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Anti-Capitalist Meetup: Austerity, Triple Dip Recessions and Economic Crisis by NY brit expat

1:00 am in Uncategorized by Anti-Capitalist Meetup

Sitting there looking vainly at the growth, or lack of it to be more precise, of the British economy quarter by quarter following the introduction of austerity measures is a dubious use of time. So rather than sit there each quarter and discuss a dismal economy, I think the first step is to understand that we are in a world-wide economic crisis of the capitalist system. We also need to understand that the policies being introduced are actually not only extending the current crisis, but given that they are leading to increased income and wealth inequality, they will have a devastating impact upon the working classes in the countries introducing these measures. Moreover, the impact of austerity is not accident, it is being introduced specifically to create the economic contraction and the increased wealth and income inequality in the hope that private sector will take over the state sector services being undermined.

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Triple-dip recession?

We need to understand that the introduction of austerity in an economic crisis does not lead to economic growth contrary to the absurd pronouncements of Prime Minister, David Cameron. Essentially, following a slight blip caused by the Olympics, I suspect we will be witnessing rather bad news. The combination of “beggar thy neighbour” low corporate taxation (to supposedly encourage investment in Britain) and cuts to public spending, services and benefits is not leading to a reinvigoration of the economy; rather the opposite is occurring.

Quite simply, the fall in service sector activity (which accounts for 75% of British economic activity) for the first time in two years (note that it was not in great shape beforehand) means that the economy is contracting.

“The closely watched CIPS/Markit purchasing managers index (PMI) for services dropped from 50.2 to 48.9 in December, below the 50 mark that separates expansion from contraction. It is the lowest reading since April 2009 and substantially undershot analyst forecasts of a rise to 50.5 (http://www.guardian.co.uk/business/2013/jan/04/uk-service-sector-contracts-pmi).”

There are additional things that indicate future problems. The manufacturing sector is geared towards export; decreases in demand due to the introduction of austerity in the periphery in the EU are starting to be felt in Great Britain (http://www.guardian.co.uk/business/2013/jan/11/honda-cuts-800-jobs-swindon), whether this will be balanced by increased demand for luxury cars in China (http://www.bbc.co.uk/news/business-21003670) is another important question depending on the amount of trade to each area.

The collapse into administration of three high street companies [Jessops (2000 jobs at risk), HMV (4500 jobs at risk) and Blockbuster (4190 jobs at risk) will clearly add to unemployment. The fact that the internet buying is replacing these businesses means that workers who have lost jobs will not be rehired by these companies and some of these companies pay minimal taxes in Britain (e.g., Amazon).

In Britain we are seeing declining productivity because businesses use cheap labour rather than making capital investments (it makes no sense to introduce capital and increase productivity both due to labour costs being so low and no demand for increased goods and services); it also indicates that they are keeping people on irrespective of declining demand for goods:

“Figures for the economy as a whole were not much better, with a 2.4% decline in productivity over the year. The figures take the sheen off supposedly buoyant employment statistics that showed companies continuing to create jobs throughout last year.
Some companies have retained staff by forcing employees to accept pay freezes, or in some cases a cut in wages. But, as productivity declined, labour costs per unit of output rose by more than 3% over the year to October (http://www.guardian.co.uk/business/2013/jan/03/business-productivity-declines-demand-falls).”

If businesses are keeping workers on irrespective of demand for their goods and services and waiting for the economy to pick up, what will happen if the economy does not pick up? Clearly, they will sack workers if the economy contracts. Moreover, if the economy picks up, most probably, they will force an increase in productivity by using speed-up or forcing workers to work harder to raise productivity. In either case, it is not a good sign for employment possibilities for workers in the near future. Additionally, there may be some problems with the government’s argument that jobs are being created in the private sector as they seemed to have misused the employment statistics of Office of National Statistics by including as employed those in government programmes who are not being paid by employers but rather through benefits (http://www.guardian.co.uk/business/2013/jan/15/uk-jobs-soar-real?INTCMP=SRCH) which are far lower than even the woefully inadequate minimum wage that is not a living wage.

Government concentration on the supply side of the labour market, as though people are lazy and do not want to work is the reason for unemployment is more than an obvious denial of reality. It is part of a divide and rule campaign demonising the poor and disabled as scroungers rather than addressing the fact that there are no jobs. This amounts to punishing the victims of the economic system (the poor and unemployed) and those that quite simply are unable to work due to illness and chronic health conditions. Cutting benefit will not force people into work, there need to be available jobs for that to occur; it will simply increase impoverishment and misery. An estimated 200,000 children are being pushed into poverty by the government’s policy of a 1% benefit cap over the next three years, (http://www.guardian.co.uk/society/2013/jan/17/benefits-squeeze-200000-children-poverty), a statistic not being disputed by the government.
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Quite simply, the attack is hitting the most vulnerable: the disabled, single mothers, the elderly and the long-term unemployed who are already barely surviving on benefits that are meagre to say the least. The government’s argument when introducing the 1% cap on benefits that benefits should not increase faster than wages (when stagnating and decreasing wages is part of government policy and benefits are so very low) is playing off the working class and the poor against each other. In a period of deliberately created increases income and wealth inequality fuelled by the incorrect view that profits and the income of the wealthy are the basis for economic growth, it is the majority in British society that are paying for the class warfare being waged in the advanced capitalist world.

Austerity and its impact:

While leading members of the IMF claim that they underestimated the impact of the introduction of austerity and pretend to be shocked at the situation in Greece, the British government pretends that it does not understand that austerity is introduced to contract an economic system in the short run; both claims are extremely dubious to any person that has studied mainstream macroeconomic theory.

So, why is austerity being introduced and how has the government (and the Troika for that matter) got the strange idea that austerity will lead to economic growth? This relates to the impact of these measures in the long-run which attempt to remove “imbalances” between the public and private sector in favour of the later; in fact, David Cameron alludes to this when he makes the absurd argument “that the public sector cannot create growth.” However, for those that have any memory of the post-war period, we are well-aware that the public sector can create growth; it does so in three ways:

1) Hiring people in the public sector (direct government job creation) creates jobs and income for those that did not have it who then use that money to buy goods and services from the private sector;

2) The social welfare state provides additional income for those that do not have it and also provides services so that income is not spent on things provided by the government (e.g., health care), this means that there is more income to buy goods and services from the private sector;

3) The government demands goods and services from the private sector; this removes uncertainty for the private sector in terms of investment, output production, and job creation.

All of these things benefit the private sector and are part of what enable economic growth especially following a bust in the economy; both government investment and higher incomes can create economic growth. Austerity measures will not do this in the short run and it is debatable whether this will be a successful strategy for economic growth in the long-term; the increasing instability introduced by increased wealth and income inequality and lack of regulation will certainly lead to deeper and stronger fluctuations.
However, the government and large numbers of people in extra-governmental agencies (e.g., the IMF and the World Bank) believe that it is the private sector that are so-called “wealth creators” and they believe that privatisation (which enables the private sector to make profits providing these services instead of the government) and squeezing wages will enable profitability leading to economic growth. What we are seeing is that while this ideological argument may sound wonderful, reality is quite another story.
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It is necessary to understand the interrelationships between production, consumption and distribution in the context of a capitalist economic system to understand what is happening today. The capitalist system hit a point of over-accumulation in the collapse of the financial sector in 2008 and we are still in an economic crisis. While the financial sector recovered from the crisis due to bank bailouts and centralisation of surviving capital, the rest of the economy is not faring as well as an understatement.

We are seeing the result of the long-term attack on the standards of living of working people in the advanced capitalist world from the late 1970s forwards, falling rates of profits in the industrial/manufacturing sectors in the advanced capitalist world due to high wages and decent working conditions leading to MNCs shifting production to the capitalist periphery to cut both labour costs and costs of raw materials has led to the creation of persistent unemployment in the advanced capitalist world and the shift of the economies in the advanced capitalist world to dependence upon the service sector.
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Instead of shoring up the social welfare state and the state sector to keep employment and income up following the crash to enable a recovery, austerity measures have been either forced upon so-called debtor countries or introduced by right-wing governments throughout the majority of the advanced capitalist world. Bailout of the financial sectors led to both rising government deficits and rising public debt/GDP, the introduction of “austerity measures” essentially forced the majority to pay for the crisis due to deficit and debt reduction policies that they had no responsibility in creating. Shrinking the public sector, privatisation of public sector services (e.g., public health services) and selling off of nationalised companies (e.g., Greece, Spain and Italy), lowering pensions directly (e.g., Greece) and through changes in inflation indices (e.g., Great Britain), decreasing benefits, and wage and pension freezes for state workers is a direct assault on incomes. The attack on the public sector has also led to increased unemployment and the ability to introduce a wage squeeze for those still employed. While theoretically this will cut costs and raise profits, the problem arises that decreased incomes means that demand has decreased and there will be no increased investment, employment and output in the absence of demand for these goods and services.
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While this has limited effect on the export-oriented manufacturing sector, that sector will certainly be affected by the introduction of austerity in the periphery of Europe.

Who are the wealth creators?

When Cameron (and other leaders in the advanced capitalist world) describe businessmen as “wealth creators” they seem to have forgotten the contribution of labour; land lying fallow creates nothing except spontaneously, capital does nothing in and of itself … it is the direct application of human labour (in combination with land and capital) that enables the creation of wealth. In the absence of sale at a price ensuring that profits are returned, profits remain unrealised. It is the incomes of working people that enable the sale of goods and undercutting their incomes means that goods and services will remain unsold. This deliberate inversion of the reality of the capitalist system serves them ideologically, but demonstrates a lack of understanding of the interrelationship between production, consumption and distribution.

So while privatisation potentially creates an area of profitable exploitation for the private sector, the decreased incomes of the majority means that they are unable to purchase services that were formerly socialised. For those on lower incomes and those on benefits, purchase of services is far too expensive and it is women that are filling in the gap in services (e.g., child-care, caring for the sick and elderly) in their homes. Contrary to neoliberal expectations, the private sector has not jumped into fill the gap, that is, because demand is not being matched by the income to pay for these things and the private sector will not create growth in the absence of perceived increases in demand and hence profitability. That means, that all these policies will do is eliminate access to services on the part of the majority as they cannot pay for them and further increase impoverishment. The so-called wealth creators cannot create wealth without labour both in production and in consumption.
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Perhaps, they are taking their inversion of reality too seriously … without demand there is no growth, without income there is no demand, without labour there is neither production nor consumption!

The Lies of Neoliberalism; Governments Don’t Create Jobs or Economic Growth by NY Brit Expat

4:06 pm in Uncategorized by Anti-Capitalist Meetup

It may be my masochism, but I actually watched the Presidential debates. I also regularly watch the news over here in the UK. Cameron and his cronies constantly spout this argument that governments cannot create economic growth. During the Presidential debates, Mitt Romney even went a step further; he argued that governments cannot create employment. The Tory argument is a bit more sophisticated, but both arguments have their roots in the fantasies of neoliberal economics of which both the Tories and the Republicans have adopted in its most fundamental form; their arguments also tie into the perspective of reduction of the central government budgets along the lines demanded by the IMF and the introduction of austerity measures to ensure these results. Except, and this is a big exception, neither of these governments have been forced to do so by the IMF.

Given that these statements are not only historically inaccurate, but bordering on the patently absurd, it never ceases to amaze me that challenge from the mainstream media is not forthcoming. Even more so, during the debate, President Obama did not respond to the absurd statement by Romney; in fact, he also raised budget deficit reduction which essentially means cutting state employment and social services. The Labour Party does not disagree with the Tories; they only say that austerity must be done more slowly and Ed Balls (the shadow Chancellor of the Exchequer) has said at the Labour Party conference that, if elected, they had no intension of reversing the austerity measures forced upon the British populace by the Con-Dem government. Essentially, all of the mainstream parties are singing the same tune; honestly, different tonalities of the same argument do not change the fact that the underlying tune is the same.
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To someone that is living in the real world, in other words, someone that actually heard about the New Deal, that knows the role of government in ensuring economic growth during the post-war period in Europe, who knows damn well that state (or public) sector workers exist and that the government’s purchase of goods and services from the private sector and investment in the private sector help to ensure economic growth it makes me wonder if they think that we are extremely stupid.

I. Can Government create Employment?

John Harvey, a post-Keynesian economist has written an excellent piece in, of all places, Forbes Magazine which raise some of the points that I will raise here, but I will actually go a bit beyond what he has said and try to address exactly what is underlying the arguments of mainstream politicians and what is lying beneath the bizarre arguments that we are hearing these days.

Harvey correct asserts that those who claim that government cannot create employment are re-defining the meaning of the word “jobs” to suit their own private profit margins:

“But, those who say that the government cannot create employment are adding another element to the definition. To them, a job is any routine activity for which we earn income paid by an entity required to earn a profit. There is no compelling reason for this addendum and it arbitrarily excludes people like James Galbraith, who is an economist just like me, but at the University of Texas, and Jeffrey Halstead, Chief of Police in Fort Worth, Texas. By the qualified definition, they don’t have “jobs” because their income is derived from tax revenue and not private-sector sales. Ditto every single fireman, public school teacher, Marine, sailor, airman, soldier, national park ranger, defense industry employee, NASA scientist, social worker, librarian, etc., etc. None of them has a job.

Why would someone embrace such a questionable characterization? Because their true goal isn’t to generate a scientific understanding of the manner in which the macroeconomy operates, but to make a moral statement. Specifically, their contention is that only those routine activities financed by profit are truly of value. Everything the government does is unnecessary because if people really wanted it, they would have bought it in the private sector: that which is useful is profitable. Furthermore, they say, were it not for my taxes, those in the public sector would not have a job. Firemen earn a salary only because some of mine was taken away (under threat of imprisonment) (http://www.forbes.com/sites/johntharvey/2012/10/22/government-creates-jobs/).”

John Harvey makes some excellent points. This is the reason that I have cited his article. However, I would say that he is doing those advocating this perspective quite a favour in terms of saying that the view that the government cannot creates employment is a moral one. I would demur; instead, I would argue that this is an ideological position with little, or no, link to reality, much less morality. They are outright liars, not moralists. I would argue that the resurgence of this argument is not based on the idea that only things produced for profits are things of value, they know that fire services are of value; but rather that these things should be produced and provided on the basis of profitability; that is, they should be produced under the control of the private sector. In other words, why should something be produced and provided if they cannot make a profit on it?!

In fact, looking at history quite easily disproves this position; this argument is a dangerous fantasy with the lives of the majority in the advanced capitalist world at stake. Reprivatisation arguments are central planks in the neoliberal agenda and after being forced on people in the capitalist periphery and emergent economies (see, e.g., Chile and Argentina), these are now being forced on the majority in the advanced capitalist world. For example, a cursory examination of the situation before generalised nationalised fire services existed in the UK, where insurance companies provided fire services turned out to be not only too expensive but incapable of providing provision; in fact it was the insurance companies themselves that asked for national funding and provision of fire services and this was in the height of free-market ideological arguments in the nineteenth century (London Fire Brigade). Yet, if you look at right-wing arguments in the US and in the UK, there is an attempt to privatise fire services; already in the UK, parts of an holistic service are being forced to be contracted out to private companies to “cut costs” in the face of government cutbacks.

Another example that I have written about previously is water privatisation, not only are costs not reduced, but access to water is limited to those that can afford to pay for it; so something that people require in order to survive is now no longer available to them due to privatisation, some forced by the IMF and World Bank, others done in the erroneous attempt to cut costs (http://www.dailykos.com/story/2011/08/28/1011343/-Anti-Capitalist-Meet-up-Water-Privatisation); we are seeing resocialistion of water services in France and in other countries to regain control of water away from firms as it is an essential component of survival for human beings.
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The problem with private provision of services is that it is your ability to pay is what is important not the quality of the service; profitability considerations means cost cutting and that does not necessarily provide quality and guaranteed service. This is why a number of things became public goods rather than be left to markets to provide. The insistence of reprivatisation of services is not based on whether historically these can provide the most effective service; it is done so that they can literally find a new area of capitalist investment which they think has a guaranteed market. However, rather than acknowledge an obvious point that not everyone can afford to get these services if they have to purchase them directly rather than paying for them through taxation and subsidising those that cannot pay, we are seeing an argument that is based on an assumption which has been proven to be erroneous, that if something is produced there will be demand to sustain it.

In fact, this is a revival of an old argument whose demonstrable failure is what I would say is what exactly led to Great Depression and to the subsequent creation of the social welfare state and public sector back in the 1930s in the US and in the post-war period in the UK. I want to stress that the only reason that I think that this earlier argument was defeated was not due to the Great Depression on its own, but arises from the existence of a strong left and powerful union movement which led the Capitalist class to try and ameliorate the crises that are a normal part of the capitalist economic system not only to protect their own interests, but also to remove some of the threats of the left and a strong union movement.

Essentially, the argument endorsed by the right-wing of the mainstreams in the US, UK and EU is based upon a perspective that refuses to acknowledge that the private sector cannot create sufficient levels of employment to ensure that their own products are capable of being sold in the market at a price which ensures that they can earn a profit upon them. In the absence of the ability to earn a profit, these goods will not be produced. Moreover, in the absence of incomes to pay for these things, production and provision will simply not exist.
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The laws of motion of the capitalist economic system in which profitability (or expected profitability) determine the techniques of production in use (how much labour, how much and what type of machinery are used to produce output), how much output (goods and services) are produced and what type of goods and services are produced are essentially what produce economic crises. That is, crises derive from the system itself, and are not an aberration, but are a normal part of the system.

What Keynesian economic policies did was not to eliminate crises, but rather to ameliorate them; that is why people began talking about recessions rather than economic crises. But in the absence of coherent regulation and attempts to stimulate and cool down the economy when needed (as advocated by Keynes) what we are seeing is prolonged crises and smaller and shorter recoveries. Moreover, recoveries (if you have not noticed) make no dent in the substantial amount of structural unemployment that now characterises advanced capitalist economies.

II. What is causing structural unemployment?

The answer is the laws of motion of the capitalist economic system itself. Competition exists between and within industries, where money capital (and technology which is privately owned, and sometimes when appropriate to production physical capital itself) is moved between industries in search of the highest profits. The introduction of machinery in the attempt to increase productivity occurs so as to ensure that workers’ wages are produced more quickly and hence that the surplus value is greater in production are what leads to several interrelated phenomena. The reasons underlying colonialism and then imperialism was part of this process, these enabled getting hold of raw materials and cheap labour. In some cases, like the cotton textile industry, the goods could even be sold back to colonies thereby providing part of the market for the goods themselves.

Now, globalisation means that competition occurs on a world level. Lack of restrictions on capital mobility in search of profits has led to outsourcing of industries to the capitalist periphery and emergent economies where labour costs and raw materials are cheaper. The fact that you can produce something for pennies in these countries and sell them for hundreds of times more means that multinational corporations (MNCs) need to lay out far less and will make a far greater profit if the goods are sold (even if they are sold for far less than they expected, they will still be making a far greater profit than if they are produced in a country with higher costs of production). The only advantage (and this is rapidly declining) that the advanced capitalist world has is in technology (and that is the reason that the Chinese are insisting on technology transfer when they allow for foreign direct investment and MNCs into the country).

So let’s go through some of the dynamics of the system in order to understand what is happening due to the internal laws of motion of the system:

1) Introduction of machinery means that less workers are needed relatively to produce the same level of product, that is what productivity means; but the problem is not only one of relatively less workers being needed as whole sectors of production have been destroyed leading to structural unemployment, that is an absolute increase in unemployment in these countries.

2) Introduction of machinery or cheapening of costs of production (e.g., using cheaper raw materials obtained from overseas, or goods produced overseas that are cheaper to produce than in the advanced capitalist world due to both cheaper raw materials and labour costs) in the sectors that produce workers consumption goods, means that the production and reproduction of workers subsistence (the socially determined commodities that workers consume) is lowered; this lowers the value of the wage goods meaning that more time will be spent on goods that go towards the surplus product.

3) Introduction of machinery leads to increased unemployment; unemployment then weakens the bargaining power of workers. The deliberate destruction of the industrial and manufacturing sectors in the advanced capitalist world not only led to increased unemployment, it also destroyed the power of trade unions concentrated in those sectors. In fact, before the sectors themselves were weakened so badly, right to work laws led foreign automobile companies to open factories not in traditional regions but in states in the US where they did not have to deal with the demands of unions.

4) The decrease in wages due to the decline of union power and structural unemployment has led to a break-down in job protections and conditions of work. More and more, part-time and temporary low-paid work has replaced well-paying and secure jobs for life. To avoid, payment of benefits and social security (national insurance), employers have shifted towards sub-contracting jobs which places workers in greater precariousness as contracts are mostly temporary and you have no job protection. General attacks on the social welfare state have undermined the abilities of the poor and working poor to maintain their income. The attempt to stimulate demand by enabling access to easy but expensive credit has blown up in their face; witness the sub-prime crisis and personal bankruptcy as borrowers cannot pay back what they purchased.

5) While increasing the amount of surplus produced, they have seemed to have forgotten an incredibly important point. That in order for profits to exist, someone must buy their product. In the absence of demand backed by income, these potential profits only remain potential and we have what is called a realisation crisis following a point of over-accumulation (the crash in 2008); guess what, Marx was correct in Volume I of Capital.

Structural unemployment is a normal part and parcel of the system and derives from its internal laws of motion. It can be combatted, but it won’t be done if wages are continually eroded in the advanced capitalist world. Not only can we no longer survive on the low wages on offer in the capitalist periphery and emergent economies (which have been deliberately kept low), but also this would eliminate the demand for goods and services that the private sector and capitalists need to enable economic growth. The only thing that may actually keep the system going (and to increase profits in the real economy rather than the financial sectors) would be if China and other emergent economies actually increase wage incomes in their countries. In that case, essentially the workers in the advanced capitalist world become a lot more redundant to the needs of international capital.
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Rather than destroy the state sector, what is needed instead as a first step is direct government jobs creation. That is, the government itself needs to hire people at all levels. It also needs to create new sectors for them to work; the creation of a green transport industry and green manufacturing would be an excellent place to start. However, since construction is primarily a male occupation, increasing money spent on education, social services government provision of health care, nurseries (crèches) which are all traditional areas of women’s work would offer women a far better choice than the low-paid part-time and temporary work to which they are being relegated. However, no mainstream politician is advocating the only known and proven thing to get the system out of the crisis, they are all parroting the line of reduce state expenditure, cut public sector employment and cut social services and benefits.

III. The Role of Government and Economic Growth

It may be asked what does the above have to do with this argument advanced by politicians which denies that the government can create jobs and/or economic growth. The answer is quite a lot.

For all the babble about the importance of the private sector, the reality is that the government provides many things that help enable economic growth and profitability for the private sector. From government purchases from the private sector (think about how much the military industrial complex make from various government orders for its products and services); this alone eliminates uncertainty in terms of profitability and provides demand for their goods and hence leads to growth and rising employment in the private sector). Government spending and investment in housing, research and development, road building, etc. winds up in the pockets of the private sector. In fact, your tax dollars and government borrowing has been sustaining the private sector for quite some time and in fact in the post-war period it has enabled economic growth.

To quote John Harvey:

“That leaves investment and government spending as the real engines of growth […]. They are the forces that drive the business cycle rather than follow it. Businesses and the government together determine whether or not we are in rapid expansion or the depths of depression. This chart illustrates the point:
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[…] Note that this means that if there were no government sector, then the job of driving economic activity would be left to investment alone. This is similar to the situation we faced before WWII, when the government was tiny compared to the rest of the economy. The problem is, firms can build new capacity (i.e., invest) relatively quickly so that, ironically, at the very moment we have our greatest ability to produce goods and services, investment falls, layoffs occur, and we slip into recession. This is an absolutely critical point (http://www.forbes.com/sites/johntharvey/2011/04/29/why-the-private-sector-needs-the-government-to-spend-money/).”

What Harvey is demonstrating is the role of Government in creating economic growth. He argues that consumer spending follows the state of the economy, rising as the economy grows and falling as it declines. There are two things that drive economic growth, but in a recession, private investment is insufficient; it is government spending and investment that drive economic growth.

But let’s talk how government does drive economic growth. We know that this is due to government spending. But what else the government spending provides? It provides income to state workers which will buy the goods and services of the private sector. Unemployment insurance and pensions and social services (think of food stamps, welfare payments, and disability benefits) also ensure that those that would not have income due to unemployment actually can purchase goods and services. Quite obviously, those are for the most part produced by, yes, the private sector as we live in a capitalist economy.

So, given the situation, the last thing that we want to do when we are in an economic crisis in the advanced capitalist world is to cut the state sector, cut benefits and reduce wages. All you are doing in this situation is creating more unemployment and throwing people into poverty.

“In fact, Matthew Weaver of The Guardian reported, that one in five British workers are being paid less than a living wage, that is 4.82 million workers are not earning enough to survive on. This is because the designated minimum wage (£6.19/hour) is not a living wage (£8.30 in London, £7.20 in the rest of the country) and the Tories are opposing raising the wage due to fears of affecting employment.

“The study, launched in advance of next week’s Living Wage Week, found that Northern Ireland has the highest proportion of people earning below the living wage (24%), followed by Wales at 23%. The lowest proportion of sub-living wage earners are in London and the south-east, both at 16%. It found that at least 70% of cleaners, kitchen staff and waiters and waitresses were paid less than the living wage (http://www.guardian.co.uk/society/2012/oct/29/five-million-britons-living-wage?INTCMP=SRCH).”

If you want to see what happens when these policies are implemented in earnest, take a look at Greece and Spain and you are witnessing the deliberate creation of an economic depression in these countries.

“Eurostat figures show that 25.75m people in the whole European Union were unemployed in September 2012 – an increase of 169,000 people on the previous month. Compared with September 2011, unemployment has risen by 2.145m.
Spain and Greece recorded the highest unemployment rates at 25.8% and 25.1% respectively (http://www.guardian.co.uk/news/datablog/2012/oct/31/europe-unemployment-rate-by-country-eurozone).”

In terms of the general state of the economies of Spain and Greece:

“So Spain’s economy has contracted by another 0.3% for the third quarter, whilst inflation in the country continues to rise and demand continues to slump. You could be forgiven for thinking that there is no way out of this hell-hole for Spain: the contraction now means that the country has been in its ‘double-dip’ recession for five consecutive quarters, and unemployment is now running at a fresh high of 25.1%. To add insult to injury, the Spanish government thinks that the economy will shrink a total of 1.5% this year, and another 0.5% in 2013 (http://www.managementtoday.co.uk/news/1157114/Spanish-recession-deepens-Greece-riskier-investment-Syria/).”

“The [latest Greek] draft budget for 2013, which provides for measures of 9.2 billion euros, an economic contraction of 4.5 percent and a primary surplus of 0.5 percent (http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_30/10/2012_468024, my clarification).”

The message is on the wall for the UK irrespective of the blip provided by the Olympics; circuses without bread do not make for economic growth and they also make for very unhappy populations as we see in Greece and Spain.

The fact that these realities are being ignored by politicians is truly disconcerting. On November 1st, it was reported that in the UK, both manufacturing and construction industries are shrinking. In fact, manufacturing has declined for the 6th month in a row; the only thing that grew is consumer spending (http://www.bbc.co.uk/news/business-20167643). That is proof that the small economic growth we saw in the last quarter (which the Tories are claiming is due to their economic policies) is the result of the Olympics and that we can expect the UK, once again, to fall into recession. Moreover, the stress on export-led growth (another plank of neoliberal economics) for manufacturing means that the sector is far more dependent upon conditions in the world economy and hence since world recovery is not happening, export-led sectors are simply not going to grow.

“I was discussing this situation in the UK with Karl Petrick who is an economic historian and he said the following:

“I’m pretty sure that was part of their party programme. The sad thing is that anyone who is paying attention can already see the effects of an austerity budget in the UK, but that has never even registered in the news on this side of the pond. Either that or we are in some sort of odd one-upmanship: You call that a recession? I’ll show you A RECESSION!!!! The situation would be funny, if it was not so dire!”

It does not benefit the private sector either as the loss of income all around means that there are less people now able to buy what they produce. Since the private sector does not see that the possibility for investment as a great idea now due to the fact that there is not sufficient demand for their goods, they will not create new jobs. Waiting for the private sector to invest, even with all the tax breaks that various governments are giving to the corporations and to the wealthiest, is quite simply put, like waiting for climate change to fix itself, in other words, it is just not happening. In fact, the stock markets are the investment of choice, short term speculative investment is what is happening, not investment which creates jobs.

This leaves no choice but for the state sector to once again engage in direct government jobs creation … without that there is no way to combat structural employment. Moreover, given that we need far less labour (due to high productivity), the far more sensible option is also to decrease weekly working hours, but maintain income. That is, raise income of working people, not decrease it which is what we are seeing throughout the advanced capitalist world.
NHSambulanceservices

Conclusion

The re-privatisation of public goods (and it is reprivatisation as many of these services were provided privately before the existence of the state sector) represents a coup for capitalists. From reprivatisation of electrics, water, road services, they are now trying to get their hands on provision of health care in the UK, care homes, nurseries, fire services, education, and police services. The problem is that there was a reason for these public goods to be nationalised in the first place, private provision is always based first and foremost on profitability which means that if you cannot afford to purchase these things, then you will no longer be able to access them. With incomes falling all over the advanced capitalist world, that means that many of these things will no longer be part of workers’ consumption bundles. Moreover, since many of these things cannot be purchased, they will once again fall onto women as part of their household labour for which they receive no recompense.
Capitalismo
The erosion of workers standards of living in the advanced capitalist world is part of a wage squeeze trying to raise profits in a period of low profitability caused by the crisis. In periods of economic growth, wages can be allowed above social subsistence; that is what we saw in the post war period. High productivity and economic growth meant that the surplus product could be shared between workers and capitalists. Over time, the social subsistence level rose. What we are seeing now is the erosion of the social subsistence wage; they are pushing it down (so it is above physical subsistence and reproduction of the working class and they are pushing it downwards). What we are seeing is the combination of normal decreases in the value of labour power (e.g., bringing cheap goods in from overseas that are consumed by the working class) combined with a deliberate lowering of social subsistence wages, the breakdown of “jobs for life” and the rising number of people employed part-time, temporarily and as sub-contracted workers.

The problem with wage squeezes is that essentially it means that fewer and fewer working people and the high number of unemployed people (facing benefit cuts) can afford to buy things and this means that capitalists have no reason to increase production, employment, that is, to create economic growth.

What this means is that cutting the deficit, continuing cuts to the public sector, job cuts, and benefit cuts are exactly the wrong policies to deal with an economic crisis. All they do is deepen the crisis and provide no basis for recovery. Quantitative easing (increasing the money supply) has not stimulated investment which creates jobs, rather the money is being put into the financial markets for short-term speculative investment, which given the lack of regulation only increases the possibility of another financial crisis. But it is not financial crises which are the serious problem for the capitalist system at this point; rising income and wealth inequality will lead to a crisis in the real economy. With the politicians unable and unwilling to deal with the fact that capitalism is an inherently crisis-ridden system and in the absence of determination to ameliorate the problems caused by the system, the majority will be facing continued impoverisation. This represents not only a failure of capitalism which we know is incapable of providing for all, but a failure of bourgeois democracy as there is no mainstream political party that will actually stand up for the majority; all pretence that democracy applies to all is being rapidly eroded in the absence of a political party that actually speaks for and is answerable to the majority.

Anti-Capitalist Meetup: The Lies of Neoliberalism; Governments Don’t Create Jobs or Economic Growth by NY Brit Expat

4:04 pm in Uncategorized by Anti-Capitalist Meetup

It may be my masochism, but I actually watched the Presidential debates. I also regularly watch the news over here in the UK. Cameron and his cronies constantly spout this argument that governments cannot create economic growth. During the Presidential debates, Mitt Romney even went a step further; he argued that governments cannot create employment. The Tory argument is a bit more sophisticated, but both arguments have their roots in the fantasies of neoliberal economics of which both the Tories and the Republicans have adopted in its most fundamental form; their arguments also tie into the perspective of reduction of the central government budgets along the lines demanded by the IMF and the introduction of austerity measures to ensure these results. Except, and this is a big exception, neither of these governments have been forced to do so by the IMF.

Given that these statements are not only historically inaccurate, but bordering on the patently absurd, it never ceases to amaze me that challenge from the mainstream media is not forthcoming. Even more so, during the debate, President Obama did not respond to the absurd statement by Romney; in fact, he also raised budget deficit reduction which essentially means cutting state employment and social services. The Labour Party does not disagree with the Tories; they only say that austerity must be done more slowly and Ed Balls (the shadow Chancellor of the Exchequer) has said at the Labour Party conference that, if elected, they had no intension of reversing the austerity measures forced upon the British populace by the Con-Dem government. Essentially, all of the mainstream parties are singing the same tune; honestly, different tonalities of the same argument do not change the fact that the underlying tune is the same.
sheepsfightingwhowilleatthem
To someone that is living in the real world, in other words, someone that actually heard about the New Deal, that knows the role of government in ensuring economic growth during the post-war period in Europe, who knows damn well that state (or public) sector workers exist and that the government’s purchase of goods and services from the private sector and investment in the private sector help to ensure economic growth it makes me wonder if they think that we are extremely stupid.

I. Can Government create Employment?

John Harvey, a post-Keynesian economist has written an excellent piece in, of all places, Forbes Magazine which raise some of the points that I will raise here, but I will actually go a bit beyond what he has said and try to address exactly what is underlying the arguments of mainstream politicians and what is lying beneath the bizarre arguments that we are hearing these days.

Harvey correct asserts that those who claim that government cannot create employment are re-defining the meaning of the word "jobs" to suit their own private profit margins:

“But, those who say that the government cannot create employment are adding another element to the definition. To them, a job is any routine activity for which we earn income paid by an entity required to earn a profit. There is no compelling reason for this addendum and it arbitrarily excludes people like James Galbraith, who is an economist just like me, but at the University of Texas, and Jeffrey Halstead, Chief of Police in Fort Worth, Texas. By the qualified definition, they don’t have “jobs” because their income is derived from tax revenue and not private-sector sales. Ditto every single fireman, public school teacher, Marine, sailor, airman, soldier, national park ranger, defense industry employee, NASA scientist, social worker, librarian, etc., etc. None of them has a job.

Why would someone embrace such a questionable characterization? Because their true goal isn’t to generate a scientific understanding of the manner in which the macroeconomy operates, but to make a moral statement. Specifically, their contention is that only those routine activities financed by profit are truly of value. Everything the government does is unnecessary because if people really wanted it, they would have bought it in the private sector: that which is useful is profitable. Furthermore, they say, were it not for my taxes, those in the public sector would not have a job. Firemen earn a salary only because some of mine was taken away (under threat of imprisonment) (http://www.forbes.com/sites/johntharvey/2012/10/22/government-creates-jobs/).”

John Harvey makes some excellent points. This is the reason that I have cited his article. However, I would say that he is doing those advocating this perspective quite a favour in terms of saying that the view that the government cannot creates employment is a moral one. I would demur; instead, I would argue that this is an ideological position with little, or no, link to reality, much less morality. They are outright liars, not moralists. I would argue that the resurgence of this argument is not based on the idea that only things produced for profits are things of value, they know that fire services are of value; but rather that these things should be produced and provided on the basis of profitability; that is, they should be produced under the control of the private sector. In other words, why should something be produced and provided if they cannot make a profit on it?!

In fact, looking at history quite easily disproves this position; this argument is a dangerous fantasy with the lives of the majority in the advanced capitalist world at stake. Reprivatisation arguments are central planks in the neoliberal agenda and after being forced on people in the capitalist periphery and emergent economies (see, e.g., Chile and Argentina), these are now being forced on the majority in the advanced capitalist world. For example, a cursory examination of the situation before generalised nationalised fire services existed in the UK, where insurance companies provided fire services turned out to be not only too expensive but incapable of providing provision; in fact it was the insurance companies themselves that asked for national funding and provision of fire services and this was in the height of free-market ideological arguments in the nineteenth century (London Fire Brigade). Yet, if you look at right-wing arguments in the US and in the UK, there is an attempt to privatise fire services; already in the UK, parts of an holistic service are being forced to be contracted out to private companies to “cut costs” in the face of government cutbacks.

Another example that I have written about previously is water privatisation, not only are costs not reduced, but access to water is limited to those that can afford to pay for it; so something that people require in order to survive is now no longer available to them due to privatisation, some forced by the IMF and World Bank, others done in the erroneous attempt to cut costs (http://www.dailykos.com/story/2011/08/28/1011343/-Anti-Capitalist-Meet-up-Water-Privatisation); we are seeing resocialistion of water services in France and in other countries to regain control of water away from firms as it is an essential component of survival for human beings.
Halliburton
The problem with private provision of services is that it is your ability to pay is what is important not the quality of the service; profitability considerations means cost cutting and that does not necessarily provide quality and guaranteed service. This is why a number of things became public goods rather than be left to markets to provide. The insistence of reprivatisation of services is not based on whether historically these can provide the most effective service; it is done so that they can literally find a new area of capitalist investment which they think has a guaranteed market. However, rather than acknowledge an obvious point that not everyone can afford to get these services if they have to purchase them directly rather than paying for them through taxation and subsidising those that cannot pay, we are seeing an argument that is based on an assumption which has been proven to be erroneous, that if something is produced there will be demand to sustain it.

In fact, this is a revival of an old argument whose demonstrable failure is what I would say is what exactly led to Great Depression and to the subsequent creation of the social welfare state and public sector back in the 1930s in the US and in the post-war period in the UK. I want to stress that the only reason that I think that this earlier argument was defeated was not due to the Great Depression on its own, but arises from the existence of a strong left and powerful union movement which led the Capitalist class to try and ameliorate the crises that are a normal part of the capitalist economic system not only to protect their own interests, but also to remove some of the threats of the left and a strong union movement.

Essentially, the argument endorsed by the right-wing of the mainstreams in the US, UK and EU is based upon a perspective that refuses to acknowledge that the private sector cannot create sufficient levels of employment to ensure that their own products are capable of being sold in the market at a price which ensures that they can earn a profit upon them. In the absence of the ability to earn a profit, these goods will not be produced. Moreover, in the absence of incomes to pay for these things, production and provision will simply not exist.
humansacrifice
The laws of motion of the capitalist economic system in which profitability (or expected profitability) determine the techniques of production in use (how much labour, how much and what type of machinery are used to produce output), how much output (goods and services) are produced and what type of goods and services are produced are essentially what produce economic crises. That is, crises derive from the system itself, and are not an aberration, but are a normal part of the system.

What Keynesian economic policies did was not to eliminate crises, but rather to ameliorate them; that is why people began talking about recessions rather than economic crises. But in the absence of coherent regulation and attempts to stimulate and cool down the economy when needed (as advocated by Keynes) what we are seeing is prolonged crises and smaller and shorter recoveries. Moreover, recoveries (if you have not noticed) make no dent in the substantial amount of structural unemployment that now characterises advanced capitalist economies.

II. What is causing structural unemployment?

The answer is the laws of motion of the capitalist economic system itself. Competition exists between and within industries, where money capital (and technology which is privately owned, and sometimes when appropriate to production physical capital itself) is moved between industries in search of the highest profits. The introduction of machinery in the attempt to increase productivity occurs so as to ensure that workers’ wages are produced more quickly and hence that the surplus value is greater in production are what leads to several interrelated phenomena. The reasons underlying colonialism and then imperialism was part of this process, these enabled getting hold of raw materials and cheap labour. In some cases, like the cotton textile industry, the goods could even be sold back to colonies thereby providing part of the market for the goods themselves.

Now, globalisation means that competition occurs on a world level. Lack of restrictions on capital mobility in search of profits has led to outsourcing of industries to the capitalist periphery and emergent economies where labour costs and raw materials are cheaper. The fact that you can produce something for pennies in these countries and sell them for hundreds of times more means that multinational corporations (MNCs) need to lay out far less and will make a far greater profit if the goods are sold (even if they are sold for far less than they expected, they will still be making a far greater profit than if they are produced in a country with higher costs of production). The only advantage (and this is rapidly declining) that the advanced capitalist world has is in technology (and that is the reason that the Chinese are insisting on technology transfer when they allow for foreign direct investment and MNCs into the country).

So let’s go through some of the dynamics of the system in order to understand what is happening due to the internal laws of motion of the system:

1) Introduction of machinery means that less workers are needed relatively to produce the same level of product, that is what productivity means; but the problem is not only one of relatively less workers being needed as whole sectors of production have been destroyed leading to structural unemployment, that is an absolute increase in unemployment in these countries.

2) Introduction of machinery or cheapening of costs of production (e.g., using cheaper raw materials obtained from overseas, or goods produced overseas that are cheaper to produce than in the advanced capitalist world due to both cheaper raw materials and labour costs) in the sectors that produce workers consumption goods, means that the production and reproduction of workers subsistence (the socially determined commodities that workers consume) is lowered; this lowers the value of the wage goods meaning that more time will be spent on goods that go towards the surplus product.

3) Introduction of machinery leads to increased unemployment; unemployment then weakens the bargaining power of workers. The deliberate destruction of the industrial and manufacturing sectors in the advanced capitalist world not only led to increased unemployment, it also destroyed the power of trade unions concentrated in those sectors. In fact, before the sectors themselves were weakened so badly, right to work laws led foreign automobile companies to open factories not in traditional regions but in states in the US where they did not have to deal with the demands of unions.

4) The decrease in wages due to the decline of union power and structural unemployment has led to a break-down in job protections and conditions of work. More and more, part-time and temporary low-paid work has replaced well-paying and secure jobs for life. To avoid, payment of benefits and social security (national insurance), employers have shifted towards sub-contracting jobs which places workers in greater precariousness as contracts are mostly temporary and you have no job protection. General attacks on the social welfare state have undermined the abilities of the poor and working poor to maintain their income. The attempt to stimulate demand by enabling access to easy but expensive credit has blown up in their face; witness the sub-prime crisis and personal bankruptcy as borrowers cannot pay back what they purchased.

5) While increasing the amount of surplus produced, they have seemed to have forgotten an incredibly important point. That in order for profits to exist, someone must buy their product. In the absence of demand backed by income, these potential profits only remain potential and we have what is called a realisation crisis following a point of over-accumulation (the crash in 2008); guess what, Marx was correct in Volume I of Capital.

Structural unemployment is a normal part and parcel of the system and derives from its internal laws of motion. It can be combatted, but it won’t be done if wages are continually eroded in the advanced capitalist world. Not only can we no longer survive on the low wages on offer in the capitalist periphery and emergent economies (which have been deliberately kept low), but also this would eliminate the demand for goods and services that the private sector and capitalists need to enable economic growth. The only thing that may actually keep the system going (and to increase profits in the real economy rather than the financial sectors) would be if China and other emergent economies actually increase wage incomes in their countries. In that case, essentially the workers in the advanced capitalist world become a lot more redundant to the needs of international capital.
Serwotkaonaspiration
Rather than destroy the state sector, what is needed instead as a first step is direct government jobs creation. That is, the government itself needs to hire people at all levels. It also needs to create new sectors for them to work; the creation of a green transport industry and green manufacturing would be an excellent place to start. However, since construction is primarily a male occupation, increasing money spent on education, social services government provision of health care, nurseries (crèches) which are all traditional areas of women’s work would offer women a far better choice than the low-paid part-time and temporary work to which they are being relegated. However, no mainstream politician is advocating the only known and proven thing to get the system out of the crisis, they are all parroting the line of reduce state expenditure, cut public sector employment and cut social services and benefits.

III. The Role of Government and Economic Growth

It may be asked what does the above have to do with this argument advanced by politicians which denies that the government can create jobs and/or economic growth. The answer is quite a lot.

For all the babble about the importance of the private sector, the reality is that the government provides many things that help enable economic growth and profitability for the private sector. From government purchases from the private sector (think about how much the military industrial complex make from various government orders for its products and services); this alone eliminates uncertainty in terms of profitability and provides demand for their goods and hence leads to growth and rising employment in the private sector). Government spending and investment in housing, research and development, road building, etc. winds up in the pockets of the private sector. In fact, your tax dollars and government borrowing has been sustaining the private sector for quite some time and in fact in the post-war period it has enabled economic growth.

To quote John Harvey:

“That leaves investment and government spending as the real engines of growth […]. They are the forces that drive the business cycle rather than follow it. Businesses and the government together determine whether or not we are in rapid expansion or the depths of depression. This chart illustrates the point:
Harveyusgdpandmaindrivers, shrunk
[…] Note that this means that if there were no government sector, then the job of driving economic activity would be left to investment alone. This is similar to the situation we faced before WWII, when the government was tiny compared to the rest of the economy. The problem is, firms can build new capacity (i.e., invest) relatively quickly so that, ironically, at the very moment we have our greatest ability to produce goods and services, investment falls, layoffs occur, and we slip into recession. This is an absolutely critical point (http://www.forbes.com/sites/johntharvey/2011/04/29/why-the-private-sector-needs-the-government-to-spend-money/).”

What Harvey is demonstrating is the role of Government in creating economic growth. He argues that consumer spending follows the state of the economy, rising as the economy grows and falling as it declines. There are two things that drive economic growth, but in a recession, private investment is insufficient; it is government spending and investment that drive economic growth.

But let’s talk how government does drive economic growth. We know that this is due to government spending. But what else the government spending provides? It provides income to state workers which will buy the goods and services of the private sector. Unemployment insurance and pensions and social services (think of food stamps, welfare payments, and disability benefits) also ensure that those that would not have income due to unemployment actually can purchase goods and services. Quite obviously, those are for the most part produced by, yes, the private sector as we live in a capitalist economy.

So, given the situation, the last thing that we want to do when we are in an economic crisis in the advanced capitalist world is to cut the state sector, cut benefits and reduce wages. All you are doing in this situation is creating more unemployment and throwing people into poverty.

“In fact, Matthew Weaver of The Guardian reported, that one in five British workers are being paid less than a living wage, that is 4.82 million workers are not earning enough to survive on. This is because the designated minimum wage (£6.19/hour) is not a living wage (£8.30 in London, £7.20 in the rest of the country) and the Tories are opposing raising the wage due to fears of affecting employment.

“The study, launched in advance of next week's Living Wage Week, found that Northern Ireland has the highest proportion of people earning below the living wage (24%), followed by Wales at 23%. The lowest proportion of sub-living wage earners are in London and the south-east, both at 16%. It found that at least 70% of cleaners, kitchen staff and waiters and waitresses were paid less than the living wage (http://www.guardian.co.uk/society/2012/oct/29/five-million-britons-living-wage?INTCMP=SRCH).”

If you want to see what happens when these policies are implemented in earnest, take a look at Greece and Spain and you are witnessing the deliberate creation of an economic depression in these countries.

“Eurostat figures show that 25.75m people in the whole European Union were unemployed in September 2012 – an increase of 169,000 people on the previous month. Compared with September 2011, unemployment has risen by 2.145m.
Spain and Greece recorded the highest unemployment rates at 25.8% and 25.1% respectively (http://www.guardian.co.uk/news/datablog/2012/oct/31/europe-unemployment-rate-by-country-eurozone).”

In terms of the general state of the economies of Spain and Greece:

“So Spain’s economy has contracted by another 0.3% for the third quarter, whilst inflation in the country continues to rise and demand continues to slump. You could be forgiven for thinking that there is no way out of this hell-hole for Spain: the contraction now means that the country has been in its ‘double-dip’ recession for five consecutive quarters, and unemployment is now running at a fresh high of 25.1%. To add insult to injury, the Spanish government thinks that the economy will shrink a total of 1.5% this year, and another 0.5% in 2013 (http://www.managementtoday.co.uk/news/1157114/Spanish-recession-deepens-Greece-riskier-investment-Syria/).”

“The [latest Greek] draft budget for 2013, which provides for measures of 9.2 billion euros, an economic contraction of 4.5 percent and a primary surplus of 0.5 percent (http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_30/10/2012_468024, my clarification).”

The message is on the wall for the UK irrespective of the blip provided by the Olympics; circuses without bread do not make for economic growth and they also make for very unhappy populations as we see in Greece and Spain.

The fact that these realities are being ignored by politicians is truly disconcerting. On November 1st, it was reported that in the UK, both manufacturing and construction industries are shrinking. In fact, manufacturing has declined for the 6th month in a row; the only thing that grew is consumer spending (http://www.bbc.co.uk/news/business-20167643). That is proof that the small economic growth we saw in the last quarter (which the Tories are claiming is due to their economic policies) is the result of the Olympics and that we can expect the UK, once again, to fall into recession. Moreover, the stress on export-led growth (another plank of neoliberal economics) for manufacturing means that the sector is far more dependent upon conditions in the world economy and hence since world recovery is not happening, export-led sectors are simply not going to grow.

“I was discussing this situation in the UK with Karl Petrick who is an economic historian and he said the following:

“I'm pretty sure that was part of their party programme. The sad thing is that anyone who is paying attention can already see the effects of an austerity budget in the UK, but that has never even registered in the news on this side of the pond. Either that or we are in some sort of odd one-upmanship: You call that a recession? I'll show you A RECESSION!!!! The situation would be funny, if it was not so dire!”

It does not benefit the private sector either as the loss of income all around means that there are less people now able to buy what they produce. Since the private sector does not see that the possibility for investment as a great idea now due to the fact that there is not sufficient demand for their goods, they will not create new jobs. Waiting for the private sector to invest, even with all the tax breaks that various governments are giving to the corporations and to the wealthiest, is quite simply put, like waiting for climate change to fix itself, in other words, it is just not happening. In fact, the stock markets are the investment of choice, short term speculative investment is what is happening, not investment which creates jobs.

This leaves no choice but for the state sector to once again engage in direct government jobs creation … without that there is no way to combat structural employment. Moreover, given that we need far less labour (due to high productivity), the far more sensible option is also to decrease weekly working hours, but maintain income. That is, raise income of working people, not decrease it which is what we are seeing throughout the advanced capitalist world.
NHSambulanceservices

Conclusion

The re-privatisation of public goods (and it is reprivatisation as many of these services were provided privately before the existence of the state sector) represents a coup for capitalists. From reprivatisation of electrics, water, road services, they are now trying to get their hands on provision of health care in the UK, care homes, nurseries, fire services, education, and police services. The problem is that there was a reason for these public goods to be nationalised in the first place, private provision is always based first and foremost on profitability which means that if you cannot afford to purchase these things, then you will no longer be able to access them. With incomes falling all over the advanced capitalist world, that means that many of these things will no longer be part of workers’ consumption bundles. Moreover, since many of these things cannot be purchased, they will once again fall onto women as part of their household labour for which they receive no recompense.
Capitalismo
The erosion of workers standards of living in the advanced capitalist world is part of a wage squeeze trying to raise profits in a period of low profitability caused by the crisis. In periods of economic growth, wages can be allowed above social subsistence; that is what we saw in the post war period. High productivity and economic growth meant that the surplus product could be shared between workers and capitalists. Over time, the social subsistence level rose. What we are seeing now is the erosion of the social subsistence wage; they are pushing it down (so it is above physical subsistence and reproduction of the working class and they are pushing it downwards). What we are seeing is the combination of normal decreases in the value of labour power (e.g., bringing cheap goods in from overseas that are consumed by the working class) combined with a deliberate lowering of social subsistence wages, the breakdown of “jobs for life” and the rising number of people employed part-time, temporarily and as sub-contracted workers.

The problem with wage squeezes is that essentially it means that fewer and fewer working people and the high number of unemployed people (facing benefit cuts) can afford to buy things and this means that capitalists have no reason to increase production, employment, that is, to create economic growth.

What this means is that cutting the deficit, continuing cuts to the public sector, job cuts, and benefit cuts are exactly the wrong policies to deal with an economic crisis. All they do is deepen the crisis and provide no basis for recovery. Quantitative easing (increasing the money supply) has not stimulated investment which creates jobs, rather the money is being put into the financial markets for short-term speculative investment, which given the lack of regulation only increases the possibility of another financial crisis. But it is not financial crises which are the serious problem for the capitalist system at this point; rising income and wealth inequality will lead to a crisis in the real economy. With the politicians unable and unwilling to deal with the fact that capitalism is an inherently crisis-ridden system and in the absence of determination to ameliorate the problems caused by the system, the majority will be facing continued impoverisation. This represents not only a failure of capitalism which we know is incapable of providing for all, but a failure of bourgeois democracy as there is no mainstream political party that will actually stand up for the majority; all pretence that democracy applies to all is being rapidly eroded in the absence of a political party that actually speaks for and is answerable to the majority.

London Under Occupation: 0 Bread, + Circuses – by NY Brit Expat

3:00 pm in Uncategorized by Anti-Capitalist Meetup

People may be thinking that London under Occupation may be a little over the top to describe the situation for Londoners living under Olympic rule for the next 18 days, but that is in many way an understatement. Between the rights of corporate sponsorship, the occupation by security and armed forces, and a government that is hell-bent on prioritising the needs of sponsors and security concerns over the rights of citizens for freedom of speech and the right to live in peace, the term “under occupation” is an excellent description of the situation.

From the perspective of the population having the Olympic Games in London comes at a rather high cost. This is not only referring to access to tickets where few, if any, were set aside for those living in the boroughs (Newham, Waltham Forest, Hackney and Tower Hamlets) surrounding the main stadium. These boroughs are composed of mostly poor and working class people with large percentages of people of colour; they are incredibly racially and ethnically diverse boroughs.

Tickets were sold by bidding in a lottery which meant that locals could not afford to bid and win tickets. Moreover, given the fact that tickets are literally impossible to get and that there are large numbers of empty seats for venues which many people would love to get, one can only assume that these are in the hands of corporate sponsors whose workers were not interested in the seats. Supposedly, the locals’ gains would arise from the construction jobs (that didn’t work out) and now the many retail and part-time jobs the Olympics would provide. For all the talk about gains by small shopkeepers due to suspension of Sunday trading laws, in most cases this means that their families (they are often family owned and run shops) would need to work the extra hours. Also, they were unable to sell anything connected with the Olympics not obtained from corporate sponsors. No replications of Olympic materials could be sold unless they were able (at high cost) to open accounts with official sellers.

However, the general problem with the Olympics affects us on a daily level; this is due to the bombardment of corporate advertising, the creation of an up-market mall (where most locals can only look but not afford to purchase; certainly Prada is not hiring us), the introduction of special Olympic lanes where Olympic bigwigs can be ferried to and from events, overcrowded public transport, the militarisation of the city both due to the use of military and private security forces, the placement of SAMs in residential areas, the aircraft carrier stationed in the Thames and the pre-emptive arrests of graffiti artists, the arrests of protestors and the denial of protest permits. In a city where the poor and working class are facing cuts in benefits, the introduction of forced labour as part of welfare reform, job losses (being replaced by part-time low paid jobs), and service cuts (libraries, after-school clubs, cultural centres, education cuts, police department cuts), corporate sponsors were granted complete access and tax breaks as part of the deal for the Olympics being brought to the country.

According to the Financial Times (“A need-go-know guide to London 2012,” 27/08/12, p. 3 ) the costs alone of the Olympic venues start with £40m for a temporary Basketball arena (they are hoping to sell the materials onwards to Brazil), £87m for the Velodrome, £251m for the Aquatics Centre, £295m for the media and broadcast centre, £428m for the Olympic stadium and £935m for the Olympic Village (this will be reconfigured by a Qatari based consortium into 2,800 properties, some of which will be sold for housing for key workers and the rest to create a gentrified area complete with luxury mall; nothing for the desperately needed social housing in the area of Newham). The Olympics were originally set to cost £2.4bn, but it is now estimated that they will cost £9.3bn. According to Al Jazeera, the latest government figures on the costs of the 2012 London Olympics have now risen to $14.5bn of public sector money, and expectations that it could be far higher. Of that current amount, $860m alone will be for Olympic security and this includes the use of 18,200 soldiers to help with security for the games. Interestingly, according to the Financial Times, the public budget for the Olympics was provided by a combination of lottery (£2.2bn), central government (£6.2 bn) and the Greater London Assembly and the London Development Agency (£0.9 bn). British companies won contracts amounting to £7.3 bn and there have been 8.8m event tickets sold. In terms of human presence, there are 10,500 athletes, 70,000 volunteers (hopefully real volunteers, not poor people forced into service) and 21,000 journalists. This is a huge amount of money that is being made available for this event in a country where they are trying to force disabled people off of disability benefit to save money.
crippen_edit
The economic benefits of the Olympics look like they may restricted to the corporate sponsors than anyone else. But there is even more interesting news and that is from a business perspective; it seems that London’s top hotels and restaurants seem to find themselves with vacancies. This may be due to the fact that they have upped prices so much, that they cannot find people stupid enough to pay for them; 23% vacancy rates are nothing to sniff at (http://www.bighospitality.co.uk/Trends-Reports/London-2012-Olympics-23-of-London-s-hotel-rooms-currently-vacant-for-The-Games; http://www.guardian.co.uk/money/blog/2012/jul/24/hotels-properties-olympics) especially in an economy which is currently continuing along in recession. In fact, it has shrunk by 0.7% between April and June … which of course they have absurdly blamed on the Jubilee (the extra bank holiday) and bad weather, and of course, Europe, rather than their economic policies. Since they had claimed that the former would be a boost, I am a bit confused again.

In Great Britain, the use of hollowing-out policies (introduced in the US under Bush) has been introduced as part of the austerity measures to destroy the state sector; as such, services that used to be performed by the state sector (like secretaries working for the police) are no longer done by civil servants, but rather private companies. This is affecting not only the NHS and local council provision, but also policing and the military. The number of police officers is at an all-time low due to cutbacks (down 10,000), but volunteer special policemen numbers are up 10.4% to 20,343; this is at the same time that they are being called on to do an increasing number of things, like help with the Olympics security. It is interesting in that most right-wing governments are usually aware that if they are going to introduce draconian economic measures on their populations, having the police and army on your side could prove extremely useful if inevitable problems arise (as they have in Greece and Spain for example); this may be a case of arrogance on the part of the government or again they simply think that the British poor, working and middle classes are so beaten down that nothing could get them angry enough to resist the destruction of their social welfare state; divide and rule is proving a useful tool in alienating private sector workers from the demands of public trade unions given that the former have already suffered substantially in terms of the attacks on their pensions.

I. Commercialism and Branding

For those unaware of what happens when your city is “lucky” enough to win the Olympic Games, there are immediate rules that guarantee sponsors exclusive access to advertising and sales at the Olympics. In fact, you cannot “win” the Olympics without agreeing to these rules. These sponsors contribute money to the Olympics and get a lot of money back in return; Coke for example has contributed anywhere from £53-75m pounds, in return they get exclusive sale of their products at the Olympics and exclusive advertising rights during the Olympic games.
ronaldmcdonaldolympicflame_edit

“Corporations can legally become associated with the London 2012 Games in two ways: First, multinational firms may seek exclusive marketing rights through The Olympic Partner program (TOP). The other option is through agreements with the LOCOG, the local British organization. But plenty of non-sponsors will attempt to correlate their brand with the Games, which is widely known as ambush marketing—something the IOC and LOCOG take very seriously.

The Olympic Marks and Imagery Usage Handbook defines ambush marketing as “a planned attempt by a third party to associate itself directly or indirectly with the Olympic Games to gain the recognition and benefits associated with being an Olympic Marketing Partner.” To suppress this type of activity, the IOC established comprehensive guidelines and has engaged in several initiatives to enforce them. For instance, the IOC requires that the host city—London, in this case—takes special measures to control ambush marketing during the course of the Games in and around Olympic venues “in order to preserve the Olympic brand.”

When London was first appointed as the host city for the 2012 Games, the government passed a new law, the London Olympic Games and Paralympic Games Act 2006 (the Act), to supplement the existing laws relating to intellectual property in the UK. Together with the Olympic Symbol (Protection) Act of 1995, these laws protect the sponsors and partners from unauthorized advertising. […] To ensure that local businesses comply with the trading and advertising laws and to protect the Olympic brand and sponsors, nearly 300 Olympic enforcement officers will patrol around venues before and during the games. But local, non-sponsor businesses aren’t the only ones who have to abide by strict rules. Even the paying partners who have privileges and rights have to comply with certain guidelines. (http://www.forbes.com/sites/jacquelynsmith/2012/07/24/olympic-hurdles-for-advertisers-the-games-unique-rules-and-restrictions/)”

There are several different types of Olympic advertisers depending on how much they spend, but in addition to exclusivity of sale and advertising, there is also the benefit of temporary tax “breaks” from UK corporate tax for foreign-based MNC sponsors and their workers (who are given a temporary UK income tax break.

This is happening in a country where austerity measures have been introduced by the government that are destroying jobs, the state sector and our social welfare state and that this is justified due to high levels of government debt; the decrease in corporate taxes and the elimination of the 50% tax on those with the highest income is reprehensible. But to add insult to injury, the fact that MNC Olympics sponsors had taxes on profits earned at the Olympics written off is not only pouring salt on the wounds of the majority, it is a demonstration that the needs of corporations and revenue of the Olympics takes priority over the needs of the citizens and proves beyond a shadow of a doubt that the government’s term of “The People’s Olympics” is not just a joke for people to laugh about, but a slap in the face of those facing impoverishment and job loss. The idea of corporations, those that work for them and Olympic athletes not having to pay taxes for their profits or advertising contracts is simply disgusting.

“New tax rules ushered in as part of the winning Team GB bid include ‘a temporary exemption from UK Corporation Tax and UK Income Tax for certain non-resident companies’.

The legislation is written to include ‘partner’ organisations such as McDonald’s and Visa. Both, along with other ‘partners’, look set to make a tax-free fortune. The former will a monopoly on vending branded food and the latter a total monopoly on venue and ticket payment methods.

The new legislation also exempts all foreign nationals working on the games in the UK from paying income tax on any earnings. Thousands will be exempt from taxation from competitors to media workers (including journalists, technicians and producers) to representatives of official Games bodies and technical officials (including judges, referees and classifiers) along with the athletes themselves (http://www.ethicalconsumer.org/commentanalysis/corporatewatch/thegreatolympictaxswindle.aspx).”

An incredibly successful campaign started by 38 Degrees was launched in response to this article targeting companies that were tax avoiding due to their sponsorship of the Olympics Games.

The responses to the campaign on the part of the targeted multinational corporate sponsors are telling as every corporation responded. All 14 multi-national corporations (MNCs) (including Coca Cola, Proctor and Gamble, Dow Chemicals, and McDonalds) that were targeted by 38 Degrees, have waived their Olympic sponsor tax break or explained that they were not eligible (http://www.marketingmagazine.co.uk/news/1143282/Adidas-EDF-join-top-sponsors-waiving-Olympic-sponsor-tax-break/; http://www.tax-news.com/news/(htOlympic_Sponsors_To_Turn_Down_UK_Tax_Breaks____56452.html).
The seriousness with which exclusivity of advertising is taken by the Olympics committee can be demonstrated in a row which erupted last week when the chair of The London Organising Committee of the Olympic and Paralympic Games (LOCOG), Lord Seb Coe, announced mistakenly that people who were wearing the wrongly branded clothing could be denied entry to the Olympics Games irrespective of their holding tickets to the various events (http://www.guardian.co.uk/sport/2012/jul/20/coe-olympics-sponsorship-row; http://www.dailymail.co.uk/news/article-2176383/London-2012-Olympics-Seb-Coe-lays-law-branding-Games.html). Having images of barefoot and bare-chested people at Olympic events going through my head upon hearing the story when it erupted, it was of little consolation that Seb was actually wrong about this absurd position. What actually concerned me was that clearly Seb Coe did not see a problem with the position he had taken on this issue; Seb has history of making absurd comments on things on which he has little or no information specifically when these relate to corporate sponsorship.
corporatetubemap_edit
One of the most contentious corporate sponsorships is actually Dow Chemical and a campaign has been waged on several fronts protesting their choice as an Olympic sponsor.

Last week, 6 protestors were arrested after a fake medal ceremony in Trafalger Square where green custard was poured on fake representatives of Olympics corporate sponsors BP, Dow and Rio Tinto that were chosen as the worst Olympics sponsors; clearly performances criticising Olympic sponsors are not deemed amusing .

Anger at the acceptance of sponsorship by a MNC in an Olympics in which supposedly ethical and environmental considerations are constantly talked about is not a small inconsistency. Opposition to Dow derives not only from the catastrophe in Bhopal in which there are lawsuits still underway. Raising the issue of Bhopal has run the gamut from petitions, to an exhibition to a staged die-in by members of the Bhopal Medical Appeal on July 26th.

The use of Agent Orange in Vietnam (of which there are estimated 4.8 m victims, many of them children) had also been raised to question Dow’s sponsorship of the Olympic Games. Seb Coe once again demonstrates his ignorance in response to an appeal concerning Dow by the Vietnam Women’s Union, as John Pilger reports:

“In his reply, Coe describes Agent Orange as “a highly emotional issue” whose development and use “was made by the US government [which] has rightly led the process of addressing the many issues that have resulted.” He refers to a “constructive dialogue” between the US and Vietnamese governments “to resolve issues.” They are “best placed to manage the reconciliation of these two countries.” When I read this, I was reminded of the weasel letters that are a specialty of the Foreign Office in London in denying the evidence of crimes of state and corporate power, such as the lucrative export of terrible weapons. The former Iraq Desk Officer, Mark Higson, called this sophistry “a culture of lying.” (http://www.opednews.com/articles/Blair-War-Olympic-Deals-by-John-Pilger-120719-735.html)”

As Pilger points out, there has been no constructive dialogue between the US and Vietnam on the use of Agent Orange, no recompense paid to the Vietnamese victims, no war-crimes tribunal for the use of chemical weapons that not only destroyed people’s lives over generations, but defoliated the rice bowl of Asia and poisoned the land and water tables. Really, the people that write PR should certainly be bothered to check their facts before letting Seb makes statements that are so blatantly inaccurate. When Seb Coe says things of this nature to justify the inclusion of sponsorship for one of the MNCs that manufactured dioxin for use by the US government, the terms ethical behaviour and environmental concerns are demonstrated as lies; it is money that is relevant and all other concerns not even of secondary importance.

II. Olympic Security and the Militarisation of London

A seriously disturbing thing has been the whole discussion on Olympic security which has several equally unpleasant components. In many senses the level of concern about London Olympic security is part and parcel of the legacy of the “war on terror” that has been used to justify so much of the attack on civil liberties and the strengthening of the power of the security forces both public and private (reading the Government’s security preparations for the Olympics is rather instructive). ”Security” is a big industry these days and Olympic security provides a perfect excuse for the suspension of civil liberties and the payment of big money. We are all hoping this will all go away after the Olympics like the government promises; but one must take into consideration the numbers of CCTV cameras all over Great Britain which record our every action and pray that the abnormal does not once again become “the normal.”

A. G4S

In March 2011, consistent with the whole neoliberal approach that defines recent British government policy, the government hired G4S to cover Olympics security. G4S is a private security concern with a questionable (let’s call this understatement) human rights record to handle security. It is a multinational corporation operating in a number of countries. In the UK, G4S runs 3 immigrant detention centres to house illegal immigrants before deportation (often taking quite some time to complete); it has received 700 complaints, including allegations of assault and racism. There is the additional “issue” of the death of an Angolan deportee, Jimmy Mubenga, in 2010 in their custody after being restrained by G4S agents in a BA flight (for more detail on their history, see: http://www.telegraph.co.uk/news/uknews/9405046/G4S-previous-controversies.html). They also run security in Britain’s private prisons and there is the story of the loss of the master keys leaving prisoners locked up for 24 hours in their cells in 2011; there are also more problems with which they have been associated in their running of security in private prisons.

Then there is their relationship with the Israeli government (http://www.whoprofits.org/company/g4s-israel-hashmira; http://stopthewall.org/g4s-israeli-occupation-palestine-and-emergence-g4s-brazil), Israeli settlers to whom they provide security for illegal settlements on the West Bank and the abuse of Palestinian prisoners.

Putting aside for this moment the obvious point about the privatisation of security, the choice of this company which has a notorious history combined with grotesque failures, is pretty impressive.

Part II of the G4S story is that they were unable to fulfil their contract which is an interesting story on its own.

“A confidential report by HM Inspectorate of Constabulary (HMIC) warned about concerns over security 10 months ago, leading Games organisers Locog to increase the number of security guards to be supplied by G4S from 2,000 to 10,400 while the value of the contract more than trebled from £86 million to £284 million (http://www.independent.co.uk/news/uk/home-news/g4s-cant-get-olympics-guards-to-turn-up-7946500.html).”

Reading through various accounts of allegations of responsibility for the insufficient numbers recruited and turning up for work, the cause of the difficulties in fulfilling their contract seems to be a combination of increased demands by the UK government in terms of numbers needed, the company’s insistence that while they trained sufficient numbers (reportedly 20,000 were accredited and trained to cover 10,400 posts), there was a failure on the part of the workers to turn up. The last is disputed by workers who claim that there was a lack of information from the firm telling these recruits where and when they were needed.

One additional point that has been raised is the pay rates for recruited workers: it is unclear who set the wage rates at £8.50/hour. The company insists it was the government that set the wage levels and the government insists that it budgeted for £9-12/hour depending on seniority and level of responsibility. The company insists that it was the government that pointed out the obvious that if you pay workers less, you get a higher profit. The question is whether that constitutes government advice or pointing out the obvious to a company that is in the business of providing labour (http://www.bbc.co.uk/news/uk-england-london-18898646). I find it odd, that they would not understand one of the basic rules of capitalism. You make more profit if you pay workers less (heck, that was obvious to Adam Smith in 1776), but the other part of the equation is if the job is really crappy, you may not get people to take the jobs irrespective of the level of desperation of the working class. Perhaps that is why the government is working so hard to lower the levels of unemployment benefits and introducing forced labour for the long-term unemployed. Removing as many possibilities of survival without having to work for wages that barely compensate effort and free training is clearly a problematic that must be solved if the flexible labour market that the ConDems are trying to consolidate can be a success.
dalekpolice_edit
An obvious question arises that no one seems to have discussed is whether this was a classic scenario which often occurs in a bad jobs market. The company claims to have recruited and trained 20,000 workers to cover 10,400 positions. Given that the jobs only last 18 days at a pretty basic pay for unpleasant work, one wonders if people knew that too many were recruited and trained, decided to cut their losses and try to find a job that they knew they could get and which lasted for a longer period. I was speaking to the cabbie driving me to escape the Olympic who told me a story about a woman that was applying for a job as a sales clerk at a low level retail firm specialising in baby clothes. After spending £400 for cab fares for various interviews and going through the training, it turned out that there were 25 different people recruited for a single job. After spending her savings trying to obtain a part-time minimum wage job, she simply gave up in disgust.

The last question that has yet to be answered by the government is how much G4S will lose from its contract for failing to provide what it promised. We are still waiting to hear clarification from the government about this little thing.

B. The British Military to the Rescue?! Of whom?!

The use of the British military as a component of Olympics security forces was planned in the beginnings; but they were supposed to be supplementary services for G4S and involved in very specific roles for London security (like manning the missiles that they placed in residential areas of London and on the attack helicopters and in the air in Typhoon fighters to shoot down invading Martians over residential areas of London). The fear that G4S would now run around willy-nilly and recruit just anyone to fulfil their security contract has prompted the government to draft in large numbers of British military forces as the main component of security. Many of these members of the armed forces were back in the country as part of a break from tours of duty overseas in Afghanistan.

“[…] British officials said they’d activate another 1,200 military personnel to fill the shortfall, bringing the total of British troops who will work the Olympics to 18,200. For comparison, Britain deploys about 9,500 in Afghanistan (http://www.stripes.com/news/europe/2005-attack-helped-shape-security-planning-for-london-olympics-1.183907).”

Having a choice of a private security firm with a dubious human rights record and the British armed forces to do security for the Olympic Games is truly being caught between a rock and a hard place. Does the consolation of the latter being forced to uphold the Geneva conventions make things better?! But there is an additional concern. On the day in which it was stated that there would be an increased military presence to cover for the failings of G4S, the following story (treated as unrelated) was also released raising increased violence on the part of soldiers returning home from war zones:

“One in eight soldiers has attacked someone after coming home from a combat deployment, according to a Ministry of Defence funded study of 13,000 personnel.
The study by Dr Deirdre MacManus, at The Kings Centre for Military Health Research, found an association between soldiers’ experiences in Iraq and Afghanistan, and violent behaviour at home.
A survey of around 5,000 Iraq veterans found that nearly 581 were involved in assaults, domestic abuse, and other violence soon after returning to the UK (http://www.bbc.co.uk/news/uk-18965076).”

Given this report, perhaps it is better that these people are given support and assistance rather than being sent in as security at the Olympic Games? I surely cannot be the only person thinking that this may not be a good idea.

C. The Militarisation of London

Finally, there is the militarisation of London itself due to surface-to-air missiles being located in some residential areas, attack helicopters on standby, the aircraft carrier and other warships being stationed in the Thames in London, and the use of spy drones. As an understatement this has disturbed many.
missilesmarypoppins_edit
In the midst of all the insanity of the Olympics security plans, the one that disturbs me the most is the stationing of SAMs in 6 areas of London. Two of these are on top of populated housing blocks in the middle of residential areas. I am certainly not the only person truly concerned by this piece of insanity; a whole campaign built around stopping the placement of the London Missiles was organised. A lawsuit was filed trying to prevent the installation of missiles by residents of the Fred Wigg tower (just up the street from where I live) by the Ministry of Defence (MoD) making the obvious point that the introduction of these missiles literally turned these places into military targets if there was actually a terrorist attack and raised whether this was a violation of their human rights to live peacefully and securely.

David Forsdick, appearing on behalf of the MoD argued:

“The MoD, intelligence agencies and the Metropolitan Police do not consider there is any credible threat to the Fred Wigg Tower from terrorism (http://www.bbc.co.uk/news/uk-england-london-18765062).”

Let me repeat that statement: he argued that the credibility of the threat of these buildings becoming military targets was not sufficient to warrant concern. Moreover, that this had been signed off by the Prime Minister David Cameron, Deputy Prime Minister Nick Clegg, home Secretary Teresa May and the Defence Secretary (not certain whether this is the current one Phillip Hammond or the previous one Liam Fox) in “Defence of the Realm” is not particularly comforting as none of these people live anywhere near where these missiles are being deployed and quite honestly given the way they treat the poor and working class in Great Britain, they are the last people I would trust to cover our interests. If the threat is not credible, why the hell would anyone think that putting missiles on the top of residential blocks is a good idea?
missilesfredwigg_edit
The ruling on the part of the judge was rather interesting. On the one hand, he argued that there was not only sufficient consultation of residents, but what occurred was “immaculate” and that the military was under no obligation to do that anyhow. But the second point was more disconcerting, the judge, Mr Justice Hadden-Cave stated that the tenants had not understood correctly the situation. That is typical, clearly the stupid and uneducated working class simply are too unsophisticated to understand the notion of deterrance! What Mr Justice Hadden-Cave does not understand is that we most certainly do understand the notion of deterrance; however, we simply do not want them stationed on the roofs of our apartment buildings … perhaps they can put them in Westminster or in Mayfair where the rich live?! Perhaps the rich and famous can understand the need for deterrance more than the working class?

D. Civil Liberties

To end our odyssey into the nightmare of security measures of the London Olympics, we need to address the impact on our civil and human rights. We have already mentioned the arrests of protestors following the fake awarding of medals to the worst of the Olympic sponsors. There is the additional question of the policy of pre-emptive arrests by the Metropolitan and Transport Police. Announced on June 2nd, Scotland Yard has said that they are planning to pre-emptively arrest those that are planning “criminal activity” at the Olympics, specifically groups of thieves and pickpockets. However, the police said that this would not be used against lawful demonstrators asking them to notify them beforehand to protect their right to protest.

But that raises an interesting point which relates to the pre-emptive arrests of 4 graffiti artists to prevent damages to the city. One of those arrested, Darren Cullen, actually has done work legally for Adidas, one of the Olympic sponsors and for other major corporations. Mr Cullen also tries to get graffiti artists to work legally. Yet somehow he has been pre-emptively arrested, bailed, and forbidden from having spray paint cans, using public transport and going within a mile of the Olympics venues:

“These arrests come in light of Wednesday’s court ruling by Lord Justice Richards and Mr Justice Openshaw said that police pre-emptive strikes for Prince William’s wedding a year ago were not unlawful. Human rights activists have voiced concerns about what affect this ruling will have on Games security.

All four have been released on bail, with restrictions forbidding them from holding any spray paint, riding any of the public trains around London, or being within a mile of any Olympic Games venues (http://www.tntmagazine.com/news/london/police-raid-homes-and-arrest-graffiti-artists-in-pre-emptive-olympic-swoop). “

While the Metropolitan police have insisted that they will not stop legal protestors from stating their grievances using pre-emptive arrests, the arrests at Trafalgar Square and the extension of a banning order for two years prohibiting Simon Moore from going within 100 yards of the Olympic torch relay, the games themselves or anything relating to the diamond jubilee. The extension of Mr Moore’s banning order really belies the police’s claim that they will not infringe upon freedom of protest. Moore was originally arrested for blocking access to a building site while opposing the placement of an Olympic practice basketball court in Leyton marshes in April 2012. So, they won’t pre-emptively arrest you, they will arrest you after the fact and extend banning conditions against you.

Finally, remember the point about not stopping your right to protest when the police announced their pre-emptive arrest policy? Well, letting the authorities know when we are planning a protest is clearly insufficient to guarantee your right to protest; quelle surprise! The borough of Tower Hamlets had refused the Counter Olympics Network the right to make speeches at the end of the march scheduled for the 28th of July resulting in Tower Hamlets council being threatened with being taken to court. The march was able to go ahead as scheduled (with the final release of information on July 26th, two days before the demonstration (http://counterolympicsnetwork.wordpress.com/2012/07/26/final-arrangements-for-march-and-event-on-july-28th/), but the whole point of the council doing this is to disrupt the ability of organisers to coherently organise protests; the tactic of first giving permission, then taking it away the right to have speeches, then cancelling the demo and finally allowing it under pressure is all part of the game to prevent people from getting out large numbers as protestors do not know what will happen. Welcome to the games, they take all forms in Great Britain these days!