Imperialism Exposed Again

The last 24 hours has seen the lies and duplicity of Imperialism exposed once again. Imperialism claimed it had started bombing Libya for humanitarian purposes, to prevent a slaughter of civilians in Benghazi. Long after that danger had ended it continued its massive bombing campaign against the country. It has launched something like 20,000 bombing runs against Libya using the latest high-tech bombs, planes, and Cruise Missiles. Such has been the extent of the bombing that Britain alone has spent approaching £300 million in the process. This, of course, at a time when the British Government is closing schools, hospitals, and attacking British workers living standards, because, we are told by the Tories, the British State is as broke as Greece!!!

The Imperialists have completely destroyed the infrastructure of Libya with the extent of their bombing. No doubt lagre construction companies from those same Imperialist states will be happy to make massive profits from rebuilding that infrastrcuture paid for on the broken backs of the Libyan workers. It has been widely reported that the Imperialists have been using depleted uranium munitions, and the poisonous effect of that, as it hangs in the air, and seeps into the water table will affect the Libyan people for generations to come. The whole process has been one of lies on a massive scale to match that of the devastation of Libya being inflicted by Imperialism.

The UN resolution, 1973, gave the Imperialists permission to protect civilians. Yet, from Day One, the Imperialist bombing campaign put far more lives in jeopardy than even the potential threat of a massacre in Benghazi, by Gaddafi represented. In fact, as I pointed out in my blog, Victory To Libya, Down With Gaddafi, Channel 4 News quoted Amnesty International and Human Rights Watch as saying,

“Now both Amnesty and Human Rights Watch say they’ve found no evidence in Libya to back up allegations used widely by politicians to justify the war.”

In fact, they went on to explain that the International Criminal Court had issued its warrants against members of the regime for crimes such as the use of rape without any evidence of its own whatsoever, and solely on the basis of what it had been told by the rebels.

These were the same rebels that other independent observers had themselves accused of committing war crimes, including the use of rape. But, as Channel 4's Alex Thompson reported,

“It’s war, people lie. In Benghazi Libyan rebels will tell beseiged Misrata is running short of food. You go there. The shops are open, reasonably well-stocked. The butchers’ stalls hung with freshly-slaughtered goats.

The Misratan rebels will tell you government forces have been issued with gas masks because they’re preparing to use chemical weapons. Again – lies, propaganda and rumour. No journalist in Misrata bothered to report this junk, even with appropriate attribition and caveats. We could see it for the paranoia it was.

Twas ever thus. Back in 1991 a rather younger A Thomson found himself debunking the propaganda lie that Saddam Hussein’s soldiers had ripped babies from incubators in Kuwait’s hospital.

Eventually it was all exposed as lies cooked up by a US PR firm contracted to the displaced Kuwaiti authorities.

So it goes on down the years. During the British invasion of Iraq the MoD spouted a series of lies about the actions of Iraqi forces in Basra. The Americans were doing much the same of course.

Never take anything on trust from a politician who has a war to justify should be the obvious rule of thumb for any journo – any person – in a time of war.”

And, so it proves again here too. On Sunday night, the rebel TNC were reporting that they had taken over all of Tripoli, and that Gaddafi's sons were in custody. That assertion was echoed by the International Criminal Court.

Surprise surprise, on Monday it appears that not only was Gaddafi's son, Muhammad not in the custody of the rebels, but the heir apparent, Saif Al Islam, pops up driving around Tripoli with thousands of Tripolitans apparently prepared to fight to defend the City! The International Criminal Court, we are told, is supposed to be a neutral international State body whose purpose is to bring international criminals to book. Yet, like the United Nations, it is shown to be just another tool for Imperialism to exercise its control over the globe.

A look at those that have been brought before it can easily be seen to be those who have been on the other side to the Imperialists in numerous conflicts. Most of those from the Balkans have, for example been Serbs, yet there were at least as many atrocities committed by Croatians, Albanians and others during that conflict. Such as the ethnic cleansing of Serbs by Croats in the Krajina.

In large part, of course, the Imperialists were on the side of these other forces. That is, of course, not to say that the Serbs brought before it were any friend of the working-class, or that they were not grotesques in their own right. It is to show that there is nothing impartial about Capitalist/Imperialist justice at an International level, anymore than there is at a national level. And, of course, the biggest international criminal, US Imperialism, which has been responsible for the deaths of millions of people throughout the globe, for dropping two nuclear bombs, killing tens of thousands of civilians in Japan, for dropping an even greater tonnage of bombs on Vietnam than was used in the whole of WWII, which used dioxin, in the form of Agent Orange, to defoliate and sterilise agriculture in Vietnam and so on does not recognise the ICC.

It is not prepared to allow any of its citizens to even have any risk of being dragged before it!

Gadaffi's regime is gone, whatever the events of the next few days have in store. But, it has gone not because of a Libyan revolution, but because of a massive military assault upon the country by Imperialism, with an assortment of rebels being used on the ground as a Fifth Column to move in to take ground only after massive bombing has cleared the way for them.

NATO complains that the regime has launched three SCUD missiles, but NATO has rained literally hundreds of Cruise Missiles down on the people of Libya. It is also clear that the Imperialists have had boots on the ground themselves for nearly all this time. Yesterday, when it looked like everything was over the Tory British Minister appeared smirking on camera, essentially admitting that British Special Forces had been in Tripoli organising things. (Edit: CNN are today reporting that Special Forces from Britain, France, Jordan and Qatar have been involved from the beginning in Libya, on the ground, and working alongside the rebels.) From day one, I pointed out that a no fly zone could not be applied unless that happened. It required Special Forces on the ground to laser tag targets and so on. For many months, Imperialism has been supplying the rebels with the latest high-tech weapons, and with training.

Despite that, for months, the Eastern rebels were unable to make any headway. (Edit - laughably on Newsnight on Tuesday the Libyan rebel spokesperson denied there had been any fighting from the South-West, claiming it had all come from the East, which is a sign of the conflicts to come, given that it was Western rebels that took Tripoli!)The break seems to have come after far more intensive bombing by Imperialism, and after the introduction of helicopters, and drones. After months of starving out the people of Tripoli, it would have been surprising if the people did not crack. Yet, the fact that a sizeable number of residents of Tripoli – that the regime felt confident enough in to have armed them over recent months – have stayed to fight, street to street against the rebels, shows the extent to which there is real opposition to those rebels.

As one commentator said it has similarities to the Battle of Algiers. Some of that is likely to be down to tribal loyalty, some down to the fact that many of them will be State employees whose livelihood has been guaranteed by the regime, and some of it down to the fact that many, whilst having no great liking of Gaddafi, are even more fearful of what might befall them under a rebel regime, whose nature remains uncertain, but whose character can probably be guessed at given the obvious extent to which the rebel fighters are dominated by jihadists, such as the Islamic Fighting Group, some of whose British fighters have been interviewed by British TV in Libya..

The extent of that is demonstrated by the Constitution drawn up by the TNC. Besides, spelling out its commitment to privatising Libya's State owned industries i.e. essentially Oil, it also menacingly states that Islamic Sharia Law will be the "principal source of legislation"!!!

Some months ago, in a discussion on Dave Ostler's blog I asked AWL supporter, Clive Bradley, how his concern for civilians would play out when the rebels arrived at Tripoli, and it was Tripolitan civilians whose lives were threatened. He had no answer, other than essentially to hope that no such conflict would arise. That depended upon swallowing the propaganda of Imperialism, and the rebels that they were really a bunch of Liberal Democrats, who only wanted to establish some western form of democracy! That, of course, is still the vision that Imperialism and the western media is still trying to portray!

In fact, what we see is a National Transitional Council that was essentially cobbled together by Sarkozy to give the idea that there was some kind of legitimate, alternative Government in waiting in Libya.

As I pointed out in my blog “Victory To Libya...” that was needed in order that Imperialism could deligitimise the Gaddafi Government so as to justify, its war against the country. Of course, the TNC itself is hardly a paragon of democratic virtue, not least because it has been elected by no one, not even the people of Benghazi!!! At least, the Bolsheviks could claim that they had been elected by a series of Soviets! In over six months, there appears to have been no attempt in Benghazi to establish any kind of functioning democracy, or democratic organs.

And there is a good reason for that. The political face of the TNC is made up of pretty unsavoury people themselves, and they are the more palatable elements. They are made up of former Gaddafi regime loyalists, reactionary tribal chiefs with an axe to grind and so on. Only the very public face, those who for at least months, and in some cases years, have had close contacts with EU Imperialism, particularly with France, can be presented as being some kind of Liberal democratic politicans. But, their problem is that they represent no one in Libya. That is why they could not, and have said they will not submit themselves for election.

It is a bit like what Trotsky said about the bourgeois politicians that the Stalinists sought to keep on board during the Spanish Civil War. They were a shadow, they represented nothing. The real social force, the real fighting forces opposing Gaddafi, are in fact made up of the jihadists, and some tribal elements who are looking after their own interests. That is why those jihadists murdered Younes, the rebel general.

This poses a significant problem for the TNC politicians. They are bourgeois politicans essentially without a Libyan bourgeoisie to represent! When Gaddafi's regime falls totally, as it surely will given the massive imperialist firepower ranged against it, the jihadists will no longer need those TNC politicians, whose only function for them has been to ensure that they obtained that Imperialist firepower. But, it is inconceivable that the Imperialists that have provided that military firepower for the jihadists, will then simply step back and allow them to take over. They will need those TNC politicans to invite them in as a “stabilising force”, or whatever title it is given, but whose real function will be to suppress the jihadists. That is when the real problems begin, as was seen in Iraq, Afghanistan and elsewhere.

Defend Libyan Workers

Gaddafi has gone. Good riddance. But, even the bourgeois media recognise that the reason the regime fell was due to the massive war effort waged by, particularly European, Imperialism against Libya. Despite months of heavy bombing by Imperialism, the Transitional National Council, that was created by France's Sarkozy, to give some semblance of an organised political alternative to the regime, was able to make very little military progress in moving forward from its stronghold in Benghazi.

When the final push into Tripoli came, it was not the forces of the TNC, from the East, who were successful, but the fighters from the West, who have closer tribal links with the people of Tripoli. Even then, their advance seems only to have been possible after NATO significantly increased its bombing of the Capital. It was inevitable that, given the massive firepower, of Imperialism, with something around 20,000 bombing raids undertaken, the people of Libya would not be able to resist, and would eventually decide to ally themselves with it, in order to save their own skins. The nature of the means by which the regime fell, the very obvious divisions, even within the TNC, let alone between the TNC, and other forces, now in control in Tripoli, from the West of the country, mean that a very dangerous situation has now been created. Some commentators have talked about a situation similar to Somalia, where the extent of internal divisions simply leads to a breakdown into chaos, as numerous competing factions – religious, social, geographic, and tribal – establish their own fiefdoms, and the country becomes torn apart as warlords carve out their own advantage. That seems probably unlikely. Libya is not Somalia.

But, as former White House spokesman, P.J. Crowley, told the BBC, nor is it Egypt or Tunisia. It lacks the basic social and political structures that those societies had, to act to hold the ring during a period of transition. The most likely scenario, and the one that Imperialism has been working towards, for most of the last six months, is that it will use the pretext of a descent into anarchy, to justify now putting its boots on the ground, establishing some form of Protectorate – though no doubt not described as that.

The lead role in that will for obvious reasons be taken by Europe, particularly by France. Libya has Africa's largest proven oil reserves. It has 3% of global proven oil reserves. More importantly, it is the quality of Libya's Light Sweet Crude that is significant. Its closest comparison is North Sea Brent Light Sweet Crude. This is the type of oil most commonly used in Europe. It requires far less processing than the West Texas Intermediate Oil more commonly used in the US. In the US, few cars use diesel, whereas in Europe – less so until recently in the UK – a large number of cars run on diesel, and Libyan Light Sweet Crude is perfect for producing diesel.

85% of Libyan oil goes to Europe. Until recently 30% went to Italy, due to its historical links with Libya. In part, France's role in leading calls for intervention was based upon supplanting Italy in Libya, and ensuring an increased role for French Capital in the country. That is why Sarkozy played such a role in creating the TNC. That will now most likely be repaid by the TNC, who, whilst they have said little about what they stand for, have made clear their intention to privatise all of Libya's state owned industries, which essentially means the oilfields, because pretty much all other Libyan industry is dependent upon the oil industry.

Workers should never be fooled into believing that industries owned by the State are somehow their industries, that they are in some way more socialistic than industries owned by private Capitalists.

They are not. In an oppressive State Capitalist economy like Libya that is even more apparent than in somewhere like Britain, where the rule of Capital is more cleverly hidden behind a facade of bourgeois democracy. But, that is not to say that workers should be indifferent to existing State owned industries being handed back to private capitalists. Whilst we recognise the Capitalist nature of State owned industries and enterprises, and recognise, therefore, their oppressive, and exploitative nature – and frequently their bureaucratic and, therefore, inefficient nature, our answer to that is not their return to private capitalists, but their transfer into the ownership and control of workers themselves, who can then run these industries and enterprises efficiently in their own interests, through the establishment of worker owned Co-operatives. Whatever other political divisions arise in Libya in the coming period, what we can guarantee, particularly given the utter devastation of the infrastructure of the country that months of intensive NATO bombing has wrought, is that large parts, probably the majority, of those that form the rebel forces, will be united in opposing the Libyan workers, and ensuring that it is those workers who will bear the brunt of the cost in rebuilding the economy, and ensuring that oil production, in particular, is quickly restored for the benefit of the Imperialists who have waged war for that end. Already, the news of Gaddafi's fall has seen Brent Light Sweet Crude drop by around 3%, on global markets, in anticipation of that.

As P.J. Crowley said, Libya is not Egypt or Tunisia, nor is it even Iraq. All of these latter were countries with sizeable populations, and relatively developed, industrial economies, with sizeable working-classes, and middle classes as a consequence. Libya is not. It has a very small population, and most of its economy is made up of oil. Even there, a lot of the workforce in the oil industry was foreign. In Iraq, despite its relatively long history, as an industrialised economy, the fall of Saddam Hussein saw the society fall into chaos. Not only were most of the social institutions for bourgeois democracy lacking, but some of those institutions such as the Trades Unions came under attack both from the internal bourgeoisie and from the Imperialist Occupation. That is inevitable.

Wherever, bourgeois democracy has been established, going back to Britain in the 18th and 19th century, workers are effectively excluded from the process until such time as the bourgeoisie has secured stable political power for itself. Only then, when it feels secure is it prepared to allow workers even the illusion that they have some ability to make effective changes via the ballot the box, whereas in fact, as Engels long ago pointed out, all they are doing is acting as voting fodder for the bourgeoisie in securing its political dominance over more reactionary class interests. As Lenin put it in State and Revolution,

“A democratic republic is the best possible political shell for capitalism, and, therefore, once capital has gained possession of this very best shell (through the Palchinskys, Chernovs, Tseretelis and Co.), it establishes its power so securely, so firmly, that no change of persons, institutions or parties in the bourgeois-democratic republic can shake it.”

Yet, even in Iraq, the collapse of the centralised State power of Saddam's regime, that had played the normal role of such a Bonapartist State, in holding together competing social forces, saw the outbreak of those very social forces into open warfare. Even within the single religion of Islam, the competing sects of Shia and Sunni, soon erupted into sectarian conflict. With the working-class organisations, that had been suppressed for years under Saddam, still attempting to organise themselves in the face of opposition from the Occupation and the Iraqi bourgeoisie, the interests of the unorganised workers, the urban poor, and of the small bourgeois were represented by the forces of Sadr, as a kind of Jacobin force.

It too, was then suppressed by the forces of the Iraqi bourgeoisie, and its Imperialist allies. Yet, even then, and with massive military power resident in the country, it appeared that these conflicts were not containable within the confines of even the corrupt, and heavily circumscribed bourgeois democracy that was being developed. So much so that the US, once again looked to the possibility of simply installing another Saddam-like strongman. And, now nearly ten years on, Iraq still has no real functioning democracy, and sectarian conflicts are on the rise once more, with the main beneficiary seeming to be increasingly Iran, though China also seems to be using its economic muscle to buy into the Iraqi economy.

In Tunisia, and Egypt, six months after popular revolts resulted in the established Bonaparte being replaced by the Military Juntas that had, in any case, always stood behind them, there seems little progress towards democracy.

In Egypt, the military is once more out on the streets attacking protesters, and strikers. In a country with little in the way of sectarian violence over recent decades, the rise of Political Islam is also being mirrored in sectarian attacks on Christians. Where socialists worried about the potential for the Muslim Brotherhood to use its existing organisational base to take advantage of the situation, in fact, recent reports suggest that it is more militant, more extreme Islamist organisations than the Brotherhood, who are now mobilising tens of thousands of people on to the streets.

If that is the case in these societies where the material conditions for the development of a functioning democracy are more conducive, what problems are there likely to be in that respect in Libya? In short, on top of the inevitable attacks that Libyan workers will face, in the process of Capital seeking to exploit them, in order to step up its search for profit, the Libyan workers will face, probably, more immediate and existential threats, in the coming months.

Already, the divisions within the TNC have been laid bare by the recent assassination of one of its military leaders, by Islamist elements. It has long been known that these Islamist elements have made up a large part of the actual fighting force, certainly from the East. Many of them are the same jihadists who went from Libya to make up a majority of the foreign fighters in Iraq. They have allowed the TNC leaders to be the public face of the rebels in order to ensure the backing of Imperialism, but ultimately, to quote Mao, “Power comes from the barrel of a gun.” Unfortunately, for them, as they have just seen, Imperialism has far more, and far more powerful guns.

On top of that, it is not the Eastern rebels who have taken Tripoli, but those from the West. Libya was originally three countries with the two largest having their centres in Tripoli and Benghazi respectively. It is not at all unlikely that these historical, and tribal divisions will once again break out, possibly as symptoms of other, economic, social and political divisions and conflicts of interest. In the context of a lack of any kind of democratic or administrative structures that can be a highly dangerous situation.

This is not like say 1917 in Russia, where a series of organs already established within civil society, on top of which were then established new “democratic” organs such as the Soviets, which could begin fairly quickly to exercise some kind of democratic control, and carry out administrative functions. That is, in part, a consequence of the regime falling mainly due to NATO bombing rather than the overwhelming social power of the rebel forces, which would otherwise have had to create those kinds of bodies if it was to carry through a successful revolution.

What we are likely to see now is that those political leaders of the TNC, put in place by Sarkozy and European Imperialism, will use the links they have established over the last few months and years, and their more public profile and access to the global media, to demand that Imperialism puts boots on the ground to hold the ring, not as fighting forces, but merely, of course, in a humanitarian and administrative capacity, to help establish the necessary institutions of Civil Society. In reality, of course, the function will be to provide the repressive State apparatus that those political leaders lack, in order to suppress their political opponents, be they in the working-class and urban poor, or competing tribal interests from the West, or indeed, from the Islamists within the ranks of the Eastern rebels, who will otherwise, probably be able to fill the power vacuum with their own guns, organisation and ideology.

Trotsky said that Marxists have to tell the truth even when it is unpalatable.

The unpalatable truth is that the conditions in Libya are not particularly conducive for the interests of the Libyan workers. They are a small, largely unorganised force. In the Civil war, that has raged for the last six months, it has been other social forces, and primarily their class enemies who have played the leading role. Unlike Egypyt, Libya does not have a sizeable, developed, industrial economy, conducive to the development, organisation and economic advance of the working-class. The dominant social forces in Libya, have powerful links with external forces – Imperialism in the case of the TNC leaders, Political Islam in the case of many of the Eastern fighters. The Libyan workers have little in the way of international allies. Indeed, many of those internationally who should be its allies already threw in their lot with the enemies of the Libyan workers, the Imperialists, as part of a “My enemies enemy is my friend” approach to getting rid of Gaddafi. Bearing that in mind, we have to do what we can to try to defend the Libyan workers against the attacks that will undoubtedly be waged against them in coming days, weeks and months. It is important, to demand that the Imperialists keep out of Libya under whatever pretext they might raise. Workers in Europe, should attempt to make direct links with the Libyan workers, and offer to provide, money, guns, and whatever assistance they require to defend themselves.

The Libyan workers within the oilfields, should immediately seek to occupy them, and to spread such occupation to other related industries, restarting production under Workers Control. It is vital that the workers seek support amongst the ranks of the Urban poor in the main cities, making clear the case that now they must ensure that the countries vast oil wealth be used to further the interests of the majority of the Libyan people not the benefit of a rich few, and their political representatives on the TNC.

It is also vital that the Libyan workers make direct links with their more numerous, and more powerful, brothers and sisters within the Egyptian, and Tunisian working class, beginning to develop a single working-class across North Africa, capable of fighting together for its interests, and for real democratic freedoms.

It is important that the workers in Egypt and Tunisia recognise those shared interests too, and that they are not diverted by the illusion of bourgeois democracy, less still by the continued rule of the Generals. The workers also have to look to the experience of workers in Iran, to see that Political Islam can offer them no solution to their problems either. If anything the workers in Iran have been thrown backwards even from the rule of the Shah, by the Medievalist, Theocratic revolution there. At least the Shah was carrying through the role of a traditional Bonapartist, by modernising the Iranian economy.

The Mullahs have presided over a period of social reaction, taking the society back towards the kinds of mysticism of the Middle Ages. The economy has consequently and inevitably stagnated, with workers bearing the brunt, and facing huge repression by the Islamist State. The only area of technology that the ruling Mullahs seem to have shown interest in developing is that needed to create their own nuclear bomb.

Given the influence even in Egypt, however, of these reactionary, Islamist forces, it has to be admitted openly that the Libyan – and indeed Egyptian – workers face extreme dangers and threats in the coming period. In the last few days, the Israeli regime has once more begun to launch murderous attacks on the people of Gaza, seemingly to distract attention, and rally people around the flag, from the growing social protests by Israelis themselves against the economic and social crisis in Israel.

It has also shot a number of Egyptian police on the border. With the potential for similar responses by the Syrian regime, seeking to rally Arab anger at Israel, as a similar diversion, and with Iran seeking to take advantage of social unrest in Bahrain and other Gulf States, as well as an eruption of the same dispute between Iraq and Kuwait that led to Iraq's invasion of Kuwait back in 1990, the potential for widespread conflicts within the region are increasing by the day.

The forces of the international Labour Movement are very weak and disorganised to be able to respond to events in an increasingly volatile and dangerous global environment. The fact that sections of the Left have abetted that situation over a long period by essentially accepting that weakness, and looking to the forces of the bourgeois state, or other reactionary social forces, as a replacement has made things worse. We have to quickly begin to reverse that situation, and insist on extreme revolutionary opposition to the bourgeoisie and its state in all its forms, and begin to develop an independent, self-reliant working class, able to stand on its own feet, and fight for its own interests.

Northern Soul Classics - Sweet & Easy - VanMcCoy Strings

Continuing with the Summer of '72 tapes. This is a classic instrumental from the Torch days. Van McCoy, is, of course, well known for his disco hit, "The Hustle", but amongst Northern Soul fans he's better known for being the instrumental driving force behind numerous classics, like last week's from Gene Chandler.

Credit Crunch 2? No, Credit Crunch 2!

A couple of weeks ago I wrote a blog asking the question Credit Crunch 2?. I have been holding back from answering that question in the affirmative. I think I'm now ready to do so. As yet, we are not at the position we were when the Credit Crunch really crunched in 2008.

That is the rates that Banks charge each other in the short term, overnight borrowing, the so called LIBOR (London Interbank Overnight Rate), and EURIBOR (European Interbank Overnight Rate) market have not yet soared to the levels they did then, when fear that lenders might go bust, and each bank sought to hoard whatever cash it could, essentially brought such lending to an end – which is what a Credit Crunch is. But, there are reasons for that.

Firstly, that seizing up of lending did not occur overnight, back in 2008. The process had begun, in fact, in 2007. That was what caused Northern Rock to go bust.

In response to that, the Bank of England, and other Central Banks, began to pump additional liquidity into the market. They thought they had done enough, but the complexity of modern, global financial markets, and the severity of the crisis, that was caused when the sub-prime crisis struck, was such that it found the state authorities wanting. When the US Authorities allowed Lehman Brothers to go bust, that was enough to send those financial markets into cardiac arrest, as the size of its counter-party risk – the amount of loans it had made, and taken out – meant that a huge black hole was created, in which there was a complete lack of knowledge as to how much money might be simply wiped off the Balance Sheets of other Banks, and Financial Institutions, with a consequent domino effect to all those institutions that these Banks and Finance Houses had in turn with others.

But, in the aftermath of Lehman's and the Crunch, new measures were put in place to ensure that Banks in trouble could go to the Central Bank and obtain funding to prevent a similar collapse. In addition, Banks in the US and Europe were first recapitalised, by the State bailing them out – effectively nationalising them – and then required to bolster their Balance Sheets by raising additional Capital, and ploughing back profits into assets, to raise their proportion in relation to their Liabilities.

More recently, a new set of regulations, known as Basle III, have made it necessary for Banks to have even stronger Balance Sheets, in order to weather a new crisis. Finally, the Banks were then stress tested, to see which Banks had the necessary resources to weather another serious crisis. In addition, in the last few months, many Banks have restructured their Balance Sheets, so that they have exchanged shorter duration loans, with longer duration borrowing, so that their cash position has been bolstered.

All of these measures mean that Banks are not in the same position that they were in 2008. But, that is not the end of the story. Back in 2008, in my blog Where We're Going, I wrote that the potential was that by States stepping in to essentially take over their Banks, the same problem could re-appear, but now raised to the level of the relations between States.

That is essentially what we have seen in relation to the Eurozone Debt Crisis. That was most clearly seen in relation to Ireland, where the State's finances were not initially that bad prior to stepping in to bail-out the Irish Banks. The consequence was that the Irish State was then put in a position where its debts were so large compared to its potential to repay them, because its growth rate was not sufficient given the size of its economy to create the extra income to do so, that its creditors began to wonder whether they would get repaid. Given the fact, that Ireland has acted like a huge Bank Clearing house, or money laundering operation for European Banks, which have passed vast amounts through it, the potential for a major catastrophe if Ireland or its banks defaulted, became obvious. That was then repeated across all those other European peripheral economies such as Portugal and Greece, and then to the not so peripheral economies of Spain and Italy, as questions about the health of their Banks, and the ability of their economies to grow sufficiently to repay their debts began to be asked.

The reality as I argued in my blog What The Markets Are Telling Us is that what has sent the global markets into a tailspin over recent weeks is not a concern over debt – which is the narrative the Liberal-Tories wish to pursue, and which much of the media parrots – but a concern over growth. No one seriously doubted that the US would default on its debt, given that it could print money to cover it, which is why even after S&P downgraded its Credit Rating to AA+, demand for its Bonds kept rising. In fact, today demand for the US 10 Year Treasury rose so much that the yield on it fell below 2%, a figure that is the lowest it has been since the Eisenhower years, with many traders seeing it going down to test the 1.6% level of the 1940's! And, although the debt of the EU peripheral economies is a crisis for them, it is not significant in EU terms. Taken as a whole the EU debt to GDP ratio is much lower than in the US. No, the real concern is that the austerity measures being adopted forced on the peripheral economies, has sent their economies into a death spiral. That has two major consequences.

Firstly, it means that they are even more likely to default on their debts, which in turn means other EU countries – Germany and France – having to bail them out even further. Secondly, it means that these markets demand for goods from elsewhere in the EU – i.e. Germany – also falls dramatically.

Germany benefits hugely from the Eurozone. If Germany were not in the EU, then its currency would be much higher than the Euro. That would make German exports far less competitive. Since WWII, the German economy – at least initially West German economy – has been built upon exports. Until a few months ago when it was overtaken by China, Germany remained the world's leading exporter. But, more than that. If Germany benefits from a lower valued Euro on global markets, it benefits even more in terms of its exports WITHIN the Eurozone itself. If all Eurozone economies had their own currencies, then the currencies of Spain, Ireland, Portugal, Italy, Greece etc. would be much lower. German exports to these economies would be even more expensive. Given that the whole purpose of building a single European market and economy, was to develop the economic ties of investment and trade that already existed, and given that the vast majority of trade of all EU countries now occurs within the EU, the consequences of that for the German economy are immense. That is why ultimately, Germany will not let the Euro fail, and why it will do what is necessary to maintain the Eurozone.

However, just as the threat of a US default on its debt a couple of weeks ago was a wholly avoidable one, which only arose due to the wrangling and seeking of advantage by US politicians – most insanely by the Tea Party Taliban – so the crisis in Europe drags on for similar reasons.

On Tuesday, Merkel and Sarkozy, disappointed markets by saying that the issue of EU Bonds was not on the table. But, every serious economist knows that the answer to the the Euro debt crisis lies with such a solution. There are essentially just thee ways that the debt of the periphery can be dealt with – I'm not counting the solution whereby these economies pay off their debts themselves, because that is in reality not possible.

One solution, and the one that is being pursued at the moment, is that the ECB can keep buying up that debt in the secondary markets. That can only be a short term solution lasting perhaps months at most. For now, the ECB is saying that it will sterilise any such purchases by taking money out of the system elsewhere. That in itself could cause problems, because if its purchase of peripheral debt is sizeable, then it means seriously tightening monetary policy elsewhere in the Eurozone. That at a time when it is already tightening monetary policy by raising its Discount Rate, and at a time when the EU economy is already slowing down, could tip those EU economies that were growing back into recession, or at least very slow growth. But, if the ECB does not do that, if it simply buys this debt by printing more money, then this will mean that it will have joined the the Federal Reserve, and Bank of England in, Quantative Easing. It will mean that it will have abandoned its inflation, and monetary targets. Global Capital Markets will respond to that, by pushing down the value of all EU debt – raising interest rates in general – and pushing down the value of the Euro.

Moreover, because the ECB is not like any other Central Bank, in that it does not have a State standing behind it, it is not clear on what basis this money printing could be justified. If markets felt that the ECB's Balance Sheet had become overextended – i.e. it had lent money in return for Bonds which themselves had no value, because the Governments that issued them defaulted on them – then markets would begin to challenge the position of the ECB itself. The Euro could go into a death spiral. Already, in the short term a conflict is arising, because in search of a safe haven, money has been flooding into the Swiss Franc, which has soared in value. Given the economic ties between Switzerland and the EU, this is causing huge problems for Switzerland. Its exports have become increasingly uncompetitive due to the exchange rate, whilst various rules prevent Switzerland's producers from benefiting from lower input costs. Its possible that this weekend Switzerland will peg the Franc to the Euro, meaning that it will then have to print masses of money in order to lower its value.

Some months ago the Brazilian Finance Minister said that countries were engaged in a currency war, each trying to reduce the value of their currency in order to obtain competitive advantage. That process seems to be intensifying. That is one reason that Gold is increasing in price.

The second solution, is for the periphery to be bailed out by the EU version of the IMF – the EFSF, and EFSM mechanisms. That has already been done to help bail-out Greece, Ireland, and Portugal. But, the funds of the EFSF and EFSM come from other Eurozone economies. Spain and Italy for example, have had to contribute to the bail-outs. But, that means that there own fiscal position is worsened, and now these economies too have come under attack by the global Capital Markets. The more countries need bailing out the smaller the base of economies that are asked to bail them out, and the greater the contribution they have to make. Because these contributions come out of the Budgets of the respective states, in essence what is happening is that the taxpayers of these economies are having to bail-out the other Eurozone economies. Not surprisingly, those taxpayers are not happy about doing that, especially as in Germany the other side to that equation – the fact that they have benefited from being able to export to those economies etc – has not been shouted from the rooftops.

Given that all of these economies are bourgeois democracies, and politicians have to get elected, its not surprising that Angela Merkel does not want to be seen as too eager to bail-out the periphery with German taxpayers money. In Finland, the rise of the ultra-Nationalist Tru Finns, has made such a solution even more difficult. Today Finland, followed by Austria, has demanded that Greece put up collateral in the form of land and other assets as a condition for it agreeing even to the bail-out negotiated a few weeks ago!

The bigger problem is that the EFSF and EFSM have only €440 billion of resources to cover the potential debts. But, the total debts of the peripherals, and of Spain and Italy, comes to €7.5 Trillion. And, as I pointed out in my blog The Debt Crisis, to deal with the debt properly by wiping off sufficient debt, and restructuring EU Capital to be globally competitive, could cost up to €15 trillion over ten years. Its simply not credible that such sums could or would be provided as transfer payments from Germany and other Northern European economies. In reality, such kinds of sums could only be raised by borrowing on Global Capital Markets via an EU Bond.

However, Merkel and Sarkozy say such a solution is not on the table. But, behind that statement lies another truth. What they are really saying is, such a solution is not on the table so long as there is not Fiscal and Political Union, so long as there is no central state authority, no means of centrally controlling the Budgets of member states. Just as with the Debt Ceiling crisis in the US, what we have is a game of political chicken. The peripheral economies know that Germany, in particular, but also France, cannot allow the Eurozone to fall apart, for the reasons set out above. That gives them a bargaining chip to demand transfer payments from those economies. But, the economic and political whip hand remains with Germany and the other core economies.

If the peripheral economies bluff was called and they were ejected from the EU, or even just the Eurozone, their economies would go into melt down, the living standards of their people would collapse, and they would face severe social unrest. Therefore, ultimately, they will have to submit to the idea of fiscal and political union, and with giving up their own sovereignty to what will essentially be an EU State, at least in respect of their economic policy. In Britain, the Tories apparently understand that. They have said that if the Eurozone countries wish to establish such a fiscal union they will not oppose it. They just don't want to belong to it themselves.

This is the backdrop to the current situation. Ultimately, the backdrop to the developing Credit Crunch in Europe, is the economic crisis that is developing as a result of the economic policies of austerity that are being pursued. And those policies essentially flow from a political crisis within Europe. What is making that worse is the particular conjuncture. After 2008, the Keynesian fiscal expansion undertaken in the US, Britain, and Europe had succeeded in bringing the collapse to an end, and restarting growth.

For at least the last 30 years, the global economy has experienced short run economic cycles of around three years in duration. That seems highly correlated to the technology upgrade cycle. That is not to say that every three years there is a recession. It is to say that every three years there is an economic slowdown. The last coincided with, and accentuated the crisis of 2008/9. That means that a new downturn would have been due, in any case towards the end of 2011, beginning of 2012.

Had, the policies of fiscal expansion remained in place, then we would have expected to see the recovery gather pace throughout 2010 and 2011, before the cycle brought a slow down at the end of this year. However, the talking down of the UK economy last year, and then the austerity Budgets of 2010 and 2011, already brought the recovery here to a halt by the middle of last year.

Its now clear that the UK economy is careering to disaster, as the slow down in growth has accelerated, and now unemployment is rising sharply. That before, the Cuts really start, and before the Housing Market collapses. The same is true in those peripheral economies, and in Spain and Italy, where similar austerity has been introduced. The new cyclical slow down coming into those conditions, and with increasing tightness in credit markets threatens to send Western Europe and the US into a serious crisis, with political leadership ideologically committed to policies which can only worsen that situation. That is why global Stock Markets have collapsed over the last couple of weeks. They are not worried about debt, but about a coming serious recession, which will make repayment of that debt less likely, and will make the extraction of profits far more difficult.

The extent of that can be seen in the flood of money out of risky assets such as shares, and into safe havens. That is why the dollar has risen. It is why money has flooded into US Treasuries. It is why it has flooded into Swiss Francs and into Gold.

In fact, the search for relative safety has been such that the US Bank, Bank of New York Mellon, has started charging people to deposit money with it!!! In other words, people are prepared to pay to put their money somewhere, where they will earn no interest, but where they think that at least they will not lose a big chunk of it. That is the extent of fear, and the degree that already we are seeing cash being hoarded. It is a fundamental element of a developing Credit Crunch.

When I asked the question “Credit Crunch 2?” the other week, I argued that one reason for me believing that might be happening was a sudden fall in the price of Gold, which seemed to be possibly due to Banks and Financial Institutions having to sell holdings to raise cash. In the days following that, my suspicion was verified. It was reported that a number of large Hedge Funds had been forced to sell Gold to raise cash. Today, CNBC reported that the ECB had made an emergency loan of €500 million to a Eurozone Bank. This comes on top of stories that Banks in Asia were pulling money from European Banks, and either refusing to lend, or were only doing so in smaller sums, and at higher rates. CNBC have also reported that the New York Federal Reserve has been scrutinising the European operations of US Banks, because it is concerned that should they get into trouble, they might drain resources from their US operations to cover themselves, thereby causing a shortage of credit, and counter-party risk in the US.

In short, there is a growing tightening of credit on a number of fronts, under conditions of growing global fear in markets. A part of that was reflected in some very volatile exchanges between CNBC reporters today, as markets once again crashed.

In particular, Jim Cramer, who gained overnight infamy back in 2008, when he said it was safe to keep money in Bear Stearns, just before it collapsed, was keen not to fail to point to similar conditions today, particularly in Europe. He was echoing others who have been describing current conditions as another “Lehman Moment”. This brought a fierce response from Simon Hobbs, a British journalist now working on US CNBC, who emphasised that the ECB and other Central Banks and Governments would not let a major European Bank go to the wall as happened with Lehman's. May be not, but that does not mean that another Credit Crunch is not already developing. It does not mean that the “Merkelling” we have seen from European politicians, who have repeatedly failed to take the measures necessary, or even to begin to argue openly for those policies for fear of their own electoral prospects, will not continue until the crisis breaks out into the open, by which time it will not just be Banks that will require rescuing but entire economies, and not just limited to the periphery, but extending into Spain, Italy, and even possibly France itself.

Stand Up, Say It Loud; I'm Working Class And I'm Proud

When I left school, I went to work for my local Council. They sent me to College on Day Release to do a course called “Public Administration”. One of the subjects was Sociology. About the only thing I can remember from it, was to do with class. It repeated the subjective, bourgeois sociological view that we are all Middle-Class now, because we all have nice homes, a car, take foreign holidays, and so on (this was back in 1970). I remember making the point, which the slightly Left of centre lecturer took on board, that maybe the opposite was true. Maybe it meant we were all now working-class.

After all, many of the vocations that in Marx's time would have been considered middle class, such as teaching, office work and so on, no longer had the prestige they once did, the workers who did them, were in trades unions and so on. But, of course, there have been repeated attempts to argue either that the working-class does not exist, or that it has become embourgeoisified. In the US, working-class is a term that virtually does not exist. Ordinary working-class people there are routinely termed “middle-class”. If anything, in the US, working-class is ironically used as a term to describe those who do not work, the chronically unemployed, and urban poor. Similarly, when John Prescott did a TV series a while ago on the issue of class, he came across the young unemployed woman, living on a council estate, who believed she must be middle class, because, she reasoned, she couldn't be working-class given that she didn't work!

The embourgeoisement thesis originated in the US. It was also introduced into the UK in the 1960's by Richard Rose, and Mark Alexander Abrams in their book, “Must Labour Lose?” The notion was fairly comprehensively disproved by J.H. Goldthorpe in his work “The Affluent Worker In The Class Structure”.  Goldthorpe et al looked at some of the most affluent workers in Britain, those employed at the Cowley car factory. He demonstrated that their higher wages and status had no meaningful effect on their class affiliation, or political support for Labour.

However, developments in the last forty years, and in particular the development of what Shirley Williams and others have described as an “under class” - what Marx termed the Lumpen Proletariat – made up of the chronically unemployed, and unemployable, those existing on the margins of paid work in perpetual casual work (frequently within the Black Economy), involved in petty crime etc., give reason to question the relation of this group to the working-class itself.

The riots of last week, give particular reason for such an investigation, and to examine how socialists should relate to this section of society, and how immediate practical solutions to its problems might be developed.

Most of the off-the-peg solutions put forward by Liberals, and by most sections of the Left rely on platitudes, and the repetition of past failed solutions. They hinge around calls for the capitalist state to intervene, which in many ways are just the other side of the coin to those put forward by the conservative and reactionary politicians. The latter see the answer lying with the capitalist ctate in the form of a strong state response through more and tougher policing, harsher gaol sentences and so on, whilst the former show an equal amount of faith in that capitalist ctate to provide a solution through redistributive tax policies, the provision of additional Welfare Benefits, or increased Public Expenditure in various forms.

Neither, of these solutions offers anything in the way of an independent, working-class solution. Both reinforce, the idea of working-class subordination to Capital. The conservative/reactionary position does so by stressing repression, and the need for these sections of society to get a job, any job, at whatever pay or conditions, and for the need to reduce benefits to encourage that. The Liberal/Left position implies that workers are by nature dependent on capital – either private capital or state capital – and that all they can do is to make impassioned pleas to it, rather like Oliver Twist asking the Beadle for more gruel, to ease their plight.

It suggests that workers can only work, if capital allows them to do so. That may be true if we take the capitalist system as a whole, but, of course, the whole point about a Marxist response, is that we do not accept that state of affairs as being natural or eternal, and seek to challenge it, thereby challenging capital, and the capital-labour relation in the process of doing so.

The whole point of a Marxist strategy, here and now, is not to act in ways which reinforce and reproduce the dependence of labour upon capital, but to seek to subvert that relation and that dependency, including the crippling dependency of these groups in particular on the capitalist state. In so doing, our task is to also enable the working-class to get up off its knees, to fill it with class pride, as a necessary step in the process of developing a revolutionary class consciousness.

It requires a sharp break with some of the Lassallean/Fabian ideas that have dominated the Labour Movement for more than a century.

In previous posts I have demonstrated how, as Engels had pointed out, by the end of the 19th Century, Big Capital dominated, and had established as its method of domination an essentially social-democratic consensus. In the shape of Fordism, this came to be the dominant regime of Capital Accumulation, particularly after WWII. Its basis was the idea that workers would be bought off for enduring boring jobs, by being provided with steadily rising real wages made possible by the ever rising levels of productivity that Fordist production techniques brought with them. It was manifest in the idea of “mutuality” embodied in Trades Union Collective Bargaining agreements, particularly in the car industry. But, alongside this also went the development of the Welfare State, which acted in a similar way to buy off workers via a social wage, whilst ensuring that Capital got the reproduction of the kind of labour-power it required.

In many ways that also fitted with the ideas of “scientific-management” put forward by the Taylorists, whose ideas were necessary for the implementation of Fordist production methods. Taylor had recognised the advantages of planning as he witnessed it in the USSR – in return, Lenin (as well as Gramsci), also sought to employ Taylorist techniques in the USSR – though he was an opponent of Communism. Taylor sought to introduce these planning ideas into the factory, in place of the ad hoc methods of the existing management. But, it was not long before the Taylorists also recognised that what was good for the factory also applied to society as a whole.

The Welfare State, and other forms of intervention by the capitalist state fitted well with their ideas, and before long the trades unions sought to use the Taylorists criticisms of bad managements to demand a greater say in management, and particularly to raise the idea of trades unions involvement in national planning. In this way the trades unions were easily incorporated into this relation by which the subordination of labour to capital was effected, with the workers being bought off.

In the 1920's followers of Taylor such as Tugwell, as well as other Liberals such as Hobson, had warned that the excess profitability caused by Fordism, and Taylorist methods would result in a crisis. Their ideas chimed perfectly with those of Keynes for the capitalist state to intervene in this process, and for increased state planning of the economy.

In the US, Stuart Chase, in his book, “A New Deal”, which provided the name used by Roosevelt, argued “Why should the Russians have all the fun of remaking a world?” Roosevelt's programme was emblematic of this social-democratic consensus around, which big capital was creating a new regime of accumulation. Werner Bonefield, argues,

“Thus, the specifically Fordist form of the state is the Keynesian corporatist, statist, welfare state (Esser/Hirsch/Roth) which, in the long run, was transformed into the Fordist social security state (Hirsch, 1980; 1983b)”

See: “Reformulation of State Theory” in Capital & Class 33, Winter 1987.

As he says, the means by which the Fordist, capitalist state, achieves this is by infiltrating into every aspect of social life.

I wish to argue that a socialist strategy cannot be based around accepting that role of the capitalist state, but can only be based around developing a truly independent working-class, organising to stand on its own two feet, in militant opposition to that state, and cutting itself free from all dependence upon it. I intend to argue that a look at some of the lessons of the Black Power Movement in the US in the 1960's, and 1970's can provide some lessons for how that can be achieved, as well as pointing to some of the mistakes that need to be avoided.

James Brown's “I'm Black & I'm Proud” was emblematic of that idea of Black Pride, and empowerment. In the lyrics, he talks about black people having worked for someone else for too long, but he also goes on to talk about self-empowerment, a theme also covered in his song “I Don't Want Nobody To Give Me Nothing (Open Up The Door I'll Get It Myself)".  In fact, many of the ideas go back to those of Marcus Garvey, who argued that there should be a separate state for blacks in the US, so that they could build their own self-reliance on the basis of self-determination.

That idea is also covered in another song from the time by Brown, “Funky President”, in which he talks about the idea of getting some land, so that they could “raise our food, like the Man”.

By the 1960's, the idea of a separate Black State in the US, was a reactionary demand. By that time blacks had become a powerful, integrated element of the US working class. Despite the massive racism they faced, seeking to divide the working-class in that way, would have been a backward step, as, in fact, the history since that time has demonstrated.

In the 1930's, many blacks did have “some land”, but only on the basis of Sharecropping, which essentially reduced them to the state of a medieval peasant, and worse given the huge debt burdens they faced. That demand in Brown's song should not be taken, then, too literally. It merely signified the idea of building up black businesses, and independence from “The Man” i.e. the predominantly white capitalist class.

But, as Stokely Carmichael, pointed out, that would not be sufficient, it also meant building up a Black political force too, that could advocate their needs. And whilst Carmichael advocated nationalism, others such as the Black Panthers did not.

Bobby Seale, argued that the oppression of black people was more of a result of economic exploitation than anything innately racist. In his book "Seize the Time", he states that,

"In our view it is a class struggle between the massive proletarian working class and the small, minority ruling class.

Working-class people of all colours must unite against the exploitative, oppressive ruling class. So let me emphasize again -- we believe our fight is a class struggle and not a race struggle."

But, as Marx had long before demonstrated the only way to truly change that condition of exploitation was by workers themselves becoming the owners of the means of production. Any hope of changing that situation without doing that by, for example, attempting to redistribute via the tax and benefits system was doomed to failure. Not only is there no reason why a capitalist state would do that, other than by redistributing within the working-class and middle-class, but any attempt by, say, a Left Government, would simply result in capital slowing down its rate of accumulation, replacing labour with machines etc. - or simply locating to some other country – thereby raising unemployment, reducing the demand for labour-power, with a consequent fall in wages, and redistribution back to capital.

Marx's solution was for workers to set up co-operatives where they could, but to also develop their own party to represent their political interests as capital fought to limit the role of the Workers' Co-operative property. Ultimately, as this class struggle between workers property, and capitalist property became ever more open and transparent as a political struggle, the workers would be forced to assume political power themselves, thereby opening up the road to the gradual transformation of the entire economy into a Worker Owned Co-operative Commonwealth.

As part of the Black Power movement in the US, the ideas contained in Brown's songs, and in the ideas of the movement about Black empowerment, pride, and self-determination became reflected in a growing movement within Black communities to develop black businesses, and to find both workers and consumers for those businesses from within the Black community itself.

The extent of the success of that can be seen by the fact that, as this article points out, there are now over a million Black businesses in the US, with $100 billion in sales. It says, Black GDP, in the US, now stands at $1 trillion.

But, the weakness is obvious. The majority of these Black businesses, having been formed, at least in part, in opposition to “The Man”, simply became "The Man" with a black face. They were set up as black, private capitalist enterprises, and so to the extent that they became successful they simply replicated the Capital-Labour relation of white capitalism. As Seale had pointed out, it was not racism that stood behind the exploitation of Blacks, but capitalism. Some Black co-operatives were established, but without being part of a wider co-operative movement, capable of providing access to capital, of enabling extended trade within a growing co-operative sector, and of facilitating production on a large enough scale, they would always be susceptible to falling to the fate of all small businesses trying to compete in a hostile capitalist environment.

But, Black Power, did succeed in raising awareness within the Black community, and of instilling some sense of the idea “I'm Black, And I'm Proud”. Even if all too grimly, today, a large number of Black people – now joined also by many Hispanics – continue to live as an under class, in desperate poverty in the richest country on the planet, and in a condition of dependency on the capitalist state, the ideas of Black Power in the 1960's, did offer a way out of that, at least for a time, that did not rely on appeals to the capitalist state, or in calls for "Revolution Now". It is those ideas of self-reliance, community organising, the building of cultural and class pride that I think we need to take up, and develop today; not as Black pride, but as Working-Class pride. That was also the point I was trying to make in my blog Why We Need A Tomb Of The Unknown Worker.

In the deprived inner city areas. the answer is not to look to the capitalist state for solutions, not too simply address the problem of welfare dependency, by increasing the dose of that particular opium of the people, but to provide independent, working-class solutions built around the idea of working-class self-activity, self-government and class pride. In response to the plea that “there are no jobs”, we should respond, not by demanding that the capitalist state provide such jobs, or else provides welfare benefits, nor by perpetuating the myth that such jobs can only be generated by the good grace of private capitalists.

We should proceed on the basis of the fundamental idea of Socialism that if there are unmet human needs, and there are unused resources, the two can be beneficially brought together. In the last week or so, we have seen large numbers of people in these communities come together to form Defence Squads to protect themselves against rioting and looting. We have also seen people organise themselves in large numbers – much larger than the numbers of looters – via social networking to carry out the clean-up of those communities for example.

This is ample proof that local communities can self-organise, and can undertake work themselves without private capitalists and without the capitalist state. It was a clear refutation to the argument sometimes raised that workers in these communities cannot take on such functions, because they have a job to go to, and so on. Whilst most of the rioters were without work, the majority of those that turned out to clean-up, did so in addition to having a job to go to. How much greater reason then is there to provide those without work, with a job doing those tasks within the community that need doing, tasks often whose main beneficiaries are those that do not have jobs, and who are dependent upon some form of assistance? I am not talking about Workfare here, which is simply a means by which the capitalist class uses the Welfare State to reinforce the Capital-Labour relation, but of subverting that relation.

I am talking about local communities establishing their own direct democracy, to decide on tasks within the community that need doing, and providing the unemployed members of that community with work doing them.

It would involve establishing co-operative enterprises within the community to undertake that work. It could involve carrying out things such as Drug Counselling, for instance, where some professional knowledge would be required – possibly utilising workers from the Co-op Pharmacy – but, through which some of the unemployed could then also be trained appropriately.

It could involve reclaiming and developing, into inner city farms and gardens, derelict land. Indeed, it could involve building much needed social housing. The communities themselves would need to raise capital to begin to organise these types of activity, but there are a number of ways this could be done such as access to funds from the Co-operative Development Agency, The Co-op Bank, The Confederation of Co-operative Housing, and so on, as well as local workers raising their own funds, and by looking to their trades unions for support.

Moreover, the basic economic law is that where someone is paid to carry out work to meet the needs of some consumer, the income then received enables that worker to also expand their own needs, thereby creating demand for some other product or service, which in turn creates employment potential. Within the confines of capitalist production, the scope for this is limited, because a capitalist will only employ such workers if they can, at the same time, make a profit from doing so. But, a co-operative community enterprise would have no such limitation. Its only concern would be to ensure that needs are met.

Of course, this may mean that those employed to carry out the work might not be paid trades union rates of pay. But lots of work is carried out without it being done at trades union rates. Workers carry out domestic labour of that sort all the time. We should treat labour done for the benefit of our own communities, and to develop an alternative sector of worker owned property in the same way. After all the work that activists do, which requires considerable amounts of time, going to trade union branch meetings, LP meetings of all kinds, attending various campaign meetings and activities, is all done without any payment at all. We do it, because our concern is not primarily about payment, but about changing society, and as Marx demonstrated a fundamental aspect of that is changing those basic property relations. Our goal should not be limited by merely trades union politics, of the “Fair Day's Wage” variety, but be based on the socialist principle of abolishing the wages system, and of developing worker owned property as the means to do it. After all, a Workers State would have to abolish Welfarism, and seek to employ all available labour at whatever wages ensured competitiveness if it was to survive long in a hostile capitalist environment. As Marx said in the Critique of the Gotha Programme, our principle, the principle upon which Socialism is based is “He who does not work, neither shall he eat.”

But, the more such worker owned property was developed in our communities, the more it was linked together, the more competitive it would become against capitalist property. As the Mondragon Co-op in Spain has demonstrated, co-operative production is innately more efficient than capitalist production, and thereby provides the basis, in any case, of providing the workers within it with higher living standards.

The graph here shows the rapid rate at which Mondragon has created new jobs, and I have referred previously to the fact that workers at Mondragon receive pensions way beyond anything that workers in the UK can expect.

Many of those involved in the riots were themselves entrepreneurial. The gang members, and those involved in selling drugs were already essentially businessmen. Our task is to take that entrepreneurial spirit, and direct it into socially useful and positive directions, for the benefit of those communities.