Monday 28 June 2010

G20: FROM STIMULUS TO AUSTERITY AT DIZZYING SPEED


The G20 meeting in Toronto of the leaders of the main capitalist governments of the world demonstrated a complete incapacity to solve the huge problems that confront us, particularly those hardest-hit – the poor and the working class – by the economic crisis.

This was supposed to be the economic summit that would 'celebrate' the so-called economic stimulus packages introduced by capitalist governments throughout the world, which 'saved' capitalism from a 'depression'. Instead, in a dizzying switch over a matter of months, the prevailing view at this meeting was in favour of those governments such as Britain's 'ConDem' coalition, led by David Cameron, that are savagely cutting public expenditure.

The summit papered over the cracks – in effect glaring divisions – between the Barack Obama government in the US and its supporters on one side and the European capitalists on the other. Thirty million people are unemployed in the US and whole states are collapsing under the burden of debt; Obama requires not cuts but a new stimulus package to prevent defeat in the mid-term elections in November. But the US Congress is against this and has turned down further stimulus.

The budget-slashers of Europe threaten to compound the problems of the US and world capitalism by their actions. Foremost, of course, amongst this group is the British government.

The full horror of the proposed cuts and their implications are only just dawning on commentators. William Keegan wrote in the Observer (27 June): "The old Soviets used to indulge in five-year production plans; the Cameron/Osborne Tories believe in five-year reduction plans".

The miserly growth rate of Britain, Europe and indeed world capitalism, if it can be called 'growth', threatens to lengthen the queues of unemployed. It will not make up for the damage which has been inflicted already. Growth in Britain is expected to be just 1.25% this year after a fall of almost 5% in 2009.

When the government and capitalist economists talk about recovery', they are only talking about a 'technical' recovery. There is no new 'growth phase' for either British or world capitalism. The Organisation for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF) have been forced once more to scale down their forecasts for growth in the world economy this year. Dominique Strauss-Kahn, IMF managing director, has pointed out that growth at 2.5% below what was first predicted as 'possible', means that '60 million jobs' will not be created this year.

Keynesian capitalist economists are in despair. Their views seemed to be in the ascendant in the immediate aftermath of the crisis breaking in 2007-08. Now, terrified by the implications of huge deficits, European capitalism, at least, has moved in the opposite direction towards 'austerity' stretching into the indefinite future.

Keynesianism means, in effect, priming the pump, boosting economic expenditure through the state as a means of preventing further economic collapse. The dilemma arising from this is 'who pays?' If it is the working class through increased taxes, it cuts the market. If it is the capitalists through increased taxes or other measures, it would threaten a strike of capital, the withdrawal of investment, closure of factories and a big rise in unemployment. If there is a resort to the printing press not backed up by production of goods and services, it will ultimately result in inflation.

But the method now of savage cuts is a case of the 'cure being worse than the disease'. The economist Joseph Stiglitz is scathing about the new 'age of austerity': "It's not just pre-Keynesian, it's Hooverite" (the Independent, 27.6.10). Herbert Hoover was the president of the US at the time of the 1929 Wall Street Crash. "Hoover had this idea that, whenever you go into recession, deficits grow, so he decided to go for cuts". The result was the 1930s' Great Depression. Hoover received this advice from his Treasury secretary, Andrew Mellon: "Liquidate labour, liquidate stocks, liquidate the farmers, liquidate real estate ... purge the rottenness out of the system".

This has been underlined by the brutal austerity measures of Chancellor George Osborne, backed up by the rapidly discredited Liberal Democrats. This government, in its callous attacks, shows all that historic cold cruelty of the British capitalists. The Observer estimates that there has been a halving of support for the Lib Dems in less than two months.

Indeed, throughout Europe, from Angela Merkel in Germany to George Papandreou in Greece, where they have engaged on the road of austerity, capitalist governments have seen their popularity crash. In the case of Merkel, she has almost been reduced to a figure of fun in the German capitalist press.

The British government's austerity programme promises, in effect, a one-third reduction in all government departments with the exception of international development and health, which the government claims are 'ring-fenced' from cuts, and education and defence which are cut less. This means a cut in state expenditure on the scale of the Geddes report of 1922, whose implementation led directly to the general strike in 1926. However, before it reaches the target of one-third cuts, the government will be overwhelmed by a tsunami of opposition.

The idea that the private sector can take up the slack of these cuts is totally wrong. The day after the end of the G20, the Independent reported: "British manufacturing will slide to a woeful 20th position in the world competitiveness rankings over the next five years". Even US manufacturing is set to fall from fourth to fifth as it is overtaken by Brazil. In fact, Obama's failure to impose his agenda on the G20 is a sign of US capitalism's weakness – although its economy is still the most powerful in the world.

At the moment, the UK is the seventh largest manufacturing sector in the world, led by the pharmaceuticals, food and the aerospace and defence sectors. It still accounts for 14% of UK gross domestic product (GDP) compared to just 7% for financial services. But the share of manufacturing in total GDP has dropped from 20% a decade ago. Nothing the government has done can restore this position. Indeed, millions of jobs in the private sector are dependent on the public sector and they will be hit as the cuts bite.

The situation is so serious now the budget-slashers are installed in power that most capitalist economists predict a 'double-dip' recession. In effect, the world economy stands on the edge of deflation because of the measures taken. China will not show a way out of the crisis, as hoped for by Obama and the European capitalists. Obama has been pressing China for a revaluation of its currency to make Chinese exports more expensive, providing opportunities for the US and other economists to 'grow' their exports. But following China's decision to allow some flexibility in its exchange rate, its currency has 'appreciated' by just 0.4% against the dollar in the last week!

To add insult to injury, all these cuts will not improve the position of the economies on which they will be inflicted. The governor of the Bank of England in the 1920s and 1930s, Montagu Norman, imposed the Gold Standard on the economy. Later on he acknowledged: "As I look back, it now seems that, with all the thought and work and good intentions, which we provided, we achieved absolutely nothing… Nothing that I did, and very little that [others] did, internationally produced any good effect — or indeed any effect at all except that we collected money from a lot of poor devils and gave it over to the four winds".

The working class are the poor devils who will suffer. What this demonstrates is that capitalism is a blind system with the likes of Osborne 'flying blind'. Their sole purpose is to 'satisfy the markets', a handful of bond traders, speculators and capitalists who have no other interest than to increase their share of the loot.

The demonstration of bankruptcy in Toronto must be taken by the working class in the US, Europe and worldwide as a signal to begin an offensive to confront the capitalists and their system now. We must start in Britain with a mass campaign to resist every single cut – what is at stake here is the very existence of the welfare state whose gains were conquered by successive generations of the working class. If the national trade union leaders are not prepared to lead, then a movement must come from below.

This was the call from the tremendous National Shop Stewards Network conference held in London last Saturday. We must implement the call made there for the trade unions to organise a national demonstration at the TUC conference in September and if this does not move the summits of the movement then action must be organised from below. Capitalism shows no way out; a fighting, militant, combative approach is necessary in day-to-day struggles of the working class, above all on the cuts, linked to the idea of the socialist transformation of society.

Editorial from the Socialist, paper of the Socialist Party (CWI England & Wales)

Wednesday 9 June 2010

The human cost of an iPad


Workers' suicides: The human cost of an iPad

Twelve workers have committed suicide so far this year at the factory that makes Apple iPads. Four others survived, gravely injured, and 20 were stopped from killing themselves by the company. All the dead were between 18 and 24 years old.

Foxconn - the city-sized factory in the Shenzhen free trade zone, southern China - employs 400,000 mainly migrant workers. They work 70 hours a week for about 50 cents an hour under a military-style administration and harsh working conditions.

Foxconn also supply Dell, Hewlett Packard and Sony and is one of the largest producers of computers and consumer electronics in the world.

One worker said: "We are extremely tired, with tremendous pressure. We finish one step in every seven seconds, which requires us to concentrate and keep working and working. We work faster even than the machines.

"Every shift (ten hours), we finish 4,000 Dell computers, all the while standing up. We can accomplish these assignments through collective effort, but many of us feel worn out."

A week ago an undercover team infiltrated the plant. They told the Daily Telegraph: "Hundreds of people work in the workshops but they are not allowed to talk to each other. If you talk you get a black mark in your record and you get shouted at by your manager. You can also be fined."

The company are constructing nets around the seven storey dormitories from which workers have been jumping. They have also hired 70 psychologists and brought in Buddhist monks.

Sweatshop

Terry Gou, the Taiwanese billionaire chairman of Foxconn's parent company Hon Hai, had toured the plant with journalists only hours before the latest death. "This is not a sweatshop", he told them.

Apple's sales were £30 billion last year. The company's audit of its own "supplier responsibility codes" shows that 102 facilities flouted the "rigorous rules" on working hours, 39% broke rules on workplace injury prevention and 30% broke guidelines on toxic waste disposal. There were also violations on child labour and falsified records. Will Apple cancel these contracts? I wouldn't hold your breath.

The modern, high tech, trendy image of Apple has proved to be a veil behind which hundreds of thousands of workers are brutally exploited in barbaric conditions.

Chinese workers need independent, democratic, campaigning trade unions to fight for decent pay and conditions and for an end to the tyranny of these workplace prisons.

John Sharpe, Socialist Party (CWI England & Wales)


 

Thursday 3 June 2010

PEACE ACTIVISTS MURDERED BY REACTIONARY ISRAELI ARMY


BUILD A MASS MOVEMENT TO BREAK THE SANCTIONS ON GAZA!

The Committee for a Workers International (CWI) in Lebanon, and internationally, offers sincerest condolences to family and friends of the activists murdered by the reactionary Israeli army while on a humanitarian aid mission. We salute the courage of all those activists, who organized this aid intervention, and we demand a safe passage through to Gaza for the 750 people from 40 different countries intent on breaking the Israeli-Egyptian blockade.

The boats that the Israeli soldiers attacked were carrying food, medicines, and materials to build prefabricated homes for the people of Gaza. One and a half million Palestinians remain prisoners of the largest open-air jail on earth, since Israel's siege on Gaza began in December 2008. The blockade of Gaza has meant unemployment rates of over 50 percent. The World Bank has stated that 90 per cent of water in Gaza is not suitable for human consumption, 80 per cent of the population lives on less than a dollar a day and 70 per cent depend on charity for food supplies. Chronic malnutrition affects 15 per cent of Gaza's children and its serious consequences for their cognition and growth will be felt for years to come. Israel's army has demolished 15,000 homes, destroyed schools, factories and services, and even demolished minarets from mosques. The illegal weapons used against the people of Gaza have killed hundreds and wounded thousands of civilians, including children.

The attack on the freedom boat is just the latest act of the Israeli regime's violence and more evidence of the mad aggression of the Israeli government. Now there are angry protests in the streets of Gaza, Palestine and all over the world by many thousands of people demanding an end to the Israeli regime's brutal oppression of Palestinians. The CWI is participating in these protests internationally and is part of building a mass movement against the racist, repressive and vicious Israeli regime. This capitalist government is supported by many regimes, both Arab and Western, in its repression and exploitation of the Palestinian masses and in its continuous military occupations and economic sanctions.

Arab regimes fail Palestinians, again

For Palestinian workers and the poor, this is the time to be united, in an independent mass movement of workers and the poor, inside and outside of Gaza. Such a movement is the only force able to break the siege and to open the borders. It would appeal to workers and the oppressed in the region to join the struggle for liberation and for an end to capitalism and barbarism. The Palestinian political factions have show, once again, that they are incapable of leading the Palestinian masses to liberation and workers and the poor, those paying the price for the policies of the ruling elites; need to rise up against the system of colonial wars and mass poverty. All Arab regimes, and all mainstream parties, are unwilling to call for the masses to break the siege on Gaza, as they fear that this will lead to an independent mass movement that will swipe them away from power. They are unstable and unpopular regimes, which are tied to the political and economic pressure of the big corporations.

The slaughter carried out by the Israeli armed forces on the freedom boats has drawn condemnation around the globe. But statements made by embarrassed UN diplomats and politicians all fall short of forcing an end to the siege, as they all, including the outspoken representatives of Turkey and Lebanon –two countries in conflict with Israel - are ruled by big capital and await a green light from US imperialism.

Protests erupted on the morning of this brutal slaughter, with hundreds of people in Lebanon, and tens of thousands across the region, taking to the streets, horrified by the senselessness of the Israeli regime. And while many feel that a war is unlikely at this moment in the region, during 'negotiations', most people would still not rule out the risk of another Israeli military attack on any resisting force in the region. What is clear is that the weakened Israeli government is trying to re-establish itself as a military might in the region, and for domestic reason, sending a message out that no one can break the sanctions which are aimed at Hamas and which are punishing civilians for supporting Hamas.

While Hamas's popularity has been decreasing recently because of their domestic policies (mainly economic but also social), these sanctions and this new slaughter will, if no mass movement is built and no socialist alternative is on offer, lead a number of desperate youth to look to the policies and methods of Hamas. This shows, once again, the urgent need for a socialist alternative to help build a mass workers' movement to break the siege and for the overthrowing of the brutal capitalist system in the region and internationally.

We say:

Release the detainees now!

End the sanctions on Gaza - Open the borders!

For a mass movement of workers and the poor in the region against capitalism

For an end to war and poverty – for world socialism

Aysha Zaki, CWI Lebanon