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Sack the Fat Cats Not the Workers

MANUFACTURING IN Britain is now officially in recession. But this cold fact seems to have escaped Britain's fat cat bosses who continue to let the good times roll for themselves.

Under this New Labour government Britain has among the richest bosses and the lowest-paid workers in the developed world. And the gap is getting wider.

After pay rises averaging 29% over the last two years, top company executives are now paid £100,000 a year more than their counterparts in Europe. A Management Today survey says that British chief executives now take home on average an annual salary package of £509,000. And it tends to be the worst-performing bosses who get the highest rewards.

Only the USA with salary deals around £1 million a year pays its top executives more.

In Britain the rapidly declining number of manufacturing workers earn the lowest wages in any of the world's developed economies - £20,475 a year on average for more hours at work than other workers in Europe. Executives whose incompetence helps destroy these jobs get about 25 times as much.

Instead of defending grossly under-rewarded workers and fighting the bosses, the New Labour government staunchly defends capitalism. In fact Blair wants to be just like the top bosses, that's why he increased his own pay by £47,000 a year recently.

While the whole UK economy is not officially in recession, because of the performance of service sector companies like the financial institutions, it won't be long before a full-blown recession is under way.

Throughout the world an economic recession is gathering pace. Another survey estimates that two million jobs will be lost in Asia in the rest of this year. This follows huge job losses there in the last four years.

When these fat cats start demanding belt tightening and job losses because of their system's recession then we say they should be the first to lose their jobs. Their companies should be taken into public ownership and run under workers' control and management.

Then jobs could be saved by introducing a 35-hour week and a socialist economic plan could start rebuilding the crumbling health, education and housing system and produce socially necessary goods and services.

 

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Student funding system failing

Now put Fees on the scrap heap

IN THE next few weeks tens of thousands of students will get their A level results and be wondering whether or not to go to college. One factor deterring many will be the huge debts and poverty they will suffer. But after less than three years of tuition fees and the abolition of the student grant, New Labour reluctantly admit fees are not working, as SARAH MAYO and CLARE JAMES report:

RECENT PRESS coverage about fees indicates the government is privately talking about reforming the system. Tony Blair has been forced to "look again" at the deeply unpopular tuition fees and the student loans system.

In a very significant development, Blair admits fees were the top complaint on the doorstep during the election (The Guardian, 31 July).

Working-class people are disgusted by the continuing attack on free education, recognising that fees and the abolition of the student grant stop working-class students going to and staying in higher education.

Save Free Education, Socialist Students and the Socialist Party have been campaigning against fees since their introduction in 1997 and have been instrumental in bringing this issue to the fore.

The pressure Blair now feels shows the tremendous impact that campaign has had. Fees, along with stopping public-sector privatisation, are now the burning political issue,

A recent Institute for Public Policy Research report, like the recently published Rees report on university funding in Wales, confirms that the current funding system deters working-class students from accepting university places because they fear thousands of pounds of debt.

According to the Rees report, average student debt on leaving university is now about £12,500 although this figure is often far higher. Many working-class students are forced to work in low paid jobs up to 40 hours a week to survive.

Claims by Labour that they can't afford to scrap the fees and reintroduce the grant are blatant lies. The government has effectively pocketed over £400 million in two years from scrapping student grants and introducing tuition fees.

According to House of Commons library figures, these policies delivered a £415 million 'profit' in England alone - even this is probably an under estimate!

Former Education Secretary Blunkett tried to justify fees on the basis that the money 'saved' would be redistributed within the higher education budget but this has not happened.

It's now crucial to keep up the pressure on the Labour government to scrap upfront fees throughout Britain. This must be a step towards completely scrapping fees and reintroducing a living grant.

The campaign against tuition fees must be stepped up. Socialist Students is calling on the National Union of Students to mobilise students for mass action this October and pushing for mass non-payment of the fees to make the system unworkable.

 

For more information on the campaign to abolish fees contact Save Fee Education at sfehq@hotmail.com or phone 020 8988 7947.

 

 

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The Bank of England’s fourth cut in interest rates this year was prompted by government figures showing manufacturing in sharp decline, with 35,000 jobs lost in the last week alone. However, this measure is unlikely to prevent the onset of a global recession in capitalism, as Per Olsson argues:

World Economy: Here comes the slump

Capitalist commentators have suddenly woken up to the fact that a global capitalist crisis, a recession or slump, is looming.  The rich and the capitalist class will hope to escape it by making the working class and middle classes pay for the crisis.

But the fact that the crisis is setting in at the same time as an anti-capitalist mood is gaining momentum, will have profound effect on the political outlook of workers and young people. A socialist revival is on the agenda.

The British economy is sliding down. Manufacturing is already in recession. In the year to March, 148,000 jobs were lost and now the pace has picked up.

The economic slowdown in manufacturing has started to spread to the service sector. But according to Chancellor Gordon Brown everything is fine and somehow British capitalism can weather the storm.

The slowdown in the US had an immediate effect on Europe, particularly on German exports. German manufacturing orders since March have fallen at their fastest rate for over five years.

A global crisis

THIS CRISIS is the first synchronised global downturn. The three main capitalist countries - US, Japan and Germany - are going down together, while the rest of the world slides after. "It looks like the downside of globalisation could be globalised slump", warned the London Evening Standard [30 July].

The present global downturn represents a new phase in what has become a drawn out process of crisis, which began in East Asia in 1997. But the processes towards worldwide recession have accelerated in the course of this year.

There is no major capitalist power that can act as a locomotive to economic growth and pull the rest of the world along. Japanese capitalism is mired in a slump as the country is entering its second decade of stagnation. The US economy is hardly growing at all. The world’s financial system is walking a tightrope at the moment.

The situation is different to 1997 – 1998, when the US could act as an engine of growth for the rest of the world. Then, the US economy was growing at an annual rate of 4% to 5%.

The US economy expanded at a 0.7% annual rate in the second quarter of this year, the lowest growth rate for eight years. Manufacturing output in the US has fallen for 12 months in a row, investment dropped 13.5% at an annual rate last quarter. Corporate America's profit is plunging and unemployment is on the rise again. Even further interest rate cuts will do little to change the situation, given the level of overcapacity and lack of demand in the economy

US capitalism is now paying the ultimate price of living beyond its means - a record current account deficit and the creation of a dangerous debt trap.

While the US economy was growing, huge imbalances were created in the world economy and the US has become totally dependent on the will of foreign speculators to finance its deficits.

But the capital inflow to the US could overnight turn into an outflow as the slowdown starts to deflate the Wall Street bubble. This in turn would throw the value of the dollar into reverse causing panic across the world - "the meltdown scenario" as The Guardian called it [30 July].

It is almost impossible to predict the speed and the depth of the impending global crisis of capitalism. The downturn has not yet spread to all the main sectors of the economy and consumers are still spending.

It is, in fact, the consumers, who are keeping the economy going in the US and, for example, Britain. But this cannot continue for any length of time because of the enormous amount of personal debt accumulated.

Further job losses, low or no growth in disposable income and falling household wealth as the stock market declines will mean that households will have to cut back and some will start saving again.

However, global trade has slowed at its sharpest rate for 25 years in the course of this year and world industrial production is falling in absolute terms. This is bound to affect other sectors of the economy as growth in national income stagnates.

The "new economy'?

GLOBALISATION, INSTEAD of giving way to a "new economy", has bred a "classical" crisis of capitalism expressed in overcapacity and overproduction.

And while the capitalist commentators may be able to describe what is happening, they are not able to give an explanation why. It is the madness of the market and the production for profit which cause the crisis. It is "over-investment", overcapacity and overproduction in relation to profit, not need. Capitalism is a system of production for profit.

It was Karl Marx who explained how the over-accumulation of capital, fuelled by credit expansion, leading to a fall of profit was "the main lever of overproduction and over-speculation". (Capital Vol.3)

Modern capitalism not only faces the problem of a profit squeeze, but also the problem of the limits set by the market. Ultimately, goods produced have to be sold in order to make a profit. But who is going to buy all the goods when the buying power of workers is increasingly squeezed and the public sector has been slashed?

Furthermore, why should capitalists invest when they can, with existing capacity, already produce more than can be absorbed by the market? It is an unsolvable capitalist equation, which is why the system develops through ebbs and flows, periods of growth and periods of recession and stagnation.

It was not accidental that the dot.com bubble was the first to burst, because most of those companies never generated any profit. However, the bursting of the dot.com bubble was a prelude to a crisis in the whole hi-tech sector, including telecommunications, which was the most dynamic sector of capitalism in the 1990s.

It will take years to reduce the amount of overcapacity that exists, for example, in the hi-tech sector and millions of jobs will be lost. The telecom industry has already cut 293,000 jobs worldwide so far this year, mostly in the last quarter. A further 54,000 have gone from related component suppliers.

The mass redundancies, company bankruptcies, savage public spending cuts and financial meltdown affecting Argentina and Turkey - sparking new mass upheavals - has delivered a dire warning of what happens when the crisis starts to hit.

These countries give an illustration of the ferocious class battles that lie ahead when workers and the poor are forced to take to the streets in order to protect their jobs, income and future.

 

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The Aftermath of Genoa

Hundreds of thousands of anti-capitalists and socialists demonstrated in Genoa from 19-21 July. Many protesters were angry at the police’s vicious, provocative behaviour. Robert Bechert, part of the Committee for a Workers’ International (CWI) delegation in Genoa, looks at the effect the protests are having on an Italian society in growing crisis.

THE MASSIVE demonstrations and state repression in Genoa mark a turning point in Italy and in the growing opposition to capitalist globalisation. These huge protests - 300,000 marched on 21 July - mark the start of a new radicalisation in Italy.

After five years experience of the centre-left 'Olive Tree' government's attacks on living standards followed by May's election of Berlusconi's right-wing government, many workers feel they have to take action themselves to gain any improvements.

Five days after the elections, metalworkers held a half-day strike over wages. On 6 July 300,000 metalworkers struck and held demonstrations of 60,000 in Milan, 50,000 in Turin and 50,000 in Bologna.

Politically this radicalisation was shown in an opinion poll on the G8 summit which, says the Wall Street Journal, showed that 25% of Italians disagreed with the anti-globalisation movement, 56% agreed with the planned protests but rejected violence, while 16% believed that violence in Genoa would be justified.

The Italian state's violence in Genoa and the memories this evoked, immediately provoked more opposition. On 24 July there were protest demonstrations in many Italian cities, in Bologna, Rome and Milan rallies of over 50,000 were reported, 30,000 in Florence and 15,000 in Genoa. Unfortunately no further mass protest action was organised after this.

The Genoa protests were much larger than the organisers planned. On 19 July the immigrant rights march was expected to be around 14,000, it was over 50,000. On 20 July 70,000 took part in uncoordinated protests at the start of the G8 summit.

Finally, on 21 July the organisers expected 120,000, but 300,000 took part. This protest was at least 90% Italian workers and youth. Politically the left-reformist Rifondazione Comunista (Prc) dominated the march and there was a huge contingent from the Fiom-Cgil metalworkers' union. As on other anti-globalisation protests, large numbers of workers were motivated by domestic as well as international issues.

The Italian newspaper La Republica published a policeman’s allegations: "There is such a strong fascist culture in the police that young recruits are easily sucked in … But the actual slaughter was done by the hardcore. They lined them up and banged their heads against the wall. They urinated on one person. They beat people if they didn’t sign Facetta Nera (a fascist hymn)."

Carlo Giuliani's killing made the 21 July demonstration even bigger and reopened a widespread debate in Italy on the state machine's role in general and 'undercover' police, agent provocateurs and fascists in particular.

On TV phone-in shows, many callers spoke of seeing people in civilian clothes, sometimes dressed in black, being directed by police to different parts of the city and how the police did nothing to prevent attacks on property.

The savage attack on the Genoa Social Forum's Media Centre and the illegal detention and torture of protesters by clearly fascist members of the security services brought all these issues to a new fever pitch.

Many remember that in the 15 years up to 1960, 94 Italians were killed during strikes or protests. Then, as the workers' movement gathered strength in the late 1960s and 1970s, the fascists and their police supporters started their "strategy of tension" that led up to the August 1980 fascist bombing of Bologna railway station that killed 85 people.

The 'Mani Pulite' (Clean Hands) investigations in the early 1990s confirmed the existence of a 'sotogoverno' (hidden government) comprising elements within the state machine, armed forces, political parties and big business.

Historically within the Italian state apparatus there have been fascist and extreme-right elements. In 1992, a parliamentary report into the Gladio, a NATO-backed secret paramilitary group inside the military, said that this was an "armed band" which had helped carry out the fascists "strategy of tension".

In Genoa, some of these elements clearly took the opportunity of a new right-wing government to attack the demonstrations and in particular, break-up the 21 July march,

'Post fascist'

THE 'POST-FASCIST' Deputy Prime Minister Fini suddenly went to Genoa to take command of security operations. That is not accidental. Neither was the fact that some of those illegally arrested in the Media Centre raid were forced to salute pictures of Mussolini and sing the fascist song Facetta Nera.

The Italian state acted to intimidate both the protesters and the Italian workers' movement. From the start of the 19 July immigrant rights march, the police were provocative, loading shells into their tear gas guns as soon as the demonstration started.

It became obvious that the Italian state's direct and indirect agents acted to ensure that clashes would develop on the next two days. The Genoa clashes have further polarised Italian society and deepened distrust of the government.

At first the Berlusconi government brushed aside concerns about illegal detentions and conditions of prisoners and imposed five-year entry bans on individuals who have not even been in court. But faced with mounting evidence of police brutality and illegal arrests the government transferred three police commanders, while still continuing their campaign to criminalise and intimidate opposition.

But this won't help the government, caught on the widening contradiction between its election promises and the developing economic slowdown.

Berlusconi's 'House of Liberty' coalition won the May election with pledges of cutting taxes, 1.5 million new jobs within five years, higher pensions and new infrastructure projects.

Almost immediately it had to start dampening down expectations, although it did rush through tax cuts for companies. Tax cuts for most people have been postponed until 2003 at the earliest and higher pensions may only go to those over 75. The 'House of Liberties' will be unable to fulfil its lavish election promises.

The EU is also demanding cuts as this year's budget deficit could amount to 2.6% of GDP, three times the 0.8% maximum allowed under the euro currency's stabilisation pact.

Many sections of the Italian capitalists have, at least for now, rallied behind Berlusconi's attempt to attack living standards. Already, before the developing US recession really hits Europe, Italy's economy is entering crisis.

In the year to May, industrial production fell 1.9%, wages rose by 2.7% but prices rose 3%. Real wages are already falling - one reason for the new mood developing among workers.

Workers' five-year experience of the 'Olive Tree' government, with wage restraint and Europe's largest privatisation programme, was the main reason for May's election result.

For 18 months the Prc leaders supported the Olive Tree's attacks on living standards. As the Prc paper, Liberazione, pointed out at the time: "We have voted for cuts amounting to 100,000 billion lira". This was a key factor in its lower vote in May.

The Prc now has another opportunity to build support but its leaders seem to be reluctant to try to build a fighting socialist opposition. The Prc's anti-globalisation material in Genoa did not directly attack capitalism or argue for a socialist alternative. It seems now the Prc leaders aim to try to build throughout Italy structures modelled on the World Social Forum held in Port Alegre (Brazil) last January and the Genoa Social Forum. Building broad support is necessary but if this is accompanied by dropping socialist policies, these movements will not be able to create their desire of "another world".

 

Turned back at the border

TINETTE SCHNATTERER, a CWO member from Germany, was sent back to Germany from a Genoa-bound coach. She reports:

WHEN THE CWI coach arrived at the Italian border, a group of policemen collected our passports. Although the coach was allowed to pass, I was told to leave the bus. Another CWI member wanted to accompany me, but he was not allowed.

They said the German Home Secretary had asked them not to let me enter Italy during the G8 summit. They took me to the border police station and told me to wait. They didn't know what to do with me at first. They then handed me a form and asked me to sign although it was in Italian which I can't read.

Until they brought me to the police station they spoke English very well, afterwards they pretended not to understand anything. I asked for a translator several times. They took political material out of my bag and photocopied it, saying they'll send it to the German Home Secretary. I refused to sign anything.

I was there for more than five hours and had to stand the whole time. When I tried to sit on my bag they raised me onto my feet and pushed me against the wall several times. I was not allowed to go to the toilet.

During the whole time the police officers made sexist remarks, underlined by gestures understandable by everybody. They put me in a police van and told me that I'd be arrested if I didn't sign the forms. After half an hour I was so tired that I signed one of the forms. They tried to frighten me into signing the other forms. Finally two policemen put me on a non-stop train to the German border. They paid the ticket with my money.

 

Straw’s enforced U-turn

FOREIGN SECRETARY Jack Straw did a U-turn on ltalian police brutality after battered protesters returned home. At first Downing Street insisted that the Italian police 'had a difficult job to do and did it'.

Now Straw says that he'll "press for a full explanation" and claims the Italian government had agreed to investigate police behaviour.

While demonstrators were still being tear-gassed and baton-charged, Blair was condemning them, saying: "We are the elected leaders, we have a right to meet."

The hypocritical G8 leaders denounce violence only when it suits them. Happily sitting in the G8 meeting was Putin, personally responsible for ordering the destruction of Grozny, the Chechen capital.

 

Socialists join worldwide protests

THE COMMITTEE for a Workers' international (CWI) had comrades in Genoa from 13 countries -- Belgium, Greece, Russia, Ukraine, Ireland, Sweden, Germany, France, USA, Spain, Austria and England and Wales.

CWI members have played an important part in protests on Genoa worldwide. In GREECE we're involved in a co-ordinating committee which organised many coaches. At the ferry terminal in Italy the police singled out three coaches carrying anyone involved in this committee for immediate deportation.

The demonstrators staged a sit-down protest until police dragged them onto the ferries and deported them. A Greek CWI member Christina helped to lead the sit-down. Film of her being dragged off was shown repeatedly on Greek national TV.

Even capitalist newspapers say Italy's police could only have known which coaches the coordinating committee were on if Greece's secret police gave them the names and addresses. The Italian government's ludicrous claim that weapons had been discovered on board the coaches caused outrage.

On the biggest, 5,000-strong, protest in Greece over 60 youth rallied behind the CWI's banner, over half of them non-members.

In the USA, CWI members intervened in a demo in San Francisco. 70-100 people protested at the Italian consulate at the killing of Carlo Giuliani. We also held a meeting on Genoa where 33 people showed up, and 17 signed up for more information.

At a public meeting in Seattle a member of the second largest Teamster Union local (branch) in the area agreed to join. CWI branches are organising public meetings in New York city and Boston.

In AUSTRIA, Socialist Left Party members sold hundreds of a special issue of their paper on three demonstrations. In Vienna 60 people attended a public meeting on Genoa.

In BELGIUM, the evening TV news interviewed two CWI members returning from Genoa. We organised a 100-strong protest at the Italian embassy and took part in a public debate at a Gent festival attended by 200.

We produced a pamphlet about Genoa and we're translating the CWI's 'Under Siege' into Dutch. International Resistance's website had an email from a shop steward at one of Antwerp's biggest chemical factories, saying he wanted to help us build support in the union to make sure that the working class doesn't get its children beaten up by police during the EU summit in Belgium this December.

In BRITAIN, a packed London Socialist Party meeting heard eyewitness reports and analysis of the Genoa protests. Many were attending their first Socialist Party meeting and people from Italy, Austria, Turkey, USA, Sweden, Denmark, Netherlands, and Germany were in the hall.

In FRANCE a placard from CWI supporters Gauche Revolutionnaire, calling for "international resistance" against globalisation appeared on national TV.

In GERMANY the new Resistance International youth movement called protests against police brutality. 500 attended in Hamburg and 100 in Bremen.

In Berlin, CWI members joined a demo of 600 on the Saturday where CWI member Marcus from Sweden, visiting Berlin, spoke. In Dresden we put up a spectacular protest banner on a bridge.

In NORTHERN IRELAND Socialist Youth held a successful public meeting in Belfast where over 50 people heard an eyewitness report and discussed how the movement needs to develop.

In SOUTHERN IRELAND Socialist Youth and Joe Higgins, Socialist Party TD (MP) issued a press statement condemning police violence and provocation and calling for "an end to live ammunition and lethal force in the EU".

Socialist Party members also organised a youth meeting where young people asked questions like "what's the difference between capitalism and neo-liberalism" and "what's your alternative"? That meeting agreed to set up a Socialist Youth Committee to build for the next big demo in Brussels. In Cork a Socialist Party meeting attracted 60-70 people.

In SWEDEN 800 took part in a solidarity demonstration in Stockholm. Per-Ake Westerlund from the CWI section linked the anti-capitalist movement with the anger against public spending cuts in Sweden.

 

What We Say Release all G8 protesters and drop any charges against them. Compensation for all those arrested or hospitalised. An independent inquiry into police actions with a commission of representatives of the Genova Social Forum, trade unions and workers’ parties and also people from the local Genoese community. Support the call for a protest general strike in Italy of at least 24 hours. Step up the fight for socialism – the only alternative to global capitalism.

 

 

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