, with an unique belief that big resource projects can solve anything.”
• https://www.theguardian.com/australia-news/2018/apr/30/australian-backed-gas-project-fails-to-deliver-png-economic-boom-report

Paying for your pension by lowering wages

In Australia raising the superannuation guarantee from 9.5% to 12% will reduce workers’ wages and could actually hurt the retirement incomes of low-paid workers, the Grattan Institute has warned. “If our politicians really want to help low-income workers, and are serious about fixing the budget, they should abandon plans to raise the super guarantee,” the report concluded.

The Grattan Institute chief executive John Daley and co-authors Brendan Coates and Trent Wiltshire explained “Higher compulsory super contributions are ultimately funded by lower wages.”

The Grattan authors argued that increasing the super guarantee may actually reduce retirement incomes for the bottom 40% of income earners because they will lose pension payments.

Since pensions are indexed to wage growth, lifting the super guarantee could make existing pensioners worse off by up to $460 a year for singles and $640 a year for couples by suppressing the value of their pension payments.

The Grattan authors argue high-income earners would be the big winners, because by saving more of their income they would be taxed at a flat 15% rate on extra contributions to their super fund, lower than their current rate of income tax.

The Australian Chamber of Commerce and Industry’s acting chief executive, Jenny Lambert, backed O’Dwyer’s argument that super payments reduced take-home pay.

She told Guardian Australia that workers “will be far less likely to see a return to higher wage increases if increased labour costs are diverted into superannuation”.

https://www.theguardian.com/australia-news/2018/apr/30/boosting-compulsory-super-to-12-could-hurt-wages-report-warns

UN visit Rohingya Refugee Camps

A UN security council delegation arrived in Bangladesh on Friday as part of a trip to hear first-hand the experiences of 700,000 Rohingya refugees subjected to a campaign of violence, rape and arson at the hands of Myanmar’s military since August 2017. Members of the UN security council have expressed dismay at the “overwhelming” suffering they encountered. While UN reports have already condemned the violence as both ethnic cleansing and having “all the hallmarks of genocide”, this is the first visit by the security council and holds great significance. The council has the power to refer matters to the international criminal court (ICC) and to deploy peacekeepers.

Lise Gregoire-van Haaren, deputy permanent representative of the Netherlands to the UN, said: “The number of heavily traumatised women, men and children is beyond comprehension."

Karen Pierce, the UK ambassador to the UN, who was among the 15 members on the trip, was confronted by dozens of Rohingya refugees making emotional pleas for the UN to hear their stories and make sure justice was done. Women wept in her arms as they recounted their experiences.

“It shows the scale of the challenge as we try as a security council to find some way through that enables these poor people to go home,” Pierce said. “The sad thing is there’s nothing we can do right today that will make their distress any less.”

The deputy US ambassador to the UN, Kelley Eckels Currie, described the visit as “quite overwhelming”.

“Obviously the scale of this camp is unlike anything I’ve ever seen. It is going to be a disaster when the rains come,” she said.

The security council will visit the Rakhine state, where the violence against the Rohingya was carried out, with the main goal of inspecting whether the displaced Rohingya can return safely. The UN has been denied access to Rakhine until now and the relationship between the organisation and Myanmar has been fraught because of the former’s description of the violence as ethnic cleansing and genocide.

False Flags

Throughout history, false flag operations have been used to provide casus belli—a justification for war. In 1788 a squad of Swedish soldiers dressed in Russian uniforms attacked a Swedish military outpost, giving King Gustav III grounds to attack Russia. Japan seized Manchuria in 1931 after its forces bombed its own rail line there and blamed the Chinese. In 1939 the Nazi leader Reinhard Heydrich dressed concentration camp inmates in Nazi uniforms, had them shot, and then, seeking to win sympathy for the Nazi occupation of Poland, claimed that Polish partisans had killed them. That same year, Soviet forces bombarded a Russian village near the border with Finland, blamed it on the Finns, and four days later invaded Finland.

Some false flag operations require committing murder and other crimes that can be blamed on the enemy. The effect is greatest when the crime is especially horrific. During the 1970s, Africans working for an elite Rhodesian force called the Selous Scouts killed hundreds of civilians while disguised as Mozambican soldiers. Security forces in Turkey staged attacks and blamed them on Kurdish guerrillas. Algerian commandos disguised as terrorists carried out killings that were used to justify police repression. Security forces in Russia have been accused of staging bombings that they blamed on Chechen rebels.

In 1954, as the British were preparing to withdraw troops from Egypt, Israel tried to scare them into staying as protection against Arab nationalism. Israeli operatives recruited agents to set off bombs at American and British cinemas, libraries, and schools. The bombings were to be blamed on Communists and the Muslim Brotherhood, but the plan was discovered. Israel’s defense minister was forced to resign.

In 1962, senior American officers proposed a large-scale false flag operation aimed at providing what one memo called “justification for U.S. military intervention in Cuba.” At various stages, it involved plans for sinking a boat full of Cuban refugees, shooting down a civilian airliner, and assassinating Cuban exile leaders in Florida—all to be blamed on Cuba. One related proposal urged that if the launch of astronaut John Glenn failed, the United States should blame it on Cuba. Another suggested a military attack on a Latin American country staged to look as if Cuba had ordered it. Officers even proposed organizing an assault on the U.S. base at Guantanamo so they could use it as proof of Cuba’s hostility. They presented these plans to President Kennedy at an Oval Office meeting, but he rejected them.

Depressing News

 At the end of this month, the US will have enjoyed its second-longest period of economic expansion in history, beating the upswing under John F Kennedy and Lyndon Johnson between 1961 and 1968. The US has beaten the record 10-year period of growth between the end of the Gulf war in 1991 and the 2001 dotcom bust. A dramatic cut in interest rates and a $1 trillion government rescue package prevented the US economy falling off a cliff in 2008 and kept inflation from falling below 1%. But efforts to boost inflation back above 2% only achieved momentary success in 2012. Nevertheless, the US central bank, the Federal Reserve, has increased the cost of borrowing four times since 2015 and plans several more rises this year. 

The reasons for America’s recovery are simple. Interest rates were cut quickly and aggressively by the country’s central bank, the Federal Reserve, and kept at rock-bottom levels for seven years. The Fed also pumped trillions of dollars into the economy through the process known as quantitative easing – buying bonds to expand the money supply. Swift action was taken to clean up the financial system so that the banks could start lending again. Obama announced a modest package of tax cuts and spending increases. Lessons were learned from the mistakes of the Great Depression in the 1930s when demand was sucked out of an already weak economy and banks were allowed to fail. The measures got the US slowly moving again. It helped that the authorities in Beijing were simultaneously using even more aggressive measures – big infrastructure projects and expansion of credit – to stimulate the Chinese economy.

Nevertheless, traditionally, the US has recovered sharply from downturns and had several years of fast growth. In the 1960s, for example, the US economy grew by 4.9% a year on average while in the 1990s it expanded by 3.6% a year on average. The average during the current expansion is 2.2% and it is the first business cycle since the second world war in which there has not been a single year of growth above 3%.

At 1.4% a year, employment growth has also been modest. America’s hire-and-fire culture has meant workers can be laid off in large numbers during recessions and then taken on again during the subsequent recoveries. In the 1980s upswing, for instance, jobs growth averaged 2.8% a year.

US wages have waxed and waned during each of the postwar recoveries except for the most recent one, which has seen wage rises remain low for almost the entire period. Economist Robert J Shapiro says automation in the internet age has been one of the biggest factors depressing wages.

Nor has the recovery followed Kennedy’s dictum that a rising tide should lift all boats. Half of the growth during Obama’s presidency went to the top 1% of US households, with the lack of real income growth for middle America helping to explain both the muted nature of the upswing and the discontent that propelled Trump to the presidency.

All upturns come to an end sooner or later and the fact that it is now almost nine years since the US emerged from recession has inevitably led to speculation about when and how the next downturn will arrive. Dario Perkins, managing director of global macroeconomics at the research company TS Lombard, says he thinks, the end will come – as it did in both 2001 and 2007 – with the popping of an asset-price bubble. “Recent history suggests any problems are more likely to start in the financial sector and with central banks tightening policy and asset prices high by historical standards, this is surely the area to watch over the next 12 to 18 months.”

https://www.theguardian.com/business/2018/apr/28/america-long-slow-boom-recovery-last-economics

Less Home-ownership

Home ownership among young families has plummeted across every corner of Britain over the past 35 years. The proportion of families headed by a 25- to 34-year-old that own their own home has more than halved in some regions, showing that the crisis goes far beyond London.

Millennials are being forced into increasingly cramped and expensive rented properties that leave them with a longer commute and little chance of saving for a home. It also finds an increasing proportion of the young living in overcrowded housing. Even favourable economic conditions are likely to result in millennials catching up with the home ownership levels of the previous cohort only by the age of 45. Fast-growing inheritances will help some, but nearly half of young non-homeowners have parents who do not own either.

Millennials, classed as those born between 1981 and 2000, are half as likely to own a home at the age of 30 as baby boomers because of higher prices, low earnings growth and tighter credit rules. In the 1980s it would have taken a typical household in their late 20s around three years to save for an average-sized deposit. It would now take 19 years, the analysis shows. Millennials are now spending an average of nearly a quarter of their net income on housing, three times more than the pre-war generation, now aged 70 and over.

Almost two-fifths of millennials rent privately at 30, double the rate for Generation X, born between 1966 and 1980, and four times the rate for baby boomers – born after the war until 1965 – at the same age. Their living space is also declining. Each person living in the private rented sector now has on average eight square metres less space than they did in 1996. Meanwhile, those who own their own homes enjoy an extra four square metres each. Since younger households are more likely to be private renters than owners, they now have less space on average per household member. Just under one in 10 households headed by millennials in their late 20s now live in overcrowded conditions.

They are facing longer commutes than older generations endured. If current differences continue, millennials will spend almost three full days more commuting in the year they turn 40 than the baby boomers did at the same age.

Ownership among 25- to 34-year-olds has plummeted in Greater Manchester from 53% in 1984 to 26% last year. 

It has fallen from 54% to 25% in south Yorkshire, from 45% to 20% in the West Midlands, from 50% to 28% in Wales and from 55% to 27% in the south-east. 

In outer London, the proportion has collapsed from 53% to just 16%. 

Out of 22 regions analysed by the commission, in only one – Strathclyde in Scotland – has home ownership among the young remained stable. It stood at 32% in 1984 and 33% last year, having peaked at 45% in 2002.

Ownership in London has fallen consistently over the past 30 years, whereas rates in some other parts of the country declined more slowly before the early 2000s, but very rapidly thereafter.

The Resolution Foundation says that a combination of an ageing population and an increased demand for services which governments are committed to deliver means that welfare spending looks likely to increase very substantially in the coming decades. Under a pessimistic scenario of future home ownership, based on trends seen in 2002 to 2012, less than half of the oldest millennials would own a home by the age of 45, compared to more than 70% of baby boomers at that age.

https://www.theguardian.com/society/2018/apr/28/proportion-home-owners-halves-millennials