Socialist Resistance

Women’s abortion rights under attack

Emergency protest— as MPs vote on women’s abortion rights

Tuesday 20 May, 5.30pm

Old Palace Yard, outside Parliament — opposite St. Stephen’s Entrance

Tube: Westminster

Defend 24 Weeks
No reduction in abortion time limit

On Tuesday 20 May, members of parliament will debate and vote on the anti-abortion amendments to the Human Embryology and Fertilisation Bill. The key amendments aim to lower the time limit for abortion. This vote is taking place much earlier than expected and with very little notice. In the limited time available, it is vital that everyone who supports a woman’s right to choose does everything they can to show their opposition to any reduction in the time limit. Please attend this crucial protest — and encourage your trade union, women’s group, student union or other organisation to send a presence.

If you can’t get to London - find out if Abortion rights is doing
anything in your area before or on the day of the lobby and get
involved.

We say: women must come first

There is no significant scientific or medical support for any
reduction in the time limit. Yet a handful of anti-abortionists are
using downright propaganda and misinformation, hoping to intimidate and mislead MPs into attacking women’s rights. An overwhelming majority of the public supports the right to choose: MPs should uphold choice and vote down amendments by Nadine Dorries and any anti-abortion MPs.

Less than two per cent of abortions take place after 20 weeks. If
successful, a lowering of the abortion time limit would be devastating for a small number of women in difficult, unforeseeable and individual circumstances and would encourage further anti-abortion attacks.

Contrary to anti-abortion hype, research shows there has been no
increase in survival rates for births under 24 weeks. There is
opposition to any lowering of the time limit from the British Medical
Association, Royal College of Obstetricians and Gynaecologists, British Association of Perinatal Medicine, Royal College of Nursing, TUC and national trade unions, the Department of Health and MPs across all three major parliamentary political parties.

If you haven’t already, now is the time to write to, email, phone or visit your MP in advance of the vote on 20th May to urge them to vote against any amendment to lower the abortion
time limit. It is also important to urge them to be in the House of
Commons (unless they are not on the side of a woman’s right to choose) because May 20th will be a free vote so the main political parties will not demand people are there.
A model letter and information on how to identify and contact your MP is available on the campaign website

www.abortionrights.org.uk.

If you are not already a member of Abortion Rights then please
sign up now - go to www.abortionrights.org.uk.

In the context of a national swing to the right and in the aftermath of a recent split which has drained time, energy and resources, the Birmingham local election results can be counted as reasonably successful. Respect has survived.

Within that overall positive framework there is cause for celebration and some disappointment. The victory in Sparkbrook saw the share of the vote increase slightly. It gives Respect all three councillors and provides a springboard for future gains in that area. It is the result of hard work by the two incumbent councillors in maintaining a presence throughout the year, delivering improvements for local residents and campaigning for real needs such as more school places. This was allied to the continuing resonance of Respect’s name and Salma Yaqoob’s high profile. In the end it all delivered a thumping 43% of the vote. As has been pointed out elsewhere, this was delivered despite diverting resources out of Sparkbrook to help in other areas, notably Springfield.

Springfield was worked very hard last year, but was a big casualty of the split. Work stopped and the dynamic ceased. To add to the problems, a boundary change brought in more unfavourable areas. This year the gauntlet was picked up by Salma Iqbal, who led a very positive campaign which drew in many new helpers, including from out of Birmingham. In a six week period of intense work, the damage was repaired, so that in the end the vote dropped marginally from 26% to 25%, but was essentially maintained. The leaflets featured local, all-Birmingham and international issues, combining attacks on Britain’s war –mongering abroad with supporting local residents’ opposition to the “red route”. Full support was given to the local Council workers’ dispute over equal pay.

The feedback on the doorstep was positive and encouraging and towards the end, the window posters started going up again. Such was the feeling as we went around; we must be honest and admit some of us thought Salma could win it. In that sense there is of course disappointment. Yet, Salma deserves a big vote of thanks for her tireless efforts. Without the abuse of the postal vote system, by New Labour in particular, she could have come very close.
Mushtaq again, almost single-handedly, led the campaign in Nechells. Yet with scarce resources he came second on 19%, only a slight drop on last year.

Abdul Aziz managed 20% in Aston, a drop from 28% last year. Socialist Resistance supporters who worked for him reported that he suffered from a lack of resources; there was more support out there for Respect than he could physically tap into. More focussed and detailed literature would have helped.

The bigger disappointment was in Kings Heath. This was another casualty of the split. The work in the area collapsed in the previous period, the Muslim vote was not mobilised this time and despite a well organised, well run campaign, where the candidate made an impressive mark at the hustings, for example, the damage had been done. There was also more of a leftist Labour opponent to contend with. On a positive note, new activists in that area have come forwards and there is now the project of building a new branch and starting some serious local work. A vote of 5% is the baseline for future development.

During the campaign there was a very successful rally in the town centre, combining local council workers, teachers and other public sector workers. The several thousand strong rally and demonstration was leafleted by Respect giving its full support to the strikes.

So, Respect’s vital foothold in the city has been maintained. It now has the responsibility and opportunity to move outwards and become more of an all-Birmingham organisation.

The unending attacks on Muslims, Council workers, the unemployed and other oppressed layers will need countering. The big challenge of the next General election also awaits.

On the electoral level there is life outside of Respect in Birmingham, but not a great deal of it. The Greens went up from 14% to 16% in their one targeted ward of Bournville. The Socialist Labour Party went down slightly in Handsworth Wood to 13% from 15% and Raghib Ahsan managed 11% in Lozells and East Handsworth, down from 20% last year.

The Tories gained six more seats and so the ruling Tory - Liberal Democratic coalition will remain in power. The BNP vote either fell slightly or was maintained.

The task of building a political alternative to the neo-liberal mainstream and the far right is as urgent as ever. That is the task of Respect. Socialist Resistance will play its part in helping make it happen.

Extracted from Corriente Alterna

Alex and Yoann (JCR Paris-Nanterre)

French youth continue to show their potential for mobilising against education reforms. This time it is the turn of high school students, who, during the last weeks, have been on the streets against the suppression of teachers’ jobs in high schools.

Everything started with the Sarkozy government’s announcement of the elimination of 11,200 high school teacher jobs during the next year. In doing so, they have gone one step further in their policy of frontal attacks on education rights and of reducing public expenditure. Consequences will include the elimination of optional subjects (arts, Latin, foreign languages) and increases in student-teacher ratios and in teachers’ working hours.

The first to mobilise were the teachers. On 18 March, responding to the call of the SNES, FO, Sud and CGT unions, thousands of teachers went on strike and demonstrated in Paris. There were around 2,000 on the demo, accompanied by 3,000 high school students who gave the first sign that a mass youth movement was rising again.

Since then, the dynamic of the teachers’ struggle has been overtaken by that of the students, who have started organising themselves and taking the initiative. Methods of action reflect the experience acquired by French youth during the recent strikes: blocks and strike pickets, speeches during the lessons in order to interrupt them and to be able to mobilise for massive demonstrations in Paris.

In contrast to the other movements, this time it is the high school students in the most working-class areas that have taken the initiative and have formed the majority of the demonstrators. In this way, massive demonstrations and the capacity of organization of the French students’ movement have begun to converge with the combativity and radicalisation of the youth from the Paris suburbs.

From these beginnings, the movement has spread like wildfire. First in Paris, where hundreds of high schools have gone on strike spontaneously, overwhelming all political organizations and trade unions. But not only in high schools: the movement has reached dozens of middle schools (11 to 15 years), which have also blocked lessons and have massively mobilised for demonstrations. These demonstrations have brought together up to 50,000 people in Paris twice a week.

But the movement is not only in Paris. In Toulouse, Lyon and Grenoble, the mobilization has also achieved a historically unprecedented scope. On 18 April students in Paris started their holidays which are two weeks long. It is therefore the turn of high schools in the provinces, which are coming back from holidays now. And they have got started quickly. On 22 April, 15,000 students demonstrated in Tours, 2,500 in Toulon, 500 in Lille and 3,000 in Strasbourg. These actions will give a push to the movement in Paris when the holidays finish there.

To achieve this level of activity, it is also essential that the movement organises itself and adopts democratic structures. Coordination is beginning between the high schools that are in struggle, with the first national meeting taking place in April and the next one on 3 May.

6 May is the key date: the teachers’ unions are thinking of calling a General Strike on education, and FO (Force Ouvriere – Workers’ Force) is even thinking of the possibility of calling an inter-sectoral strike.

Update: Teachers’ Unions FERC-CGT, SGEN-CFDT, UNSA-EDUCATION, SUD EDUCATION have called a strike on 15 May. May promises to be a month of action.

The New Labour project is falling apart at the seams. Its local elections results were the worst in 40 years, with only 24% of the vote and coming third behind the Liberal Democrats. This is a disastrous result for Brown. In London, the election of Boris Johnson as Mayor and the presence of a BNP member on the Greater London Assembly will disturb and depress all who value the multi-cultural diversity of the city.

The most immediate catalyst for the collapse of the Labour vote was the abolition of the 10% income tax rate (i.e. Labour attacking a large part of its core base), but looming large behind that is the economic crisis ­ the credit crunch, rising fuel and food prices set against continuing low wages for a big section of society. Added to this was Brown’s inability to spin the New Labour project in the way Blair could do it. All of this raises the prospect of a further electoral disaster in the European elections in 2009 followed by a drubbing in the general election of 2010 and the possible election of a Tory Government.

Against this background what are the prospects and possibilities for building a left-wing alternative to New Labour’s neo-liberal policies. What is the terrain and what can be achieved?

Firstly, nothing in the general political situation has fundamentally changed since the launching of Respect in 2004. Large numbers of traditional Labour voters remain alienated, disillusioned and demoralised by the right-wing policies of New Labour. Some seek solutions in a “change” and vote for the Tories. Many more abstain, casting a plague on both parties.

Such is the nature of party politics in Britain today, and the media coverage, that the rivalry between the main parties has become one of
presentation and personalities. Ideological differences have been left far behind as all the establishment parties support neo-liberalism to the hilt. Differences are miniscule, reflected by petty point scoring. In these circumstances voters can cast a vote for the opposition in order to register their dissatisfaction without, in fact, registering a vote for any fundamentally different policies.

At the same time, there is widespread anger at rising prices and the budget attacks on the poorest. There is opposition to privatisation and a fear about the future of the health service and education. The war and occupation of Iraq and Afghanistan, although receding as an issue, remains of concern for millions.

Of course, not everything flows in the same direction. Fears about crime and the issue of immigration are factors used by the press and politicians to drum up support for right-wing views. In general, however, disillusioned working-class voters and the progressively minded sections of the middle class will not swing to the Tories. Some may be tempted by the social liberalism of the Liberal Democrats but most will withhold their votes unless and until they see a serious, viable, alternative. When the threat arises of a Tory win most of these will vote once again for New Labour with heavy heart and holding their noses whilst doing so. This was a significant feature of the Livingstone vote in the London Mayoral election. Such an attitude will be played upon by the right-wing trade union leaders to argue against “rocking the boat”, arguing that New Labour has to be supported to keep out the Tories.

In these circumstances, there are possibilities for building a left-wing alternative to New Labour but it will not be easy or swift. We may not like where we are starting from but every journey has to start from where you are.

The first point to register about the performance of the left parties in the recent elections is that they confirm that there is the basis of support for such a project. Although the experience was very limited, with only a few handfuls of good results outside of London, the results demonstrate that where consistent and patient work has been invested, support can be obtained for left-wing candidates.

Respect’s results confirm this. In Birmingham Sparkbrook, Respect’s Nahim Ullah Khan won 3,032 (42.64%) and became Respect’s third councillor in the ward. Elsewhere in Birmingham, Respect polled 25% in Springfield, 17% in Nechells and just under 5% in Moseley and Kings Heath. These are extremely significant results. They indicate the possibilities of obtaining very good votes in elections and demonstrate that it is possible to win. They augur well for Respect’s prospects in the city at the general election.

In Manchester’s Cheetham Hill ward Kay Phillips polled 14.4% following an energetic campaign that built serious links with the local communities. In Moss Side Respect polled 5.8% and in Wigan 6.7%. In Bradford Manningham ward Respect won 7.5% and in Walsall 7.6%. Of course, these are very few wards contested but are small indications of what can be obtained in the first instance if there were forces to contest more widely.

A few of the results for the Left List also demonstrated the same potential for the left. They received a very good 37% and 25% in Preston and Sheffield respectively to 12% and 10% in Manchester. It is worth mentioning that the result in Preston and Sheffield are the products of work over a long period of time with a commitment from the core activists to the building of a broad electoral left alternative; a completely different approach from that of the SWP leadership.

In London the most impressive result was the vote for Hanif Abdulmuhit in the City and East constituency. Here, Respect came third, polling 26,760 votes (14.59%), an increase of 7,085(36%) against the background of a polarisation of the vote between Labour and Conservatives. This was a tremendous vote, beating the BNP and consolidating Respect’s position in its east London stronghold.

Across London Respect’s vote did not fare so well. Respect did not stand any candidate for Mayor or in any other constituency apart from City and East.

Respect polled 59,721 (2.43%) in the London-wide list, a disappointment to the many Respect supporters who had hoped to win at least one seat on the Greater London Assembly by obtaining the minimum 5% required. Notwithstanding the high profile of George Galloway this was always going to be difficult in the circumstances. However there is no doubt that the response to Respect’s campaign, albeit limited by a lack of resources and any real presence in large swathes of the capital, confirmed the potential to build outwards from the success in east London.

This was not a bad result in the circumstances. There was a massive polarisation in London around the Mayoral election which no doubt squeezed smaller parties. Perhaps more importantly, the war no longer featured to anything like the same degree as in 2004. Although Respect has a broad array of policies covering the breadth of the issues facing the electorate it is probable that most people still see Respect as the anti-war party. This needs to be addressed. What exactly is Respect and what does it stand for?

There is no doubt that the split in Respect damaged the party’s prospects, both in terms of voters seeing Respect as damaged goods and weakening the party’s ability to campaign across London.

We did not have a Mayoral candidate, which meant that we did not get an entry into the booklet which went to every household in London. Nor did we have an election broadcast.

Unfortunately, with the exception of Newham and Tower Hamlets, Southwark, and some pockets in North London and elsewhere, Respect does not exist as an active force with an organisation on the ground. This is a consequence of four years of neglect, compounded by the split last year. The lesson of last years Southall by-election demonstrated again in these elections, is that Respect cannot expect to get significant support unless it carries out regular, consistent work in an area.

Respect was not able to overcome these difficulties. It shows that Respect has to be built across the capital, with branches in every borough, if we want to become a real force in London. The vote in City and East, however, demonstrates that we can build in other areas by developing an active base carrying out regular and consistent work within the local community. Of course, our priority areas are Tower Hamlets and Newham in the east where we have to continue to build and consolidate, but no national party can be built on the basis of support limited to two or three areas.

The London results

Neither the victory for the Conservatives, nor the election of a BNP member to the London Assembly, contradict the argument that there is a need and a realistic possibility of building a left-wing alternative to New Labour. In fact, the election results demonstrate the need for such a party more than ever. The neo-liberal policies of New Labour will lead some to try out the Tories and will even drive some working-class whites into the arms of the racist and fascist BNP. A party espousing policies that benefit working-class people, rather than big business is the only way to cauterise that flow.

An election is only a snapshot of political developments and these results should not be seen as a generalised move to the right. Given the absence of any authoritative left-wing party it is not surprising that many voters plump for the Œother¹ party in the hope that things may improve marginally.

But the vast majority of traditional Labour voters still vote Labour or abstain. There is a sizable proportion of working-class voters, especially newer immigrants in low paid jobs, who no longer have any allegiance to Labour.

Notwithstanding the election of Johnson and the election of one BNP member to the GLA, the London elections show that the situation is much more complicated -than simply being a reflection of a shift to the right. Livingstone’s 1st preference vote increased by 208,336. His combined 1st and 2nd preference vote increased by 340,358. While there was massive discontent with New Labour¹s policies and with Livingstone’s own performance, the fear of Johnson winning drove Livingstone’s supporters out in massively increased numbers. Unfortunately, this increased turnout for Livingstone could not match the increased Tory turnout, which added over half a million votes to their 2004 result. Following the election of Cameron as leader the Tories have cynically repositioned themselves towards the centre ground of politics to increase their appeal particularly to a new generation which did not know Thatcherism. Alongside this the selection of Johnson as Mayoral candidate has seen a confidence returning to the Tory supporters, especially in the suburbs. Livingstone appeared jaded, grey and on the back foot in the campaign and the Tories scented a huge scalp. They turned out in force to take it. This produced a fairly narrow Tory victory for Mayor. This shows that, notwithstanding the increasingly personal nature of political contest in Britain, there was still a clear left-right contest taking place. Voters for the most part understood this. No matter the serious concerns that many on the left would have with Livingstone, it was clearly understood that Johnson had to be beaten.

Whilst the vote for Livingstone went up in the inner city areas it could not compensate for the doubling of the Tory vote in some of the suburban constituencies. The Mayoral election was overwhelmingly a class vote. There was a clear ideological aspect to the vote, fuelled by the massive attacks on Livingstone led by the Tory-supporting Evening Standard. It was understood that the multicultural nature of London and its public services were seriously at risk. Johnson’s victory will demonstrate very quickly how justified that fear was. It was a huge victory for the Tories and a defeat not only for New Labour but also for all those to its left, - particularly when taking into account that the BNP are now on the Assembly.

Part of a wider trend

New Labour’s defeat came directly out of the New Labour project itself. It is part of a wider and more fundamental picture involving the direction of social democracy at the European level. Over the last two decades European social democracy, without exception, has abandoned its traditional roots and adopted the full neo-liberal agenda. Now, one after another, these parties are suffering the backlash from this and falling into disarray. Italy is the most recent example where social democracy, after a disastrous period of coalition with a centre right Prodi administration, has collapsed and now we have a Berlusconi government and a fascist mayor of Rome. France is another example of a centre left government opening the door to the right, bringing Sarkozy to power. In Germany at an earlier stage it resulted in the election of Angela Merkel.

Right across Europe social democratic parties have moved to the centre ground and the ideological difference between them and the centre-right parties has disappeared. Politics are reduced to sound-bites and spin. In Britain, New Labour comprehensively rejected its traditional electoral base and, initially, successfully reached out to middle England - to win three elections with such support. But such support can disappear as fast as it comes. Unless governments rest on ideologically-based core support they are continually vulnerable to the latest twists and turns of the political situation or stunts pulled by their opponents.

Does this mean the end of new Labour? No. It might mean the end of this particular phase of New Labour in the sense that they are heading from office at a rate of knots. But any idea that they might draw the conclusion that the neo-liberal path has been wrong and that they should now turn back towards some kind of old Labour model is unlikely to materialise. This will become clear enough when the new policy review is published in the next week or two. They are more likely to conclude that they have not gone far enough and the way to get their voters back from the Tory Party is to embrace the market even more.

The response of the left to all this right across Europe should be clear enough. The need to build broad parties of the left, based on broad
socialist policies, designed to embrace all those looking for a political alternative could not be more sharply posed. This is not an easy project. It requires determination, élan, openness, patience and consistency. But it has to be done.

The way forwards after the election

The basis for a broad pluralist party clearly exists, despite the current divisions on the left and despite a reduced vote in the London elections. If we take the very good results in Birmingham and East London, along with some of the other results outside of London and the 3.6% won by the various left parties on the London list, there is clearly the basis for a much bigger party of the left than has been built up until now.

Respect therefore has a two-fold task in the post election situation: to consolidate the important and central bases in Birmingham and East London and start to extend outwards into other areas with the objective of establishing a national spread for the organisation.

This requires a rapid turn back from election work to party-building work through patient but energetic and lively local activity together with strengthening our national profile. We need to recruit and consolidate new members and build branches where they don’t yet exist. The structures of Respect must be strengthened. The paper should be utilised to win more supporters and sympathisers. We should begin to prepare for a conference in the early autumn which can consolidate the organisation and reach out to others.

We must renew our approach to all those people in the communities with whom we have been working during the election but also find new areas to work in.

We must reiterate our commitment to reach out to and work with all others on the left who want to build a left alternative - the young people of the environmental movement, those opposing racism and islamophobia, and local community activists. This also means approaching trade unionists and other sections of the left to argue for a regroupment broader than Respect, which can reflect the full potential available to the left and which can more adequately address the crisis of working-class representation. We should participate in initiatives like the “Convention of the left”.

Forging links with serious organisations on the left will not come easily or quickly, but we must show ourselves committed to the project of working with others to build a bigger, united left-wing party.

In the meantime, we work to build our support in an open and inclusive way.

The local and London elections have been bad for the left and for progressive voters everywhere. The backlash against the Brown government, which many now feel has betrayed them on the economic and
social fundamentals, has pushed Labour’s share of the vote below the Liberal Democrats nationally. In London, Johnson is now mayor, although the final margin after second preferences was lower than many predicted. Much worse, the BNP got a first seat on the Assembly. The Liberal Democrats also had a bad day in London, with their vote down substantially and it was a pretty mixed picture for them elsewhere.

For parties to the left of Labour, results were also generally poor with some notable exceptions, particularly but not only in Birmingham. In London the best results were posted by Respect with almost 60,000 list votes, 2.43%, but this was still below the deposit saving level and less than half what was needed to get a seat on the Assembly. The combined left vote, excluding the Greens, was only 3.61% on the list.

On the positive side for Respect, winning another seat on Birmingham council was a sharp ray of light. This now gives us all three councillors in Sparkbrook. Another good result was both the constituency and list votes in East London, which clearly show we have built on our vote after a long period of internal difficulties. The constituency vote for Hanif Abdulmuhit increased by almost 7,000 from the 2004 result. The local roots Respect has established in East London checked the forward march of the BNP. Without Respect East London could have begun to look like the 1970s with the BNP pushing into third place. Instead, Respect is one of the two major parties along with Labour in parts of Tower Hamlets and Newham, we beat the BNP on the list vote and pushed the Liberal Democrats into fifth place.

There was clearly a massive turnout in some parts of the Tory suburbs, a vote with some pretty nasty racist overtones following a campaign of vilification against Livingstone and his support for ethnic minority communities in general and the Muslim community in particular.

There is little for the left to be celebrating after these results. Many Labour voters will be rightly gutted at what has happened. There will be many battles ahead against this big shift to the right. What we need to be doing now is regrouping our forces with a determination that the resistance starts here and starts now. George Galloway, Salma Yaqoob and Respect intend to be at the heart of that resistance pursuing the approach of building a plural left opposition. We also want to give a big thank you to all the candidates and supporters who worked so hard during an election campaign which has been lots of fun.

Full list of Respect election results

London - City & East: Hanif Abdulmuhit 26,760 (14.28%)
London - list vote: 59721 (2.43%)
London - Tower Hamlets (Weavers): Dilwara Begum 637 (16.78%)
London - Tower Hamlets (Millwall): Reza Mahbob 170 (3.87%)
Manchester - Cheetham Hill: Kay Phillips 502 (14.4%)
Manchester - Moss Side: Ali Shelmanu 153 (5.8%)
Wigan - Atherton: Stephen Hall 222 (6.7%)
Birmingham - Aston: Abdul Aziz 1406 (19.6%)
Birmingham - Moseley And Kings Heath: Ray Gaston 327 (4.91%)
Birmingham - Nechells: Mushtaq Hussain 781 (17.34%)
Birmingham - Sparkbrook: Nahim Ullah Khan 3032 (42.64%) elected
Birmingham - Springfield: Salma Iqbal 1920 (24.84%)
Bradford - Manningham: Arshad Ali 395 (7.5%)
Walsall - Palfrey: Arshad Kanwar 304 (7.6%)

Our friends at Resistance Books have two new books, both from authors they have already published. The first is out now: Cuba at Sea, an account of Ron Ridenour’s time in Cuba’s merchant navy. The second, Strategies of Resistance, is a collection of Daniel Bensaid’s writings.

Both books will be on sale at the SR dayschool on broad parties on June 28.

Socialist Resistance meeting with Farooq Tariq

Pakistan after the elections

Meeting with: Farooq Tariq (Labour Party Pakistan), Jane Shallice (Stop the War Coalition Officer) , Gilbert Achcar (author The Clash of Barbarisms)

Thursday 8 May, 7.30pm, ULU, Malet Street,WC1

The World Economy and the Credit Crisis

Andy Kilmister

1. Introduction

The significance of the current turmoil in global financial markets can be seen sharply in the following quote from the article `The rescue of Bear Sterns marks liberalisation’s limit’ by the chief economic commentator of the Financial Times, Martin Wolf, in the March 26 issue of that paper. Wolf, who is no radical, writes

Remember Friday March 14 2008: it was the day the dream of global free-market capitalism died. For three decades we have moved towards market-driven financial systems. By its decision to rescue Bear Sterns, the Federal Reserve, the institution responsible for monetary policy in the US, chief protagonist of free-market capitalism, declared this era over. It showed in deeds its agreement with the remark by Joseph Ackermann, chief executive of Deutsche Bank, that “I no longer believe in the market’s self-healing power”. Deregulation has reached its limits…..even the recent past is a foreign country.

One of the most important parts of this statement is the reference to `three decades’. The current crisis has been compared to 1929. This is not really helpful as a guide to its significance. Much more useful in my view is to see what is happening as the unravelling of the set of institutional arrangements which have governed global capitalism since around the mid-1980s, which in turn emerged as a response to the breakdown of the long post-war boom a decade earlier. To understand what is happening now we need to go back to this period and to the emergence of this framework.

2. The Crisis of the 1970s and 1980s

Stable capitalist accumulation depends on two crucial conditions. Firstly, it requires the extraction of sufficient profits in the process of production. Secondly, it requires the realisation of those profits through sales on the market. This gives rise to a key contradiction – these two conditions are in conflict with one another. The successful extraction of profits depends on keeping wages down while the realisation of those profits depends on sufficient demand being available which in turn limits the ability of capital to lower wages. This conflict is a central reason for the periodic crises which characterise capitalist growth. It is worth noting here that two of the main Marxist theories of crisis result from adopting a partial view which focuses on just one side of this conflict; under-consumptionism (for example the work of the Monthly Review school in the USA) concentrates on the lack of demand which prevents realisation of profits while the profit-squeeze theory of writers like Andrew Glyn and Bob Sutcliffe focuses on rising labour costs which prevent the generation of profits in production. An adequate theory of crisis has to encompass both perspectives and to take account of the way in which capital can achieve a temporary resolution of the contradiction, which however inevitably stores up new problems for future accumulation.

The temporary resolution underlying the boom of the 1950s and 1960s depended on three main factors. First, state expenditure as a key source of additional demand. Second, the stable international economic environment provided by the `Bretton Woods’ system of fixed exchange rates which allowed for rapid growth of world trade. Third, the development of new consumer goods technologies and markets, notably in areas like the motor industry and consumer electronics (so-called `white’ goods).

For reasons which are still controversial amongst Marxists this boom broke down in the mid 1970s leading to a decade of economic turbulence and two major international recessions, in 1974-75 and 1979-82. However, from the mid-1980s onwards a new framework for accumulation began to take shape, in an unplanned and chaotic way, but embodying a measure of coherence.

3. The Temporary Resolution of this Crisis

This framework had three main components:

· The first was a massive explosion of debt – both household and (to a lesser extent) corporate debt. Debt has played a key role in mitigating the contradiction between the generation and realisation of profits, allowing for expanded demand even though wages have been kept down and a frontal assault on trade unions and organised labour has kept the working class on the defensive. However, there is an obvious contradiction here in that debt has to be repaid eventually and so the conflict between low wages and increased demand is likely to reassert itself with renewed ferocity at that point. Consequently, debt has only been able to play the role which it has because of the other two components listed below.

· The second component of accumulation has been a renewed stability in the international financial system, following on from the wild exchange rate swings of the 1970s and the first half of the 1980s which resulted from the end of the Bretton Woods arrangements. This stability has allowed for strong growth in international trade but, more importantly, has underpinned dramatic financial deregulation and increased international investment. The key factor leading to this stability has been the informal but durable relationship between the USA and China (and to a lesser extent other Asian countries) whereby the US deficit has been funded by surplus countries, who have purchased US treasury bills, allowing those surplus countries to maintain the value of the dollar and keep their own currencies low in value, which in turn has underpinned their export drive. Linked with this, and important for both the US and UK, has been a rise in the returns earned by these countries on their investments abroad, which has helped them run large balance of payments deficits without their foreign liabilities escaping out of control.

· The third factor has been two decades of exceptionally low commodity prices. This has been a key factor in allowing central banks in the industrialised world, especially in the UK and USA, to let debt increase and to lower interest rates to boost demand, without worrying too much about inflation. A number of orthodox economists (most recently Brian Henry from the National Institute of Economic and Social Research) have argued that low commodity prices have been more significant in keeping inflation down since the 1980s than either central bank economic management or labour market developments.

It is important to recognise that, owing to the unplanned and chaotic nature of capitalism, this framework did not take root globally at a single point in time, but arose in a more spontaneous way. Notably, the second most important capitalist economy, Japan, followed a trajectory of its own, as a result of the specific characteristics of Japanese capitalism in the 1970s and 1980s, and has stagnated throughout most of the last two decades (though the Japanese trade surplus and Japanese purchases of American assets have been important for the second factor listed above). Western Europe remained unstable for longer than the USA, with a sharp recession in the UK in the late 1980s and 1990s (resulting from the especially sharp crisis of capitalism in the early 1980s in this country associated with the Thatcher government’s economic policies and the consequent weakness of the British economy in the years following) and exchange rate turbulence in the early 1990s across the region (resulting from the strains caused by German unification and the effect of this on German interest rates and on the value of the Deutsche mark). However, from the mid 1990s onwards Europe participated in the general framework outlined above and this provided an important basis for two key successes for the European capitalist class during this period – the absorption of Central and Eastern Europe into the capitalist world economy and the institution of a common currency, the euro. Particular regions continued to experience crises during this period, notably Latin America, South East Asia and Russia but these were successfully localised by capital and did not bring overall global expansion to an end, although the instability of 1997-98 briefly opened up such a possibility.

It is also important to realise that each of the three factors outlined above is integrally linked with the other two in a mutually reinforcing system. The growth of debt requires a low inflation environment and international financial deregulation, which in turn requires exchange rate stability. The export boom in China and elsewhere has depended on debt fuelled demand in the US and other countries. Low commodity prices have resulted in large measure from the process of `globalisation’ and imperialist expansion which has required deregulated debt finance and stable exchange rates.

4. The Current Crisis

The depth of the current crisis for capital arises because all three of the factors listed above have been thrown into question. The build-up of debt is extremely serious in itself, partly because of the size of the debt, partly because of the way in which `securitisation’ has spread it around the system so widely and partly because the amount of bad debt is so uncertain owing to that very securitisation. However, despite the over-valuation of the housing market in the US and other countries, problems in that market on their own would not threaten the system globally were it not for the role of debt in the current pattern of capitalist accumulation more generally. What is dangerous for capital is the conjunction of major problems in the credit markets with renewed exchange rate uncertainty, especially the fall in the value of the dollar (and also a steep decline for both the US and UK in returns on foreign investments) and with what appears to be the end of the era of low commodity prices – shown most clearly by increasing prices for oil and other fuels and for food. The difficulties are shown up most clearly in the key policy weapon which capital has depended on over the last three decades, control over interest rates. The US has cut interest rates sharply to deal with the build-up of bad debt, but such cuts run the risk both of speeding up the decline of the dollar and of raising inflation (which in turn will go up in the US if the dollar falls). In the Financial Times article referred to above Martin Wolf mentions a speech by the former chief IMF economist, Kenneth Rogoff (now at Harvard). Rogoff quoted the poet Robert Frost: `Some say the world will end in fire. Some say in ice’. For Rogoff, fire here is financial ruin, ice is inflation.

5. Can Capital Resolve the Crisis?

Discussion of the possible outcomes of the crisis runs the risk of being very speculative. However, it is important for socialists to consider some of the arguments now being used by capital which indicate possible resolutions of the crisis which might be attempted. Any attempt at such a resolution will involve some kind of distribution of the costs of the crisis. Clearly capital will try to shift as many of these costs as possible on to labour and its success or failure in doing so will depend on working class resistance both nationally and internationally. Within that general framework, however, there are also likely to be divisions between different fractions of capital (financial and industrial; importers, exporters and foreign investors etc) and also potentially differences between different kinds of workers (for example between homeowners and others).

Some of the key issues that have been raised are the following:

· Demand from China and elsewhere may substitute for US demand: One possible resolution of the crisis might be a slowdown in the US and similar countries and a shift towards internal growth in China and other surplus economies, based on domestic consumption and investment rather than exports. This would clearly be possible in principle in a globally planned economy. It is much harder to achieve in the unplanned, spontaneous world of contemporary capitalism. The attempt to carry out just this kind of shift in Japan from the mid 1980s onwards was a spectacular failure. Important problems here include internal inequalities and class tensions in the Asian economies and, perhaps most importantly, the ecological constraints which are already expressing themselves in higher food and fuel prices.

· The crisis may be just a crisis of liquidity not of solvency: A number of observers argue that the credit crisis results mainly from liquidity problems and panics in the financial markets and that the amount of `genuinely’ bad debt is still quite limited. In addition corporate profits in the non-financial sector remain high. This latter point is probably the most optimistic element for capital in the current situation. However, this argument neglects the extent to which non-financial profits have been dependent on a degree of debt-based consumption which now looks unsustainable. It also neglects the fact that if inflation does become more of a problem the low interest rates of recent years may not persist much longer.

· Commodity price rises may mainly be caused by speculation: There does seem to be a strong element of speculation in recent oil and raw materials price rises (with speculators fleeing from the dollar). To the extent that such speculation unwinds capital will have more room for manoeuvre. But the seriousness of the ecological crisis and the relatively long-term nature of recent price rises seem to indicate that speculation is only playing a minor role here. Also, any attempt to base future world economic growth on increased domestic growth in China and other Asian countries is likely to cause even larger commodity price increases.

· A fall in the dollar and sterling will raise US and British exports: It has been argued that exchange rate changes will restore balance to the world economy and that already US exports are rising as the dollar falls. Again, there is some truth to this. But reliance on this mechanism is very risky for capital because of (a) the substantial losses it would involve for countries like China which have purchased US dollar assets in recent years (b) the inflationary impact of such falls on the British and American economies (c) the possibility of renewed exchange rate turbulence of the kind seen in the 1970s and 1980s and (d) the fact that even balanced growth resulting from such exchange rate changes is likely to be at a much lower level than what we have seen in recent years.

· New surplus economies may emerge as saviours of the international financial system: This relates to the growth of so-called `sovereign wealth funds’, such as those run by China, Russia and other oil and natural resource exporters. But such funds are not immune to capitalist crisis in general – many of them have already lost significant amounts of money propping up US banks in recent weeks. There are also some important political tensions involved in their investment activities abroad.

· A better structure of regulation can solve the problem: One strand of thought in recent discussions sees an improvement in the regulatory structures of capitalism as key to solving the crisis. Martin Wolf in the article quoted above is an example of this. However, this is controversial; other analysts have strongly opposed responding to the crisis through increased regulation (see for example the article in the Financial Times by John Gapper the day after Wolf’s piece). There are a number of problems. Technological change and internationalisation have made financial regulations increasingly easy for banks and other institutions to bypass. Even if effective, such regulation really only deals with the financial aspects of the crisis, not with the problems of global payments imbalances or rising inflation. In addition, the ideological difficulties of reversing, even if only partially, two decades of neo-liberal attacks on any attempts to limit market imperatives, cannot be underestimated.

All of the above means that any attempt to resolve this crisis, at least in the short-run is fraught with dangers for capital – and consequently, the crisis opens up significant opportunities for socialists.

By the Socialist Resistance Steering Committee

Gordon Brown’s ‘U-turn’ on the abolition of the 10p tax threshold still leaves millions of low-paid workers and those on benefits without any compensation for what amounts to a doubling of their income tax.

The very same day – Monday 21 April – that Gordon Brown was forced into a special meeting with Labour MPs over the decision to abolish the 10p tax rate for the poor, an unlikely source - the supermarket chain Asda (owned by Walmart) - exposed the real economic situation facing the poor.

The Asda survey found the average family is £5 a week worse off than a year ago because of inflation, and that wages have not kept up with inflation. Government figures dispute this, but that is because of the stilted way government figures are worked out.

Official inflation figures include some very expensive items that poor families are unlikely to buy. The biggest rise in inflation has been in basic necessities that the poor spend a large percentage of their income on – like food, fuel, transport and housing. For the low paid and those on benefits the official inflation figure of 2.5% is a joke. Asda reckons it’s more like 5% - at a time when the government has been exerting strong downward pressure on the pay of low-paid public sector workers.

Pay increases, and pension and benefit increases, “in line with inflation” amount to a real cut in disposable income – the poor getting poorer. It is precisely at this time that the government wants to implement the budget’s abolition of the 10p in the pound tax band for the lowest paid.

Gordon Brown’s logic for doing this is clear: they were determined in the run up to a general election to reduce the income tax rate for better off workers and sections of the self employed from 22p in the pound to 20p in the pound. This mainly affects those on incomes of between £19,000 a year and £40,000 a year. This is hardly a fortune, especially for families with children, and no socialist should want to see better off workers – and £19,000 a year is ‘better off’ in a purely comparative sense – disadvantaged.

But of course there was no way that Brown and Chancellor Alasdair Darling were going to increase the taxes of the rich and the super rich, so the worst off have to pay. This is an outrageous scandal, and would have been unbelievable in the eyes of even right-wing Labourites in the 1960s and 70s. A regressive tax reform, taking from the worst off, is a caricature of New Labour’s groveling in front of the rich, a sick joke.

Of course it is widely known that the richest people in Britain pay little or no tax. Philip Green, owner of BHS, Top Shop and many other retail businesses pays nothing – on the spurious grounds that his wife is the real owner and she lives – allegedly – more than 6 months a year in Monaco. Rupert Murdoch’s News International contrives not to pay a penny in taxes in Britain. ‘International treatments’ are always available to those will millions (or billions) in the bank.

Such are the abject depths of New Labour’s capitulation to neoliberalism that once again New Labour allows the Tories to – apparently – outflank it to the left, as David Cameron cries crocodile tears for the poor. As a consequence Labour will get an even bigger drubbing than expected in the May 1^st local elections; the way is being prepared for a gigantic Labour collapse in the forthcoming general election. Never was the time to build a left alternative more obvious.

Last weekend’s campaigning was a big success. The bus runs were the best yet and there were stalls, leafleting  and other activities in many parts of London.

We had a good involvement of groups of SR comrades on the bus on both days and other comrades doing stalls in various places. A number of comrades came into London from various parts of the South East.

This coming weekend ­- the last before the voting ­ is even more important. The bus timings are the same: 12.00 from Club Row on Saturday and 11.00 from Club Row on Sunday. We need to make the bus a big success again. Comrades from outside of London are again important in this ­ in particular Oxford, Brighton, and Southend.
Comrades coming into London from the east may wish to help with the City and East campaign - they are concentrating on street activity this weekend - stalls and leafletting. For this go to the campaign office at 11.00 Saturday and Sunday at 13 Upton Park, off Green Street, nearest tube Upton Park. For contact ring Hanif on 07921256766.

Activity during the week is also important ­ every day until May 1st. The bus will be out every day from 12.00 till 7.00. Either turn up at Club Row at 12.00 or ring Kevin on 07930 532952.
Contact local campaigns for details of local evening campaigning.