WORLD FOOD CRISIS: A SYSTEMIC FAILURE OF CAPITALISM

THE WORLD COULD BE FACING A REPEAT OF THIS YEAR'S FOOD CRISIS, AS THE IMPACT OF RECESSION UNFOLDS. THIS MONTH, DESPITE WHAT HAS BEEN DESCRIBED AS "HARVEST BUMPER CROPS", THE UN FOOD AND AGRICULTURE ORGANISATION (FAO) WARNED: "UNCERTAINTY IS EMERGING AS A DOMINANT FEATURE OF WORLD AGRICULTURAL MARKETS" AND "EPISODES OF RIOTS AND INSTABILITY COULD AGAIN CAPTURE THE HEADLINES".

ELAINE BRUNSKILL looks at the reasons behind this prognosis and condemns capitalism for being unable to provide basic nutrition for the well-being of humanity.

IT IS estimated that around 20,000 people, predominantly women and children, die of hunger every day. The United Nations estimates that 923 million people, approximately one in six of the global population, suffer from chronic hunger.

In the first three months of this year rice prices rose 141%. The price of one variety of wheat soared by 25% in just one day. And of course it was the world's poor in the neo-colonial countries, many of whom already spend around 80% of their income on food, who were hardest hit. In El Salvador, the poorest are now only eating half as much food as they were a year ago.

Although crop prices have fallen from the all-time highs of earlier this year, the FAO has warned against a "false sense of security".

On the impact of higher food prices, a spokesperson for the UN world food programme commented: "For the middle classes, it means cutting out medical care. For those on $2 a day, it means cutting out meat and taking children out of school. For those on $1 a day, it means cutting out meat and vegetables and eating only cereals. And for those on 50 cents a day, it means total disaster".

Even in the developed world, surging food prices have badly affected working class people and their families. In Britain the increased cost of food, alongside surging utility bills, has squeezed living standards. Food prices are 9.5% higher than a year ago, forcing many to drastically cut what they put in their shopping trolley.

In July, on a flight to a G8 summit in Japan which discussed the global food crisis, Gordon Brown strongly urged a reduction in "unnecessary demand" for food and called on British families to cut back on wasteful use of food. But his call for frugality didn't seem to apply to the world leaders attending the summit. Just hours later, he joined some them and their partners for a six course lunch followed by an eight-course dinner, both with plenty of luxury foods and wines. The staggering cost of the summit was estimated at £285 million.

The hypocrisy of Brown et al, feasting while discussing starvation in the developing world, was not lost on the world's working class and poor. A spokesperson from Save the Children commented: "It is deeply hypocritical that they should be lavishing course after course on world leaders when there is a food crisis and millions cannot afford a decent meal".

Social unrest

Governments across the planet continue to be fearful of the ensuing political and social unrest that is sparked by food hikes. As a spokesperson from the UN world food programme pointed out, unlike previous drought-induced famines, the recent food crisis was not about availability: "People can suddenly no longer afford the food they see on the store shelves because the prices are beyond their reach."

Strikes, protests and riots erupted in many countries. In Haiti protesters forced the prime minister to resign. In Egypt protesters chanting: "Aish! Aish!" - Bread! Bread! - pushed the president to order the army to bake bread for the hungry. Children in Yemen marched to highlight the hunger they were facing. In Mexico "tortilla riots" erupted as the cost of tortillas surged to as much as one-fifth of the wage of Mexico's working poor.

An article in The Times pointed out: "It is easier for urban slum dwellers to riot than for farmers: riots need streets not fields". Undoubtedly, food riots are worrying governments in both the developed and developing countries. However, the fear they have of riots pales when they begin to see how this resistance has the potential to develop into strikes or revolutionary movements when the organised working class moves into action.

In April, a general strike in Burkina Faso, where more than 46% of the population live below the poverty line, was triggered by soaring costs of food and fuel. Reuters reported that such is the discontent that workers from banks, shops, schools and government offices were joined by traders on informal stalls who scrape a living on street corners.

Causes of high prices

Numerous reports in the capitalist press point out that the causes of this year's world food crisis were "complex and interlocking". Speculation played a major role. Fears about investments in the US subprime housing market led to speculators taking billions of dollars out of financial institutions and ploughing them into basic food commodities.

The agricultural futures market was set up to lower the risk associated with price volatility for farmers and buyers. However, from the onset, speculators endeavoured to line their own pockets, regardless of the impact rocketing prices has on the world's poor. For spivs and speculators global shortages and hikes in food prices are good for business.

Other factors also played a role in food price rises, such as weather extremes, high oil prices, biofuel production and a growing global demand for meat. The surging cost of oil impacted on both the production and distribution of food. The manufacture of fertilisers requires petrol or natural gas (which also soared in price). In parts of East Africa farmers had to cut back on crops because they could not afford fertilisers.

High oil costs have led to the promotion of ethanol made from crops such as corn, oilseeds and sugar cane, as an alternative 'green' fuel. This year, 30% of US corn production is being used for the production of ethanol. The EU plans to get 10% of its auto-fuel from bio energy by 2020.

However, even if the entire US corn crop was used to produce ethanol, it could only replace 12% of current US gasoline usage. Therefore, as the price of oil continues to be unstable, the hunt for new sources of biofuels is underway.

In some of the poorest parts of the world, cassava, a potato-like tuber, is an important part of the diet. For example, in sub-Saharan Africa it provides one-third of the needs of the population, and it is the primary staple food for over 200 million of Africa's poorest people. However, its high starch content also makes it a good source of ethanol. Any surge in the production of cassava-based ethanol will have a direct impact on those who rely on it as part of their staple diet.

According to an article in Foreign Affairs: "Filling the 25 gallon tank of an SUV with pure ethanol requires over 450 pounds of corn - which contains enough calories to feed one person for a year".

Foreign Affairs also points out that in both the US and EU there has been a "panoply of subsidies, tariffs and mandates protecting the biofuel sector". However, alongside others it questions the assumption that biofuels are a green alternative.

For example, in the US, corn and soya beans used to often be planted in rotation. Soya beans add nitrogen to the soil, which is needed and used by the corn the following year. However, as corn is now increasingly being grown without the use of crop rotation, nitrogen has to be added to the soil. There are now major concerns in the US around this added nitrogen, as when it rains, the water leaks into waterways. In the Gulf of Mexico such leakage has resulted in a 'dead zone', an area of ocean the size of New Jersey that can barely support life.

Furthermore, scientific studies show the conversion of forest and grasslands to the production of biofuels incur a "carbon debt" from the release of biomass (which is material derived from living or recently living material). For example, in South-east Asia swathes of tropical forest are being burnt down to plant oil palms for the production of bio diesel. This craze for biofuels has been described as 'neither clean nor green'.

The impact of global warming, from record floods in China, to a prolonged drought in Australia, is having a catastrophic impact on harvests. Every year across the planet, drought, deforestation and climate instability ravage an area of fertile ground the size of Ukraine. Over almost a decade Australia has been gripped by a drought which has had a devastating effect on its wheat crop. Conversely, wheat and potato crops in the UK have been hit by flooding.

Drive for profit

Capitalism is utterly incapable of the planning which will be necessary to overcome such environmental catastrophes, because the 'hidden hand' of the free market economy is driven by the capitalists' quest for profit. The capitalist system cannot engage in planning to meet people's needs, because of this inbuilt, insatiable drive for profits.

The globalisation of agribusiness has heavily favoured rich countries and large corporations. Neo-liberal policies enforced by the World Bank and International Monetary Fund (IMF) have effectively used third world debts as a tool to access their markets.

In order to obtain loans or debt relief, governments from the developing world have been forced to restrict food subsidies, which makes it easier for multinational corporations to dump cheap exports, thereby undermining local food production. Yet at the same time huge subsidies are given to agribusiness in the developed word.

Between 1999 and 2002, $76 billion was handed out to US farmers. However, two-thirds of American farmers do not receive a dime. In 2003 the richest 10% of subsidised farmers took 66% of the payouts, the top 5% received 55%.

World Bank and IMF directives have also forced farmers in the neo-colonial world to mass produce cash crops for the world market, rather than produce a wide range of staple crops that can feed the local population. The terms of trade between rich and poor countries were progressively worsened to the detriment of the poor, ie less money was paid for their cash crops and more money was charged for goods they need to import.

The multinational agricultural conglomerates benefited hugely from this. The planet's poor may be starving, but big businesses are raking in super profits.

In April Monsanto reported its net income for the three months up until the end of February doubled in comparison to the same period in 2007; its profits leapt from $1.44 billion to $2.22 billion. Archer Daniels Midland, one of the world's largest agricultural processors of grain, saw its operating profit on its grains merchandising and handling operations soar 16-fold in the first three months of this year from $21 million to $341 million.

The food crisis worldwide highlights that capitalism is an inhumane, anarchic system which is incapable of feeding the world's masses. The Economist pointed out that in agriculture: "Yields cannot be switched on and off like a tap". However, the free market system is incapable of establishing a long term strategy.

For capitalism, food is just another commodity, from which profits can be extracted. When the market dictates that grain has a value as fuel, people in parts of the world go hungry. Likewise the price for seeds and fertilisers is based on the maximum profits that can be secured, regardless of the ability of neo-colonial farmers to buy at these prices.

We live on a planet where over a billion people barely exist on $1 a day and 1.5 billion live on $1-$2 a day. Capitalism has nothing to offer them - not even enough food in their bellies. In the developed world also working people are increasingly struggling to feed themselves and their families.

The strikes and protests that have rocked the neo-colonial world are a foretaste of future mass struggles that will develop across the planet. Such struggles can lead to the development of new mass parties of the working class that put forward an alternative to the brutality of the free market economy.

Ultimately, only a socialist society can eradicate hunger on a global scale. This would entail taking the agribusiness multinationals out of the hands of the profiteers. In their place would be a democratically run and publicly owned food industry; only then can we start planning production for the needs of the world's people.

US: POLITICAL AWAKENING PROPELS OBAMA TO VICTORY

But Will He Deliver?

On Tuesday, voters delivered a decisive, historic defeat to the Republican agenda of corporate greed, corruption, and war. While the total voter turnout remains unclear, experts are estimating up to 64% of eligible voters cast ballots, the highest in at least 40 years, potentially the highest in a century.

As news agencies announced Barack Obama had secured the 270 Electoral College votes needed to win the presidency, millions of Americans gathered in bars, living rooms, and election night rallies, erupted in cathartic celebration. Spontaneous street parties and raucous marches filled city streets late into the night. The reign of George W. Bush, the most hated president in modern history, is over.

On top of that, the election of an African-American as president of the United States, less than 50 years since legal segregation, is being greeted with widespread euphoria. Across the globe millions are in celebratory awe at the image of a black man, with the middle name of "Hussein," replacing the hated Bush regime. There is enormous hope that Obama's election night promise of "a new dawn for America" is indeed in progress.

But will Obama and the Democratic Party deliver? Facing the worst economic crisis since the Great Depression, a projected trillion dollar budget deficit reaching 6% of U.S. GDP, and a new unraveling of the wars in Iraq and Afghanistan, Obama and the Democrats come to power amid a massive crisis of U.S. and world capitalism.

Their problems are worsened by a sharp contradiction between the massive expectations for change among millions of workers and the actual big-business agenda Obama intends to carry out. In particular, it will be the same fierce economic anger which propelled Obama to victory which will, at a certain stage, push growing layers of the multi-racial U.S. working class into active opposition to his administration. The stage is set for a new, tumultuous period in U.S. history.

Decisive victory

The Democratic victory was overwhelming. Obama won 52% of the vote to McCain's 46%, defeating McCain by 7.4 million votes. Obama's victory with the undemocratic Electoral College was even more decisive - 349 to 163 - with the Democratic candidate taking several states previously considered Republican strongholds. In Congress, the Democrats picked up five Senate seats, with several races still undecided, though they will not likely reach a filibuster-proof 60 strong caucus. While several races remain undecided, in the House the Democrats have secured 20 more seats, which added to the 30 seats they gained from Republicans in the 2006 elections, gives them a decisive 254 to 173 majority.

According to exit polls, Obama won majority support in almost every demographic. Seven out of every ten urban voters supported Obama over McCain. The same proportion held for young voters and first time voters. In small cities, Obama won 59% of the vote, as well as 50% in suburbs. Only among rural voters and those over 60, did McCain win.

Obama's stunning fundraising advantage was another factor, allowing his campaign to dramatically outspend McCain in advertising and get-out-the-vote organizing. This was fueled in part by historic numbers of small donations, but more significantly big business and the financial oligarchs of America gave Obama their backing, filling his campaign coffers with over $640 million. The wealthiest Americans, making over $30 million a year, gave to Obama 3 to 1 over McCain.

Obama has rewritten the book on presidential elections, and not just by the sheer amount he raised or his decision not to take public financing. Obama received 3.1 million financial contributors. His Facebook page has 2.2 million supporters and he has more than 700 campaign offices in every state in America.

Among African-American voters, who turned out in historic numbers, 95% supported Obama. While only 43% of whites voted for Obama, this is a higher percentage than Clinton or Kerry received, and roughly half of white working-class voters backed Obama.

Though racism is by no means extinguished in the U.S. - indeed the McCain campaign's thinly veiled racist attacks revealed that deep pockets of bigotry remain - nonetheless Obama's ability to win support in regions and constituencies previously dominated by Republicans reveals a very real process of change in Americans' attitude toward race.

Racism undermined

Obama's victory itself does nothing to assure genuine change for the majority of African-Americans who continue to languish under poverty, de facto segregation, and police repression. At the same time, the symbolic importance of electing the first black president should not be underestimated. In a country where less than fifty years ago Jim Crow laws assigned African-Americans to second-class citizenship and where dogs and water cannons were put on those who fought against this, Obama's victory will no doubt be a catalyst for further inroads against racism.

This will be seen as a victory not only for African-Americans, but also Latinos, Asians and Americans of other races who have been shut out of power throughout the long racist history of American capitalism. Today workers from Mexico and Latin America are being arrested, their families split up, in racist immigration raids.

For African-Americans, the election of Obama could have a huge galvanizing effect. The New York Times describes a 55 year-old African-American janitor who registered to vote for the first time a month ago. "This is huge. This is bigger than life itself. When I was coming up, I always thought they put in who they wanted to put in. I didn't think my vote mattered. But I don't think that anymore." (11/2/08)

David A. Bositis, senior political analyst at the Joint Center for Political and Economic Studies in Washington stated: "It's not just a question of Obama as the first black nominee; it's also that African-Americans have suffered substantially under the Bush years and African-Americans have been the single most anti-Iraq-war group in the population." (NYT 11/2/08)

Obama's election could be a spark that helps ignite a new movement to fight for better conditions among African-Americans. However, any such movement would rapidly find itself in opposition to the big-business agenda Obama will inevitably pursue. While Obama will likely pursue limited measures to address the impact of the deepening economic crisis on working people, resolving the mass poverty and unemployment in the black community will require a colossal public works program, funded by heavy taxes on big business, something Obama has shown little inclination towards.

Economic anger

The dominant issue which emerged in this election was the economy. The war in Iraq was a crucial backdrop to this at the beginning of the election process and will remain a running sore. After two decades of wage stagnation, leaving families to work more hours and more jobs to get by, working-class people have seen a real fall in their living standards in the last few years. The Bush administration's blatant pro-business rhetoric and its outrageous handouts to corporate friends caused a large target to be painted on the back of any Republican candidate. The economic meltdown in October sealed their fate. In October 2008 an astonishing 85% of Americans said the country is on the wrong track.

Attempts by Republican candidate McCain to redefine the dominant issue of this election totally failed. Similarly, their attempt to paint Obama as a friend of terrorists, a Muslim, culturally 'different' (code for racism) and finally as a socialist, failed to affect most voters. The tried and trusted Rovian method of blatant misrepresentations, which they used to bury Democratic Party candidates in 2000 and 2004, failed to stick with a more politicized and attentive attitude among the voting mass. Interestingly, the attempt to define Obama as a 'wealth re-distributor 'actually helped expose how unequal America has become due in part to the Republican-initiated tax cuts for the rich, while stimulating a national discussion on "socialism."

The ability of Obama to present himself as the agent of change has been decisive amongst an electorate desperately looking for an end to the disastrous consequences of a Republican-dominated agenda in Washington. What Obama has managed to conceal is how similar his policies are to those policies.

In a demonstration of how far this electoral system is from a democratic system, those candidates who could have offered a fundamental alternative to these polices were shut out of the debate. In particular, Ralph Nader was barred systematically form the media and from the debates. Cynthia McKinney, candidate for the Green Party, was also excluded. By offering a $10-an-hour minimum wage, ending the for-profit health care system that plagues the majority of Americans' lives, ending the war, and exposing the corporate funding that defines the policies of the two major candidates, well-known consumer activist Ralph Nader would have transformed the debate by shining a bright light on Obama's refusal to move beyond a promise of change.

Under these conditions, Nader's vote was squeezed to less than 1%. Despite this, the 2008 Nader campaign's ability to achieve ballot status in 45 states and to raise $4 million demonstrated the potential for building a national electoral challenge in years ahead.

Republican meltdown

Astoundingly, it was left to the right-wing Republicans and Sarah Palin to use the term "working class," and attempt to explicitly tap the class anger in U.S. society. Palin looked to appeal to the deep alienation working-class Americans feel toward the political system. However, the majority of voters understood this was just another trick by Republicans to confuse voters. The spectacle of Palin firing up the right-wing base, and effectively running her own political campaign, merely exposed ever further the fissures in the Republican Party, the gulf between old Corporate Republican leaders like McCain and the alternative agenda of the right wing.

The opposition and ridicule Palin inspired among the broader voting public shows how diminished the far right has become. Defections from the GOP have increased as Bush's economic policies were felt by millions of "red-state" workers. The situation was epitomized in a photograph depicting a homemade sign with the Confederate flag and the words: "Rednecks for Obama. Even we've had enough."

One can expect to see a fierce battle for the soul of the Republican Party in the coming months and years, as these two wings wage a battle for domination of the party. Their problems are worsened because candidates representing the traditional big-business wing of the party lost more seats in the House and Senate than the far-right wing. Now the ideology of the party is increasingly dominated by what The Economist describes as "southern-fried moralism."

Obama's agenda

Lacking from most post-election analysis was the crucial role played by big business in the election. With their money, their control of the media, and their political influence, the U.S. financial elite helped elect Barack Obama. Confident that an Obama White House will not defy them or shake things up too much, Corporate America opened their wallets to his campaign. Despite his carefully scripted comments about not receiving donations from corporate lobbyists, Obama's candidacy has received far more corporate dollars than McCain's (opensecrets.org).

Of course this does not discount the significance of donations made by historic numbers of working-class Americans to Obama's campaign. However, it will not be ordinary working-class people who will be sitting in his cabinet, or advising him on policy issues. It will be the same Wall Street and corporate executives and established pro-imperialist foreign advisors who have been in the cabinet of the US presidents for the last 120 years. They will be the ones driving Obama's domestic and foreign policy.

Here lies the contradiction in Obama's victory. Obama has managed to speak to Americans of all incomes, including the very rich and the poor. He has received money from regular workers and from corporate CEO's. He has promised to govern one America. However, we don't live in one America. We live in two Americas. One that has grown fabulously rich, and another that is taking it on the chin, with working people scraping by, working unstable jobs, just a layoff away from losing their homes or apartments. One America for the billionaires and another for the rest of us.

During the election, this contradiction could be papered over. However, once he starts governing, Obama will be forced to decide between the two classes.

On Wednesday Obama announced his transition team, with the conservative chairman of the Democratic Caucus Rahm Emanuel as his Chief of Staff. Emanuel emerged as a major power-broker in Washington after he engineered the Democrats 2006 election victory, which saw the strengthening of the so-called "Blue Dog" conservative Democrats. In several cases, Emanuel used his control of Democratic Party money to engineer the defeat of more liberal Democrats in the primaries, even where these candidates were more competitive than their favored conservative rivals.

Clinton's former chief of staff, Leon Panetta, was reportedly the main architect for Obama's transition plan, which has been crafted over months. Discussing how Obama will address the severe economic problems, Panetta advised, "You better damn well do the tough stuff up front, because if you think you can delay the tough decisions and tiptoe past the graveyard, you're in for a lot of trouble... Make the decisions that involve pain and sacrifice up front." (NYT, 11/5/08)

A long honeymoon?

Given the massive budget deficits, which is running at 6% of GDP federally and forcing emergency measures in state governments, Obama's ability to enact serious reforms to relieve working-class people will be limited. The relatively minor new taxes he is proposing on the wealthy will not change the equation substantially, given the overall fall in tax revenue as the recession bites.

Nonetheless, Obama has reportedly been discussing with congressional leaders about a "possible $100 billion for public works, unemployment benefits, winter heating assistance, food stamps and aid to cities and states that could be passed during a lame-duck session the week of Nov. 17." (NYT, 11/5/08) Even from the standpoint of big business, such limited proposals may prove necessary to prevent a further economic collapse and a more complete discrediting of capitalism. However, such measures will at best slow but not reverse the catastrophic declines in living standards that are already underway in working-class communities.

Furthermore, as he did with the $700 billion bailout in September, Obama has indicated support for further taxpayer handouts to the financial elite and big business. The big three auto-makers, who faced catastrophic declines in their sales last month, are faced with the near-term prospect of bankruptcy unless the federal government comes to their aid. Such aid, however, will not reverse the waves of layoffs and wage and benefit cuts facing autoworkers.

It remains to be seen how rapidly or fully Obama will move to implement his various other campaign promises, from health-care tax credits to closing Guantánamo Bay. In Iraq, Obama's pledge to draw down troops will be complicated by the failure of the Iraqi government to formally agree to a continued U.S. troop presence, and the renewed tensions between the Sunnis, Kurds, and governing Shia. In Afghanistan, the situation is unraveling fast with many warning that Obama's plan for a troop surge there will only provoke further conflict.

Nevertheless, even limited reforms by an Obama White House will contrast sharply with Bush's reign, and could give Obama a certain honeymoon period. Democrats' call for patience in the face of the economic crisis, which they have blamed completely on Bush, will get an echo for a period.

However, the experience of the 2006 elections must be remembered, when the Democrats swept into power in Congress on promises to end the war and hold Bush accountable. Their failure to do either provoked rapid and sharp outrage among a more politicized minority of workers and youth. Cindy Sheehan, who broke with the Democrats in the summer of 2007, represented a small but important tendency. With expectations so high, Obama will undoubtedly eventually disappoint millions in office, and a radical minority will open to far-reaching conclusions about the need for a political alternative.

Millions of young people, people of color and ordinary workers have had their confidence raised. Many will be inspired to step forward into political activity as a result of this election. Many of them will see the need to mobilize campaigns and protests in an attempt to keep Obama's attention on those who elected him. Others will be forced into struggle to defend themselves against the cutbacks and attacks resulting from this recession. The wave of political awakening which Obama rode to power was not the creation of his campaign, and the radicalization of the U.S. working class won't stop with the end of this campaign - just the opposite, in fact!

Movements that develop will inevitably come into sharp conflict with an Obama administration. Events will expose Obama, and Congressional leaders as representatives of big business. As a result the way will be prepared, for a new political and class awakening in U.S. society. Consciousness of the need to break with the Democratic Party will grow. More than ever, the question of building a political voice for working people will emerge onto the political agenda. The idea of a new anti-corporate, antiwar political party, a party of working people, will gain traction in the minds of millions, as ordinary people struggle to find a path toward genuine change, a way out of the economic and social crisis engulfing U.S. society.

Ty Moore and Tony Wilsdon, Socialist Alternative (CWI USA)

November 6, 2008

US: BARACK OBAMA – COULD HE DELIVER ?

If Obama Wins - Looking beyond the hope bubble

Americans have a decision to make on November 4, when the US presidential election is to be held. Evidently, Barack Obama's candidature and campaign for the presidential seat has become a global phenomenon, not just in America and Europe but also in the Middle East, Asia and Africa. It is not only because of his multi-racial background that Obama appeals to millions across the world, but also because his claim of giving hope resonates in the minds of Americans who are seeking a change from the 8 year-long economic deprivation wrought by the neo-liberal policies of the Republican Bush presidency.

In the Middle East, millions hope an Obama victory would signify a change in US foreign policy in Iraq, Afghanistan, Iran etc. Africans especially, see America as a second home, with its large population of African diaspora, meaning that the socio-economic wellbeing of the US is of prime importance to the millions of African families who have relations pursuing the 'American dream'. As Dr. Reuben Abati put it in his "Obama and the Tom Bradley effect" (The Guardian, Sunday October 26, 2008, pg 70), the Obama craze has infected Nigeria to such an extent that the "National Assembly almost passed a resolution endorsing Barack Obama for US president" while cars, motorcycles, barbers' salons and pepper soup joints are adorned with Obama-for-President stickers. This is a testimony to the phenomenal support which Barack Obama enjoys around the world, even from those who are not going to vote in the Nov. 4 elections.

But the twist is that though millions of working and middle class Americans have so much hope in Obama, the rich in America, Europe and Asia, bankers, stock brokers and big corporations are also looking to him for a way out of the current global financial meltdown which was triggered by the gambling of US fat cats, the consequences of which will be deep, drawn-out and devastating. Thus, Barack Obama can be said to be in the eye of the storm, comparable to the Biblical Jesus whom average Americans look to for salvation from mounting debts, foreclosures, job losses, unemployment and poverty, but who the greedy fat cats also look to, to save the capitalist system. Don't forget that as well as the donations of average Americans and youths to the Obama campaign, records show that big corporations and banks have donated the most, thus making the Obama campaign the most expensive in the history of US.

In the countdown to the November poll, some world media organisations such as the Washington Post, the New York Times and some of our own Nigerian media organizations and journalists, like Dr. Reuben Abati have all endorsed Barack Obama's candidature thus effectively making the Nov. 4 polls seem a mere ritual, as his victory seems already assured.

The aim of this article is to examine what many Obama advocates have refrained from examining: can the conflicting hopes of rich and poor working and middle class Americans vested in Obama be genuinely fulfilled? A careful look at the economic and political policies of Barack Obama and John McCain is therefore necessary.

'Joe the Plumber'

And where better to start than with the famous plight of 'Joe the Plumber', who had challenged Barack Obama's taxation policies as a threat to the 'American dream'. The American dream is the alleged, much touted ability of Americans, irrespective of social or economic background to climb the social ladder. This much touted 'American dream' was reinforced by the welfare policies of the US state in the 50s to 70s, influenced by the need to develop society after the ravages of the 1929 Great Depression and the Second World War. Thus we had the 'New Deal' of Franklin Roosevelt and the post-Second World War 'Marshal Plan'. This entailed massive state intervention and investment in housing, education, health etc which led to improvements in the standard of living.

However, with the restoration of naked neo-liberalism since the end of the 70s (from Ronald Reagan till now), the 'American dream' has become illusory. Since 1979, the share of income of the richest 1% has doubled, leaving the US with the greatest inequality among all developed nations. The richest 10% of the adult population possess 69.8% of the country's wealth. The result is a middle class hardly distinguishable from the working class. Millions (blacks, Latinos and whites etc) who had hitherto enjoyed some improved standard of living have now been thrown onto the garbage heap, as a result of the unbridled, profit-driven economic policies of the past three decades. It is these millions, angry and shocked at the horrific plummeting of their living standards that McCain and Obama are scrambling desperately to win in this election.

This explains the popularity of the 'Joe the Plumber' scenario in this election and McCain's effort (while offering nothing better) to discredit Obama's tax policies. Despite the efforts of Kennedy Emetulu in his article 'Joe the phantom plumber' (The Guardian, Sunday October 2008, P. 16) to play it down, this issue remains a sore point. In truth, McCain's tax policy pampers the rich but Barack's too equally toadies after the corporations who are funding his campaign, while offering peanuts to small businesses. Of course, millions of Americans facing foreclosures and job losses would welcome the tax relief promised by Obama, but this cannot fundamentally improve living standards in the immediate and further future.

Occupation of Iraq

Another issue of concern in the current election campaign is the US occupation of Iraq, which has cost tax payers billions of dollars and is bound to cost more blood and money if troops are not immediately withdrawn. Unfortunately, neither Obama or McCain have promised to immediately withdraw troops. All Obama has promised is phased withdrawal within 16 months. What this means is that Obama will only completely withdraw all US combat forces when the puppet Iraqi government proves it can police the country on its own. And as this will never happen in time, Obama's presidency may be bogged down by Iraq as much as Bush's. Recall that as an Illinois Senator, Obama once voted for funding for the prosecution of the Iraq war which is ultimately being waged for the profits of capitalists and their corporations. If Obama wins therefore, we should not expect immediate withdrawal from Iraq (although, at some time the US will eventually be compelled to withdraw, especially if the resistance within Iraq intensifies), especially as his government will also be faced with the need to restore the hurt confidence, integrity and pride of the US as the world policeman.

Therefore in all respects, both Obama and McCain are essentially the same, the difference being that where the former plays to the gallery by inflating a bubble of hope which will soon burst in a flurry of disillusionment, the latter bogged down by his identification with the hated Bush regime, has less room to manoeuvre and thus sticks to conservative Republican trash with a conceited air of indifference. Little wonder that fat cats and campaign financiers have jumped over to Obama. Thus, the Republican party is cash-strapped while the Democrats swim in an ocean of funds. But this is a 'subprime' bubble which is bound to burst soon. Unfortunately, it is on the heads of the American working and middle classes that this bubble will burst, especially when an Obama presidency defends the greed of the capitalists against working people.

Lack a real choice

In this election, average working class and middle class Americans lack a real choice precisely because there is as yet no genuine third political party in US which offers a credible alternative to the Republicans and Democrats. Thus, the task facing poor and working people in US and in fact all over the world is the need for the trade unions and pro-masses organizations to build a mass working class party with socialist policies of public ownership of the commanding heights of the economy under democratic management of the working people as against the capitalist policies of the official parties, which defend the interests of the rich few. If such a working class party were to be present in the current US elections, the current hope which millions of average Americans have misplaced on Obama would have been correctly placed on such a party - a party funded and democratically controlled by poor and working Americans and not the Democrat or Republican parties being funded and controlled by the rich.

Poor Americans need a President and party that will truly guarantee a permanent and improved standard of living. Poor Americans need a President that will boldly announce immediate withdrawal of troops from Iraq, in order to allow the Iraqi people to democratically determine their destiny and not this fuzzy hope that Obama preaches. Poor Americans need a government that can guarantee employment with decent pay, free and quality education and healthcare, quality and affordable housing, care for the environment, gay and lesbian rights, rights of abortion and genuine world peace by ending wars fought in the commercial interests of US capital.

But how can they possibly get this under an Obama presidency which merely wants to tax the rich a bit more? The current global financial meltdown, triggered by banks and subprime mortgages in the US has already proved that the current casino economy is not viable and the fact that even if eventually the world recovers from this crisis without a revolutionary movement of working people to take over the reins of society, the greed of the capitalists will, for as long as capitalism lasts, continue to drag humanity through a giddy cycle of boom and burst.

Reuben Abati in his article mentioned above said, "The crisis on Wall Street is a clear, measurable confirmation of Obama's message that America needs to be fixed". Then, why can't Obama promise to go further than the miserable George Bush by nationalizing not just failed banks, but all banks, mortgage providers, insurances and financial firms under the democratic control of workers, while paying compensation to small shareholders on the basis of proven need and guaranteeing the safety of depositors' savings? This would save the jobs of millions who will be rendered jobless under the current pro-rich package of Bush. If nationalized banks are then integrated with public ownership of all the commanding heights of the US economy with democratic management of committees of workers, experts, government and community representatives, it would then be possible to halt the dangerous slide into recession, re-energize the US economy and guarantee permanent, decent living standards for all. This would ensure the bail-out of the whole of society, rather than the nationalisation of failed banks carried out in Britain, US, France, Japan, Russia etc which only amount to compensating a few capitalist gamblers for their loss while millions face job losses. If Obama promised this, wouldn't it be a clearer and more measurable confirmation of his message that America needs to be fixed?

Free market advocators

But as expected, both Obama and McCain avoid bailing out the whole of society. When the Bush regime was forced to swallow its free market vomit in shame, by taking over the running of Fannie Mae and Freddie Mac (both failed Mortgage providers), the Democrats hurled the insult of 'socialism for the rich' with glee. But when McCain used 'Joe the Plumber' to paint Barack Obama as nearing socialism by his tax policies which aimed to 'distribute wealth', the Democrats shrieked in horror.

With anger, Kennedy Elumelu writes, "They are trying to say he's a socialist or Marxist who is itching to take away your riches and give them to those vermin on the streets. They are telling you he's going to punish industry and entrepreneurship and ruin your proud and beautiful edifices of individualism, hard work and honest earnings". Note the word 'vermin', which clearly denotes the average poor American made homeless and jobless by industry, entrepreneurship and the capitalist brand of hard work and honest earnings, which consists of drunken gambling on the stock exchange while those who produce the wealth slave 10 hrs a day in poor conditions, with peanuts as take-home pay and forever threatened by job losses whenever the chicken of capitalist gambling comes home to roost. The' vermin' are the American working class on whose back American civilization and industry was built.

And to assure the capitalist class that Obama is for them and will continue to be for them, Kennedy Elumelu says further, "Obama on his part must continue to let Americans know that he has in his team of advisers some of the richest, most credible and most accomplished Americans alive and that these people are joining and seriously supporting him because they know he isn't going socialist'. Surely, only the richest are allowed on Obama's team of advisers. Surely the 'vermin' have no place in the Democratic or Republican parties just as they will have no say when eventually either Obama or McCain wins.

Socialism for the majority

Who is afraid of socialism, we ask? Surely not the poor working American people seeking a way out of the economic crisis wrought by capitalism. Only the capitalists are afraid, because socialism means the wealth of the society will be redistributed to all members of that society according to the amount of work done while taking care of the young, the old, the sick, the infirm or disabled through a system of collective social security comprising of free education at all levels, free health services, extensive transportation system, housing etc. Contrary to the Soviet Union which degenerated into Stalinism (a bureaucratic totalitarianism totally alien to socialism), socialism also means the guaranteeing of democratic rights of all, including the right of people to self determination, rights to practice the religion of your choice, right to free speech and assembly, no discrimination against women etc.

Despite the abuse piled on him by capitalist commentators, many economists when analysing the current global financial meltdown have had cause to admit that Old Karl Marx was right after all. Despite it being the only way to save humanity from the current madness of global financial crisis, boom and bust, poverty amidst plenty etc, if Obama says or does anything close to socialism, Washington Post, New York Times and the fat cats pouring dollars into his campaign will run berserk and you can bet that the Democrats' campaign funds will dry up, while McCain becomes their preferred choice overnight. That is why every effort is being made to counter McCain's claims by saying that Obama does not wish to 'redistribute wealth' but 'spread wealth'. Who doesn't know the difference which is that the former will bail out the whole society while the latter will bail out a few failed banks and corporations?

Have you wondered why Barack Obama is running the most expensive campaign while McCain and the ruling Republican Party are cash starved few days to election? It is because majority sections of the capitalist class are supporting Obama because they see him as the only man who can direct the anger of millions of poor Americans at the economic situation into a huge bubble of illusion and hope thus ensuring that this anger does not lead to a social revolution. Capitalists have throughout history distinguished themselves as capable of jumping on any life boat in order to preserve their rule and they have no shame now in abandoning their old friend, George Bush and his Republicans for a boyish Illinois Senator little known couple of years ago. As Colin Powell's defection demonstrated, all is for the safety of the system and it is hoped that old McCain will understand. Dr. Reuben Abati was right when he ended his above mentioned article thus, "The first and the continuing task for an Obama Presidency, in the event of victory, will be the hubris of high expectations". If Obama does not win, a few years from now, myth will have it that he had the best policy to preside over America at a most trying time but was not given a chance because he was black. If Obama wins, eventually events and experience will show that "high expectations" are not being met.If Obama wins, eventually, events and experience will show that "high expectations" are not being met. At that time, far more will think seriously about the need to build a third alternative party that stands for the real interests of working people and in which arguments for socialism can gain an audience.

Taiwo Hassan Soweto, Democratic Socialist Movement (CWI in Nigeria)

31 october 2008

WORLD RELATION: THE ‘US EMPIRE’ AFTER BUSH

What will US foreign policy be after the election?

The two terms of George W Bush have been characterised by the ongoing wars in Afghanistan and Iraq, the brutality of Guantánamo Bay and ever increasing inequality in US society. Now, he is presiding over a deepening global recession. With the Democrat candidate, Barak Obama, clear favourite to win the race to the White House, what will this new situation mean for US foreign policy?

The US Presidential election campaign has opened a new chapter for US imperialism. The overwhelming opposition to the policies of the Bush regime and the onset of a deep and serious recession has seen a mass demand for 'change'. Massive enthusiasm and high expectations have been aroused, especially among young people and Afro-Americans in the Democratic candidate, Barak Obama. At the time of writing, he is clearly ahead in polls and is the most likely victor. The enthusiasm and hopes of what his presidency will mean goes beyond the USA. In poll after poll in Europe, Latin America, Asia and Africa, Obama is by far the favoured candidate.

While the outcome of the election to the Congress and scale of the Democrat majority, especially in the House of Representatives, will be important factors in determining what Obama actually does in some spheres of US intervention, one thing is clear: Obama is coming to power in an entirely different world situation than when Bush and the neo-cons took power in 2000. The question of US foreign policy in the post-Bush era is being posed sharply.

When Bush and the neo-cons seized power, they unleashed the economic and military might of the only real super-power which remained following the collapse of the former Stalinist Soviet Union in 1989-90. The 'empire', as Venezuelan president Hugo Chávez dubbed it, tried to impose its massive military and economic power internationally. The invasion of Iraq, stepping up the intervention in Afghanistan, Plan Colombia, and others were the reality of the 'unipolar' world of the neo-cons. The catastrophes which have been rained down on the peoples of the world through these and other interventions, while demonstrating the power of US imperialism, have also demonstrated the limitations of that power. While a powerful 'empire' has been constructed, it is not like the Roman empire in its ascendancy. It has more in common with the period of decline of Rome.

The disasters that have followed the neo-con reign have revealed the fact that US imperialism, although it remains the largest economic and military power, is a historically waning power. The entry of emerging capitalist China onto the world arena poses a new challenge to it economically and militarily. Russia has also played a more assertive role than in the immediate period following the collapse of the former Soviet Union. It has sought to establish its own sphere of influence which has brought it into conflict with the European Union states and US imperialism.

These conflicts between the main blocs of the US, EU, China, Japan and Russia represent a change in international inter-imperialist relations compared with the period following the collapse of the former Soviet Union and Eastern Europe. Such conflicts and clashes of interests are set to increase with the onset of a global recession. It is this trend, and the relative waning power of US imperialism, together with the legacy of the crisis left behind by the neo-con intervention in Iraq, Afghanistan, the Middle East and Asia, that will shape US foreign policy in the coming years.

Despite its reduced power, however, US imperialism remains by far the largest power. This is reflected in its military budget which stood at $547 billion in 2007, compared to $59 billion for China and $36.7 billion for Russia. China's defence bill is estimated on current trends to rise to $360 billion by 2020. Yet it is unlikely that it will be able to achieve this and surpass the US given the onset of a deep, prolonged world recession which will have devastating consequences economically and socially in China.

Russia has benefited from the oil bonanza in recent years which has been partly used to retool and re-equip its military. The fall in world oil prices which is taking place inevitably will have devastating consequences and cut across its recent economic and military expansion. It remains a shadow of the power of the former Soviet Union. The fact that the US remains the largest imperialist power will compel it to intervene where necessary, albeit from a weakened position.

A waning power

However, the changed international background and the crises which have engulfed the neo-cons, together with the waning power of US imperialism, will mean that the new presidency will not be a mere 'Bush mark II' – even in the event of a victory for John McCain which, at the time of writing, seems unlikely. These new features will force the new incumbent of the White House to adopt a more 'multipolar' policy which is more 'consensual'. The ideology of 'liberal imperialist intervention' is set to dominate the new administration. Even in the end game of the Bush presidency, the old unipolar doctrine of the neo-cons has been largely abandoned. The fact that the Bush regime was compelled to negotiate with North Korea, has failed, so far, to back an attack on Iran, and could not intervene in the Russia/Georgia crisis reflect this. The Georgian president, Mikhail Saakashvili, was advised by Condoleezza Rice, US secretary of state, not to attack South Ossetia. However, the Georgian government felt confident enough to go ahead, encouraged by some dissident voices in Washington who gave a 'nod and a wink'. However, this intervention and Russia's response illustrate the weakened position US imperialism finds itself in.

The current economic crisis also illustrates the change that has taken place since Bush arrived in the Oval office. That the main imperialist powers in the G7 were compelled to come together and agree a strategy to deal with the crisis reflected this. However, this does not mean that the US and other capitalist powers will not revert to breaking ranks and adopting protectionist or interventionist measures if they decide it is their own interests to do so. They will also adopt a similar approach towards foreign policy in their own spheres of interest if they are able to.

The waning power of US imperialism has been revealed by the abandonment of the neo-liberal, non-state intervention ideology which has dominated world politics for the last 25 years as the imperialist powers reacted to try and avert a catastrophe. Generally in the post-1945 era, US imperialism tried to impose its position and use its economic might on international economic policy. For example, it led the way in laying down the Bretton Woods agreement following the second world war. Significantly, it has been trailing the EU countries in agreeing to bank bail-out packages and the partial nationalisation of the banking system.

Throughout the neo-colonial world, as well as in Europe, hostility towards the USA as a consequence of Bush's policies has increased dramatically. Bush will leave the White House with the international authority and credibility of the US at record low levels. The devastating failure of the US intervention in Iraq and Afghanistan, and now the abandonment of neo-liberal policies when faced with the potential collapse of the world finance system, have encouraged the masses in Asia, Africa and Latin America. Having suffered the brutal consequences of the neo-con economic and foreign policy, the evident failure of them has boosted the morale of the masses in these continents as they see the imperialist powers plunge into crisis and Bush exposed as a 'dead duck' president.

High hopes in Obama

At the same time, there are undoubtedly high expectations and illusions about what an Obama presidency will usher in. In Europe, Obama is overwhelmingly the favoured candidate. The hope that a new Democratic presidency, especially a black president, will adopt far more radical, improved, 'humane' policies is overwhelmingly the view in Latin America, Africa and Asia.

Although Obama will be compelled to adopt a 'multipolar', 'consensual' foreign policy, the crucial issue is what it will mean in practice for the masses on these continents. Such a change in policy will be done to try and more effectively defend the interests of US imperialism and capitalism in decline. The shift is being forced onto US imperialism as the limits of its powers have been revealed in the military and social catastrophes which have unfolded in the Middle East and Asia. In Latin America, the failure, until now, to remove Chávez in Venezuela, or defeat Evo Morales in Bolivia, represents a further setback and may result in a possible change of policy by the new US administration. The clear failure of US policy in Cuba, which has strengthened Castro's regime, combined with the steps towards capitalist restoration by Raúl Castro, have also increased the pressure and demand for an alternative policy to be adopted there.

It is not the first time that such hopes have existed in what a new 'radical' Democratic presidency would mean. Indeed, it is possible that this is more pronounced in the neo-colonial world, at this stage, following the experience of two terms of George W Bush. However, there were also big expectations after the election of Bill Clinton, following the administrations of Ronald Reagan and George Bush senior. However, it should not be forgotten that the more 'consensual' approach from Clinton did not prevent US military intervention in Serbia or Somalia. Neither will Obama refrain from military intervention where it is judged to be in the interests of US imperialism and where it has the military capacity to do so.

As Obama put it: "We can neither retreat from the world nor try to bully it into submission. We must lead the world, by deed and by example..." Yet the masses of the world do not want to be led by US imperialism. If they cannot be convinced "by deed and by example", Obama continued, "We must also become better prepared to put boots on the ground in order to take on foes that fight asymmetrical and highly adaptive campaigns on a global scale". (Foreign Affairs, July/August 2007) In the same article, he went on to call for the expansion of US ground forces by adding 65,000 soldiers to the army and 27,000 to the marines. The National Guard, he urged, should have sufficient funding to "regain a state of readiness".

The ongoing crisis in the Middle East, especially Iraq and Iran, together with the worsening situation in Pakistan and Afghanistan, will be at the centre of US foreign policy in the coming months and years. Bogged down in the Iraq quagmire, Obama has supported the withdrawal of US combat troops. However, the prospect of a full withdrawal is not a likely perspective due to the conflicts and divisions which have been opened up following the invasion of Iraq and the overthrow of Saddam Hussein's dictatorship. Despite the recent claims of some commentators that the troop 'surge' has allowed US imperialism to stabalise the situation and reduce levels of violence, the situation remains extremely volatile with the prospect of an upsurge in ethnic clashes between Sunni and Shia peoples. At the same time, new conflicts have recently opened up. The outgoing commander of US troops, general David Petraeus, warned: The US still faces a long struggle in Iraq and recent security gains are not irreversible". This is despite an apparent drop in sectarian violence and the number of US casualties. The US army is currently losing more troops in Afghanistan than Iraq.

While the Shia-led government, headed by prime minister Nouri al-Maliki, has strengthened its position, underlying tensions and conflicts remain which could erupt at any time. The government has pledged to integrate up to 20,000 armed Sunni fighters and take over the Sunni Awakening Councils, in which the US paid Sunni fighters to turn against the insurgency. Despite Maliki's pledge, there are already signs that his regime is orchestrating a campaign to harass and intimidate many of them. Moreover, up to 100,000 Sunni fighters had been paid for by the US. The recent arrests of Sunni leaders have led to increased Shia-Sunni tensions and a spate of bombings. Fear of a reignited Sunni-Shia conflict was what lay behind Bush's recent withdrawal of 8,000 troops – a lower number and at a slower rate than many commentators were anticipating.

In addition to these tensions, Maliki's decision to send Iraqi troops into the mostly Kurdish town of Khanaquin – ostensibly as part of a broader military operation against al-Qaida forces – has inflamed the Kurds who saw it as a power play by Maliki and the Iraqi government. This intervention has made any prospect of a negotiated settlement over the status of oil-rich Kirkuk even more improbable.

The possibility of these conflicts erupting is further heightened by the world economic recession and the consequences it will have on Iraq and throughout the Middle East, especially with the fall in oil prices. Against this background, the prospect of the break-up of Iraq, or at least its fragmentation into a series of patchwork divisions of the Shia, Sunni, Kurdish and other peoples, is what the US and other imperialist powers are likely to confront in the near future. While a reduction of US troops from the current level of 140,000 is likely if the new occupant of the White House decides to escalate the offensive in Afghanistan, it will leave a series of heavily fortified garrisons in Iraq to protect US interests, especially the oilfields.

Downward spiral in Afghanistan

Obama's objective of scaling down military intervention in Iraq while stepping it up in Afghanistan, and Pakistan if necessary, rather than strengthening imperialism in the region, is certain to become as big a disaster as Iraq, and probably worse. Even before a major reduction of US forces in Iraq, the Pentagon has planned to boost the number of troops in Afghanistan from 33,000 to 47,000 because of the clear failure of the intervention. Far from stabilising the situation, a renewed offensive will boost Taliban resistance even further. During 2008, the US has lost more troops in Afghanistan than at any time since the occupation began in 2001. All 16 US spy agencies agreed in a recent report by the National Intelligence Estimation (NIE) Afghanistan, the publication of which has been postponed until after the presidential election, that the US and NATO forces faced a "downward spiral".

Overwhelming hostility to the US and NATO troops has given the insurgents greater support and sympathy. This has been re-enforced by the sea of corruption and nepotism which the government of Hamid Karzai is swimming in and by a collapse in security. With reports of local people having to go to the Taliban to receive 'justice' against crooks and thieves, because they cannot get it from the official state apparatus, the Karzai regime is rapidly loosening any confidence or legitimacy it may have had among big sections of the population. A desperate situation exists with a surge in violence and lack of security in Kabul and other cities. Rodric Braithwaite quoted Afghan journalists, former Mujahideen professionals: "They were contemptuous of president Hamid Karzai, whom they compared to Shah Shujah, the British puppet installed during the first Afghan war. Most preferred Mohammad Najibullah, the last communist president. Things were better under the Soviets. Kabul was secure, women were employed, the Soviets built factories, roads, schools and hospitals… Even the Taliban were not so bad: they were good Muslims, kept order…" (Financial Times, 16 October 2008)

With warlords switching sides to the highest bidder, and with over 50% of national income coming from the booming opium trade, the British writer, Max Hastings, commented that, "the highest aspiration" must be for a "controlled warlordism". (Guardian, 13 October 2008) Stepping up the military offensive will only result in a greater disaster which will drag US and NATO forces deeper and deeper into the swamp that is further destabalising the already explosive situation in neighbouring Pakistan.

Tensions between the US & Pakistan

The rotten Perves Musharraf was finally removed from power, much to the irritation of US imperialism which had rested on his regime as its main ally in the region in the 'war on terror'. For nine years, US imperialism backed his regime, lavishing it with an estimated $11 billion aid in return for its support. This policy of Musharraf, who was a quisling of US imperialism, served to undermine his support. Pakistan, awash with grinding poverty, corruption and national oppression, has evolved into a virtual failed state. Pakistan is on the edge of an implosion and even a possible break-up as a consequence of the economic and social disintegration which is taking place. Many staple food prices have rocketed by 100% in a few months. Power supplies are frequently interrupted, causing devastation for the masses and crippling businesses which cannot function. The NIE concludes that Pakistan is "on the edge". A US diplomat said that Pakistan has "no money, no energy and no government". (Guardian, 17 October 2008) The new coalition government, headed by Asif Ali Zadari – renowned for corruption and known as 'Mr 10%' because of the bribes he has been accused of accepting – threatens to be short lived.

The border regions with Afghanistan, North and South Warizistan, overwhelmingly made up of Pashtoons, and the North West Frontier Province (NWFP) have become the main base for Taliban and other insurgent forces which operate in Afghanistan. Warizistan has become what one diplomat described as a "terrorism supermarket", where Taliban forces arm, train and launch attacks into Afghanistan. In North and South Warizistan, the white pennants of the Tehrik-i-Taliban Pakistan, a local Islamist force, fly from government buildings. The capital of NWFP, Peshawar, was virtually encircled by its armed militias. In addition, an explosive situation exists in Baluchistan. When the murderous bombings that rock Karachi and the armed gangs and warlords which operate in the rural Sind are added to this, the scale of the disaster facing the peoples of Pakistan cannot be overstated.

The opposition to US imperialism among the masses in NWFP and North and South Warizistan has fuelled the growth of Taliban and other insurgent forces in these areas. The Pakistani security services, ISI, and sections of the army are riddled with sympathisers of the insurgents who oppose collaborating with the US and its 'war on terror'.

It is against this background that Bush has authorised the use of special operations units and incursions from Afghanistan into Pakistan. Admiral Mike Mullen, speaking to Congress on behalf of the chiefs of staff, along with defence secretary, Robert Gates, urged that these be stepped up. This strategy has been backed by Obama and the Democrats: "I will join with our allies in insisting – not simply requesting – that Pakistan crack down on the Taliban, pursue Osama bin Laden and his lieutenants, and end its relationship with all terrorist groups". (Foreign Affairs, July/August 2007)

This has raised tensions between the US and Pakistan's new prime minister, Zadari. These incursions recently resulted in the Pakistani army opening fire on US forces. The dangers of US military operations on Pakistani territory were clearly spelt out in an article by lieutenant general Shahid Aziz, a former chief of staff under Musharraf. He accused Musharraf of "Inviting the Americans to fight their war on Pakistani territory, without consulting the army… Militants will multiply by the thousands. The Pakistani army will not be able to support US operations. Financial crisis and street unrest will create chaos in the country and the war will spread". (Guardian, 16 September 2008) This policy is backed by Obama who raised the question of using US troops in Pakistan prior to Bush authorising recent incursions. The recent clashes have opened a deep rift in Zadari's government. One coalition partner, Jamiat-Ulama-i-Islam, has even proposed that the Taliban address the parliament following a report being presented by the military.

A combination of the Afghan crisis and events in Pakistan threaten a nightmare for US imperialism and will have horrific consequences for the people of the entire area. Obama's policy of putting more 'boots on the ground' will only fan the flames of the insurgency and make an explosive situation even more unstable.

An arc of crisis

To the crisis engulfing Pakistan, Afghanistan and Iraq must be added Iran which, together, embroil US and western imperialism in an 'arc of crisis" spanning the entire area. When the plight of the Palestinian peoples is added, along with the prospects of the overthrow of the pro-western regime of Hosni Mubarak in Egypt, as well as a series of upheavals throughout the Gulf and the Middle East, the scale of the problems facing US and western imperialism in this area alone are immense. Now, they are facing them from a weakened position.

There has been much speculation about the prospects of an attack on Iranian nuclear sites. The consequences of such a military strike would be to set the whole of the Middle East in flames. Moreover, the Iranian regime would certainly retaliate by blockading the Straits of Hormuz, thereby cutting off the lion's share of oil supplies to the west. The consequences of such an attack, and the effort and resources being poured into Iraq and Afghanistan, have so far deterred the Bush regime from supporting such a strike despite intense pressure from Israel. The Israeli regime is determined to avert Iran developing a nuclear weapons programme and undertook a series of military manoeuvres to demonstrate its capacity to launch such an attack, although it would probably need assistance from the US to carry it out. Moreover, even Bush has been prepared to modify his stance, taking steps to establish low level diplomatic openings. These, however, have now been put on hold until after the presidential elections.

While Bush and his regime have so far been checked from unleashing a bombing raid, although not probable, it cannot be excluded that Israel could act unilaterally, at a certain stage. Social crisis in Israel can drive the Israeli ruling class to use this as a means of 'rebuilding national unity' against a common enemy. On the other hand, the threat of such a strike has been used by the Iranian regime to try and bolster its own support. Faced with such pressure, it is possible that Obama would apply his 'consensual' foreign policy and open up negotiations, either openly or behind the scenes. Yet, as he has warned, this will be backed up by the application of even tougher sanctions against Iran, the price of which will be paid for by the Iranian people.

A new era

However, in Latin America, it is possible that Obama will adopt a different approach to the neo-cons, especially in relation to Cuba and, possibly, Venezuela and Bolivia. This reflects the failure of US policy towards Cuba since the revolution in 1959 and the attempts by Raúl Castro to move towards capitalist restoration together with a more open attitude by a second and third generation of Cubans and Latinos in Florida and other US states. As part of the process, it is possible that the trade sanctions will be eased. Some commentators have speculated that this could be done in return for 'free elections' at some point in the future with no specified date. However, the onset of world recession will complicate further the process of full capitalist restoration in Cuba.

It is not excluded that Obama may make some overtures to both Morales and Chávez, both of whose governments will face increased pressure and turmoil as a consequence of the fall in oil and other commodity prices. At the same time, the determination of the right-wing in these countries to remove both governments and the prospect of even greater social explosions by the masses demanding more radical anti-capitalist policies than have so far been introduced, could easily derail Obama's hope to 'reopen a dialogue' with these governments. Moreover, the prospect of even greater upheavals in other Latin American countries, such as Brazil, Mexico and Argentina, is certain to open up new conflicts with US imperialism as more radical, combative social movements emerge that can pressurise new governments to take even more radical measures that bring them into collision with US imperialism.

US imperialism is the only major imperialist power with a border directly with a neo-colonial country – Mexico. The Mexican government has been prepared to adopt pro-capitalist policies and collaborate with US imperialism. How long it can continue to do this is another question which will confront Obama. With 80% of Mexican exports destined for the US and $25 billion sent back every year by Mexicans working in the US, the developing recession is already having devastating consequences. The prospect of major social and class upheavals in Mexico will have important repercussions within the US itself.

The new inter-imperialist relations which are developing will open a new era, with growing tensions between the main blocs and within them, as has recently been shown in the EU during the economic crisis. The idea that is being propagated of a new Bretton Woods agreement does not correspond to the new realities which exist for global capitalism. The Bretton Woods agreement was undertaken when US imperialism was the clearly dominant world power. The existence of an alternative social system, the former Stalinist regimes in the Soviet Union and Eastern Europe, with planned economies ruled by bureaucratic dictatorships, provided a 'glue' which bound the other imperialist and capitalist countries together. With the collapse of these regimes no such glue exists today and the resources available to world capitalism in a period of deep recession are very different to those which existed following the second world war when an upturn of capitalism was taking place.

While temporary agreements are possible between the various imperialist powers, these will not offer a return to the relative stability which followed the Bretton Woods agreement. The bloody carnage in the Middle East, Asia, Africa and the Caucasus cannot be resolved under capitalism and imperialism. Despite its weakened position, the US, as the largest imperialist power, will be compelled to intervene in some of these crises. The prospect of increased conflict and war is what the new era of capitalism and imperialism will mean – until the working class and others exploited by capitalism replace it with socialism, the only way to resolve the conflicts and horrors that are the product of imperialist intervention and capitalism.

Tony Saunois, CWI London

31 October 2008

ECONOMY: KEYNESIANISM NOW TRUMPETED

"EVERY DAY this week there will be a picture of misery for the UK economy" said Citigroup economist Michael Saunders at the start of last week. The grim pictures are in the form of rising unemployment, falling retail sales, reduced business confidence, falling house prices, and many other symptoms of recession. Over 60,000 homeowners a month are now falling into negative equity.

Stock market share values recovered partially, after nosediving due to fear of a complete financial meltdown. But following the huge bank bail outs, which were designed to prevent a 'worst case' scenario, economic forecasts remain bleak and there is a general realisation that the recession could be long and severe.

U-turn has come after U-turn. First came bank nationalisations by the leading proponents of neo-liberalism. Now these same privatisers and worshippers of the market are singing the praises of Keynesian measures - the spending of public money on services, infrastructure etc to try to stimulate the economy.

Gordon Brown, chancellor Alistair Darling, and new business secretary Peter Mandelson, are chorusing that future expenditure on schools, hospitals and large infrastructure projects should be brought forward. Darling even went so far as to say: "Much of what Keynes wrote still makes sense. You will see us switching our spending priorities to areas that make a difference".

Their expediently-adopted guru, John Maynard Keynes, advocated increased state borrowing in times of recession, to pump-prime the economy. But while feeling compelled to accept the need for this, it is extremely problematic for the government to implement, as the national debt is escalating. It has gone up to around 50% of national income following the latest bank bail outs, and is estimated by the Centre for Policy Studies to be 103% of GDP if all the public sector pension liabilities, Private Finance Initiative contracts and Northern Rock liabilities are included.

This record debt level was built up during a long period of economic growth, because successive governments cut taxes for big business and the rich, and spent huge sums on weapons and wars. Going into a severe recession with such a debt level is a massive burden. Even without decisions in favour of additional spending, the state debt will increase as a result of lower tax receipts and higher unemployment benefits. So, at present, rather than promising new money, the government is trying to limit itself to 'bringing forward' future spending. This is being combined with some insufficient special measures, like funding more Housing Association housing and buying thousands of newly built houses for councils to rent out.

Also, the increased spending on some types of public services and needs is likely to be combined with cuts in others. The treasury has already clawed back over £5 billion of unspent NHS funding, to spend in other areas, and the NHS management board is presently waiting for further funding cuts and raids.

Nevertheless, such is the seriousness of the overall economic crisis and prognosis, that further Keynesian type measures are likely - some of which could be new departures compared to those taken in the past, and could be much further reaching than those announced so far. But the resulting increase in the public debt ultimately has to paid for, either through increased taxes on big business and the rich, or increased taxes on working class and middle class people, or through the government printing more money - which would fuel inflation.

The Socialist calls for a massive programme of public works, to satisfy people's needs for housing, schools etc, and to provide jobs. But this should not be paid for by ordinary people suffering increased taxes or price rises. The capitalist class however would howl with rage at being asked to pay through their taxes and would take measures to avoid this; which shows the need for the major companies to be taken out of their hands, and placed in public ownership.

Keynes also advocated lowering interest rates during a recession, and this is now the expected direction. Larry Elliot commented in the Guardian: "Although inflation currently stands at 5.2%, it is going to fall like a stone over the coming months... the impact of this on monetary policy is obvious. Rates will be cut, and cut aggressively, in an attempt to shock the economy back into life". But 'attempt' is the right word, as low interest rates are no panacea - they are only useful if the banks actually pass the lower rates on to borrowers and if people feel in a position to borrow money.

Greed and blame

THE EFFECTS of the uncontrolled speculation that has been carried out by finance industry chiefs, backed up by most of the leading western politicians, is being brought down on the heads of many millions of people. A thin layer of super wealthy 'investors' on the globe have enriched themselves hugely, not through any useful development of production or society, but through financial gimmicks involving fictitious capital.

Gordon Brown and David Cameron not so long ago were singing the praises of these parasites who have contributed greatly to the misery now being inflicted on ordinary people. Brown worshipped their "unique innovative skills", their "ingenuity and aspiration" and the "invaluable contribution...to the prosperity of Britain". Cameron declared: "Our hugely sophisticated financial markets match funds with ideas better than ever before".

Last year, Barclays president, Bob Diamond, received total pay and bonuses totalling a staggering £36 million. Since the onset of the banking crisis, the top bankers and chief executives of most of the major companies are continuing to pay themselves indefensible salaries and bonuses; this year alone, the pay of FTSE 100 chief executives has gone up by 11.5% on average.

Ordinary working-class and middle-class people are furious about the greed and catastrophic management of the leading financiers. A FT/Harris poll found that most people are blaming the bankers for the economic crisis. But substantial minorities - as high as 30% in Germany - are blaming the failure of capitalism itself. They are right to do so. The bankers have indulged in huge excesses, making the credit crunch much worse than it would otherwise have been. But capitalism is a system that will always have cycles of boom and slump, as Karl Marx explained over 150 years ago. He also explained that it is a class based system that develops its own gravediggers - the working class - who have the common interest and potential power to build a socialist alternative.

Socialist Party of England and Wales (CWI BRITAIN)
23/10/2008