Austerity is working, for the 1%

We talk so often as socialists and the left that austerity has failed and is not working. But when we look at it from the capitalists point of view which we fall foul of not doing nearly enough in my view we’d understand things a lot better if we did see things from their point of view sometimes austerity is working very well indeed. Essentially we are seeing policy after policy being pushed that the right has always supported but has not been able to get away with them up till now such as large scale privatisation and eye watering cuts to welfare and social spending. But now in an economic crisis and telling us thing like we’re all in this together and this is for the national interest they have largely succeeded in dividing people to ram their austerity home. Those who think we have to take the medicine for a bi and we’ll then be ok are starting to look a bit worried this I’m afraid is the new norm for capitalism. Austerity is simply the latest phase of capitalism we are going through and it is working very well for the 1%. The welfare state is under attack, workers’ rights are being eroded and poverty and inequality are on the rise. This is not a new crisis. The austerity measures now being imposed in the UK and Europe have been replicated around the world for decades. Time and again, debt crises created by casino banks have been paid for through austerity measures which have fallen on the poorest in society. The global history of austerity shows us how it has been used to create an economy that is built for the benefit of the 1%. Wherever austerity has been tried people have responded with inspiring resistance and new ways to create a fairer, more equal and more democratic economy. So far this has not succeeded but for the 1% the ruling class austerity has seen a huge transfer of wealth from the poorest in society to the richest in society. The rich as they say have never had it so good. It really is high time for them. The rich see opportunities in every crisis every crisis is a possibility to make a killing and boy many have. What are the policies of austerity? They involve the cutting of public investment and services such as education, health care, and retirement insurance. In addition they also include the privatizing of existing government assets. Public employees suffer wage freezes or cuts and mass layoffs as part of austerity measures. Labour laws are revised to empower employers at the expense of employees’ job security, wages, benefits, and voice on the job. And austerity also involves increased taxes and fees on working class people. Austerity is sold as the only available means of reducing the debt. However, there is plenty of money to take care of these financial imbalances. It is in the pockets of the wealthy and big business elites whose think tanks and politicians are, not coincidentally, the architects of austerity. They want nations’ economies to be run more like the corporations and banks, prioritizing that their shareholders get paid first and foremost at the expense of everyone else. In Europe the level of debt is 87 percent of its collective GDP, necessitating a severe approach, according to their outlook. However, in the U.S., which is in the beginning stages of an austerity campaign, the level of debt is over 100 percent of GDP. Considering this level of debt and the size of the U.S. economy, the largest dose of austerity measures are yet to come, and it will be working people who will be expected to swallow them. The truth is that the world economy is not in crisis because of debt. It is because too many have too little to buy what has been created. Without a stronger consumer base the capitalists have no reason to invest in making more commodities and creating more jobs. How are they going to realize a profit if few can afford to buy what is produced? Before the Great Recession the big business elites of the world had gotten around this problem by indulging in an orgy of financial speculation, especially in the U.S. This extra cash, created out of nothing, enabled them to continue handing out dicey loans while repackaging and selling these toxic assets as good investments. As long as the cash spigot was flowing today, why worry about tomorrow, was the line of reasoning for the 1%. This created massive financial bubbles in, for instance, housing in the U.S. and several European nations. The ultimate effect of all this financial gambling was to inflate the fundamental problem with the economy, which was the crisis of overproduction. When it was no longer possible to get beyond this limit, the resulting crisis was so deep and wide that even today, four years later, there is no real end in sight. This has been greatly exacerbated by massive bailouts to the banks both in the U.S. and Europe as well as costly wars in Iraq and Afghanistan conducted by the U.S. and its allies Big business is hoarding trillions of dollars rather than investing these funds in job creating production and services. In the U.S. alone it is estimated that these funds are up to $2 trillion. (1) Without a thriving consumer base, the big business owners have no motivation to invest in goods and services. Without this investment, there will be no thriving consumer base. The economic elite sees no way out of this Catch 22, so they are looking for other ways to enrich themselves. One way they are doing this is by treating the world economy as an enormous casino. For instance, it has been estimated that the total amount of derivatives being played in the market comes to $1.2 quadrillion — 20 times the amount of money currently in the global economy. (2) While the results of such reckless investment produce impressive portfolios for a few today, everyone else is exposed to potentially disastrous risks in the future. The 1% does need to obtain real money from somewhere, however. Productive investment is out of the question for the reasons discussed above. Austerity is a weapon they can use to muscle their way towards grabbing the vast pools of social capital in government programs meant to benefit working people. Rather than acting as organizers of production, the corporation and bank owners are using austerity to act as parasites, draining the economy as a whole. Austerity also serves the business elite’s interests at the expense of everyone else in another way. Without a strong safety net, workers are left in an even more desperate competition with one another to find work. This enables those on top of the economy to depress wages, benefits, and rights since they have a larger reserve of workers to pick from who are willing to take anything. Finally, austerity is a weapon to weaken the Labour Movement, the first line of defence for working people against corporate greed. For instance, in the U.S., it is not a coincidence that austerity measures are aimed first and foremost at public employees and teachers. These are the nation’s two most heavily unionized sectors. If their unions can be broken into accepting austerity, sweeping aside the rest of Labour in the pursuit of greed will be an easier task for the 1%. In short, austerity is a program of class war. Austerity never was about bringing debt or deficits down if anything they have gone upwards not down. Its time to expose the real ideas behind austerity and that is a huge transfer of wealth from the poor to the rich. Knowing the facts is just one part fighting back to change this is another. Allowing people to know the truth is the first stage exposing the lies of the ruling class’s across the world knowing that taking a wage cut or redundancy isn’t helping you, other workers or the country only a minority of very rich individuals at the top this must be challenged and exposed for what it is. The rule of capitalism

We will not pay for their crisis, join the fightback on N30

We now stand at 28 trade unions who have balloted and voted yes for strike action next wednesday the 30th of November. This could possibly be the biggest day of action since the first day of the 1926 general strike.

The titanic strike of 30 November in Britain will display the colossal power of the working class through the trade unions, to resist the savage cuts demanded by the capitalists and their political representatives, the Con-Dem austerity coalition.

It also presents a unique opportunity that must not be lost for the leaders and ranks of the trade unions to reach big audiences of working people.

Many will be involved in mass action for the first time and therefore can be receptive to discussion and debate about a real alternative to the future of unrelieved misery, 'planned poverty', promised by Osborne and Cameron with Clegg and Co in tow.

The PCS civil service union has already proposed an immediate alternative to Osborne's £81 billion worth of cuts over four years.

It demands the collection of the massive £120 billion unpaid tax of big business which, if implemented, would render the cuts completely unnecessary. The Socialist Party and the whole labour movement support this demand.

However, the speed and depth of the present crisis of capitalism and its devastating effect on the lives of millions of workers in Britain and worldwide poses sharply the issue, not just of immediate measures that offer some relief for working people, but of more profound solutions, of 'system change'. This means outlining and fighting for a democratic socialist alternative.

The powerful and inspirational mass movements of the Greek workers have heroically battered away at the foundations of rotten Greek capitalism.

Their counterparts in Spain, Portugal, Italy and here in Britain, in this decisive movement of 30 November, seek to emulate them.

It is also articulated in the tremendous 'Occupy' movement, which in the last months has swept through 1,000 cities worldwide and touched every continent.

Moreover, this first breeze of the class struggle - which foreshadows the storms and hurricanes to come - has even touched the summits of capitalism.

A founder of the far from radical Independent newspaper, Andreas Whitham Smith, recently stunned readers by telling them that the threat of "revolution" was stalking "Western capitalism".

However, this was not the deathbed repentance and repudiation of a former stalwart of capitalism but a warning to the capitalists themselves of the need for 'change' in the structure and organisation of their system in order to avoid such a 'nightmare'.

Not one of the leaders of the main political parties in Britain is proposing serious change. David Cameron, pressed on all sides by the increasing unpopularity of the venal system he presides over, poses as an alternative, mythical 'moral markets', a contradiction in terms.

Obscene bankers' bonuses, eye-watering and growing inequality, sky-rocketing poverty and unemployment are to be underpinned by the cement of a new capitalist 'morality'.

This represents an attempt by the apostles of capitalist slavery to reconcile us to the perpetuation of this failing system.

We can imagine Cameron's reply: "The talent and ability of bankers and the chief execs of top companies should receive their due rewards. Without them, we are doomed."

Ed Miliband, the New Labour leader, fares no better with his appeal for a "better capitalism", counterposing "productive" capitalism, which is 'good' to "predator" capitalism, which is 'bad'.

In reality, these are just different wings of the brutal profit system and are linked together in perpetuating the current deadly paralysis of society.

at least 200 million unemployed in the world who increasingly form a substratum of the poor, homeless and dispossessed.

Eighty-one million of this figure is composed of young people - who are condemned to a life of 'worklessness'. There is almost a 50% rate of unemployed young people in Spain and 40% in Greece.

Added to this are the seven million in Britain and 1.6 billion worldwide in part-time 'precarious' jobs.

They are a 'precariat', a modern manifestation of Marx's "reserve army of the unemployed". This is a pool of cheap, sometimes almost slave labour - including young people working as 'interns' for nothing.

They may be drawn into work when needed and then conveniently tossed aside like an old boot when the economic cycle of capitalism deems they are 'surplus to requirements'.




It is important we turn out in our numbers on the day and not just make this a nice day off work but a real show of solidarity across the working class. Bringing together public and private sector workers. Linking up teh occupations with teh construction workers and sparks who are facing struggles too.

We support a 'Robin Hood tax' on the transactions of big business. But history shows that the capitalists always find a million and one ways to circumvent any law which seeks to claw back some of the wealth and eats into their profits.

When the Labour government of Harold Wilson attempted to do something similar through a corporation tax in the 1970s, such was the opposition of big business it was completely watered-down and rendered largely ineffective.

The only way to prevent this is through the nationalisation of the banks and finance houses. Similarly, the 'dictatorship of the market', which is holding the whole of Europe to ransom, should be met with the cancellation of the debt to the bond parasites.

Nationalisation
This in turn could only succeed if nationalisation was carried through not just in one country but on a continental and world basis.

Inequality is intrinsic to capitalism. The exploitation of the working class - the capitalists garner what Marx called 'unpaid labour' in the form of profits - is the very foundation of the system.

From this flow all the inequalities and the class antagonisms which shape this society. The system can go ahead for a while as long as the surplus is invested in productive industry to create more factories and thereby the production of more goods and services.

But it stagnates and falls back when the restricted incomes of the working class - particularly marked in the last few decades - means they cannot buy back fully the goods and services they produce.

This results in 'overproduction', a glut of unsold goods and redundant workers and capital. This, in turn, can produce a 'death spiral' reflected in the paralysis of production evident throughout the world today.

Combine all this clear evidence of the wasteful character of the system with the extraordinary mass movements - Greece, Italy, Spain, Britain on 30 November, etc - and it is clear that capitalism faces one of its greatest threats in its long history.

In fact, a new social system is knocking at the door of history. This is the idea of a socialist democratically planned and organised economy and society. To usher it in requires a movement and the urgent building of a mass workers' party.

Ironically, this current threat to capitalism arises from its very triumph following the collapse of the Berlin Wall in 1989 and the downfall of Stalinism.

The consequent dismantling of the planned nationalised, economies and its replacement by 'wild capitalism' represented a big ideological victory for capitalism.

This in turn moved the leaders of parties such as the old Labour Party, at its base a 'workers' party', and the trade unions to the right, leading to the transformation of these parties largely into pro-capitalist formations.

This meant that the capitalists no longer needed to look over their shoulders at a threat posed by the working class.

There is no check on their actions as there had been previously. Capitalism was therefore unrestrained in pursuing the policies of financialisation which were already underway in the late 1970s and 1980s.

In this sense, it became its own gravedigger, manifested in the economic madness of debt-driven capitalism; financial bubbles on top of financial bubbles, which collapsed like a house of cards in 2007-2008.

The consequences of this are evident in the idle factories, workplaces and the tragedy of the millions of 'idle hands' which presently litter the economic landscape of world capitalism.

It is true support for a socialist alternative will not develop easily or automatically given the relentless anti-socialist, pro-capitalist propaganda of the last two decades.

It has to be argued for and explained, particularly when the working class is on the move, as it will be on 30 November.

But support in the polls for the 'Occupy' movements has demonstrated the broad support for a better world.

The '99%' does not yet have a full understanding, consciousness, of how to achieve that alternative. Even those involved in the 'Occupy' movement know what they don't want but do not have a clear alternative.

Yet their aims can only be realised through real 'system change', socialism. Brutal capitalism is demonstrating daily the blind alley which this system is in and is preparing the ground for millions to search for an alternative.

Capitalism is incapable of satisfying human requirements in today's world. Socialism is the idea which will dominate the 21st-century.



extracts taken from this excellent article by Peter Taaffe on the socialist party website bits of which he talked about in his speech at socialism 2011
http://www.socialistparty.org.uk/articles/13185/21-11-2011/capitalism-is-crisis-there-is-an-alternative-fight-for-socialism

As the occupy movement grows, its influence grows with it

The Occupy the London Stock Exchange nears its first month in occupation October 15th the day it was set up. Its influence and effect it is having in the wider population and political debate is still as sharp as when it set up camp i believe. At first many on the left who had been involved in protests and demonstrations for years were a little sceptical but following brutal attempts from the police and security to remove occupiers from locations around the world we can be in no doubt this is here to stay and we must support this movement.

Many on the right are confused and unsure what to make of the movement and throw cheap reactionary bile at it as its all they know. They tend to focus on the debarcle with St Pauls Cathedral rather than engaging in a debate about the real reason why the anti capitalist protesters are there in the first place.

The original idea was to set up camp in the square mile of the city but as this was private property they were moved off and the next nearest place they could put down camp was outside St Pauls. This was unfortuante as moved the debate towards the church and the troubles that encountered have been well documented sadly.

But for this movement to get its message across and i firmly believe it is doing so now. It must remain true to its original values of what it was originally set up for.
I believe the democratic nature of the occupations and their intentions to debate and discuss teh best way forward for the 99% is good and healthy. The right and the political class aer so used to not using or practising true democracy this is a alien concept to them.

Following Occupy London Stock Exchange (LSX), and similar protests in Glasgow, Nottingham, Bristol and Newcastle, among others, a group has established Occupy Bradford outside the city hall on Centenary Square.

One supporter of the camp had been to Occupy Wall Street in the US. Several people brought donations of food. One person turned up to argue with the occupiers but went away supportive, saying he would come back to discuss further the following day!

But more than anything, the campers want to discuss with people how to break the monopoly of the top 1% over political and financial decision making and create a society that would benefit the 99%.

Supporters of the English Defence League attacked Occupy Newcastle campers early in the morning of 30 October. This followed a daytime demonstration by the racist group on 29 October which harassed the camp. We, the 99%, need to unite to fight for jobs, homes and services, and defeat the EDL which wants to spread racist division.
St Pauls
An Occupy LSX camper spoke to the Socialist about the threat by St Paul's Cathedral and the City of London Corporation to evict the occupation.


"The protesters have been cooperating with the cathedral managers; the crisis among them is of their own making, they know they will be seen in a very bad light if they help with eviction orders.

The City of London Corporation has led the way in seeking to evict us and has applied pressure on the cathedral, but the Corporation may now have to go it alone.

We are still defiant and determined to continue, and have now occupied a third site - Northampton Square. We need to make sure that the publicity over the problems of St Pauls doesn't prevent our anti-capitalist message getting out. Despite the wide range of differing political views at the camp, the 'Capitalism is Crisis' banner raised at the start of the occupation encompasses very many voices here.

The outreach working group needs to continue its work making strong links with the student unions, unions and anti-cuts organisations and we need to democratically debate our demands to move back to other crucial issues like capital finance and its effects on the 99%.

We urge new supporters to come and join us - everybody is welcome. We are in the 'belly of the beast' here, and every extra person will help with our impact."

Who are the real wealth creaters ?

There is a excellent article in todays Guardian. I've been very impressed with this writer named George Monbiot who writes for the Guardian. His article in todays paper titled .The 1% are the very best destroyers of wealth the world has ever seen focus's in on the myth that the rich and the ruling class known as the 1% are far superior and better at producing wealth than the ordinary workers. george absolutely destroys the myth that the rich are thre because they ahve earnt it and are the best in producing the wealth and making the world go around.

What we have been told for decades about the way the boss's are those who have the best expertise and know how to run business's and economies. This is looking increasingly false and a complete lie.
"If wealth was the inevitable result of hard work and enterprise, every woman in Africa would be a millionaire. The claims that the ultra-rich 1% make for themselves – that they are possessed of unique intelligence or creativity or drive – are examples of the self-attribution fallacy. This means crediting yourself with outcomes for which you weren't responsible. Many of those who are rich today got there because they were able to capture certain jobs. This capture owes less to talent and intelligence than to a combination of the ruthless exploitation of others and accidents of birth, as such jobs are taken disproportionately by people born in certain places and into certain classes.

The findings of the psychologist Daniel Kahneman, winner of a Nobel economics prize, are devastating to the beliefs that financial high-fliers entertain about themselves. He discovered that their apparent success is a cognitive illusion. For example, he studied the results achieved by 25 wealth advisers across eight years. He found that the consistency of their performance was zero. "The results resembled what you would expect from a dice-rolling contest, not a game of skill." Those who received the biggest bonuses had simply got lucky.

Such results have been widely replicated. They show that traders and fund managers throughout Wall Street receive their massive remuneration for doing no better than would a chimpanzee flipping a coin. When Kahneman tried to point this out, they blanked him. "The illusion of skill … is deeply ingrained in their culture."

So much for the financial sector and its super-educated analysts. As for other kinds of business, you tell me. Is your boss possessed of judgment, vision and management skills superior to those of anyone else in the firm, or did he or she get there through bluff, bullshit and bullying?

In a study published by the journal Psychology, Crime and Law, Belinda Board and Katarina Fritzon tested 39 senior managers and chief executives from leading British businesses. They compared the results to the same tests on patients at Broadmoor special hospital, where people who have been convicted of serious crimes are incarcerated. On certain indicators of psychopathy, the bosses's scores either matched or exceeded those of the patients. In fact, on these criteria, they beat even the subset of patients who had been diagnosed with psychopathic personality disorders.

The psychopathic traits on which the bosses scored so highly, Board and Fritzon point out, closely resemble the characteristics that companies look for. Those who have these traits often possess great skill in flattering and manipulating powerful people. Egocentricity, a strong sense of entitlement, a readiness to exploit others and a lack of empathy and conscience are also unlikely to damage their prospects in many corporations.

In their book Snakes in Suits, Paul Babiak and Robert Hare point out that as the old corporate bureaucracies have been replaced by flexible, ever-changing structures, and as team players are deemed less valuable than competitive risk-takers, psychopathic traits are more likely to be selected and rewarded. Reading their work, it seems to me that if you have psychopathic tendencies and are born to a poor family, you're likely to go to prison. If you have psychopathic tendencies and are born to a rich family, you're likely to go to business school.


Chief executives now behave like dukes, extracting from their financial estates sums out of all proportion to the work they do or the value they generate, sums that sometimes exhaust the businesses they parasitise. They are no more deserving of the share of wealth they've captured than oil sheikhs.

The rest of us are invited, by governments and by fawning interviews in the press, to subscribe to their myth of election: the belief that they are possessed of superhuman talents.

What has happened over the past 30 years is the capture of the world's common treasury by a handful of people, assisted by neoliberal policies which were first imposed on rich nations by Margaret Thatcher and Ronald Reagan.

These numbers need to be tattooed on our minds. Between 1947 and 1979, productivity in the US rose by 119%, while the income of the bottom fifth of the population rose by 122%. But from 1979 to 2009, productivity rose by 80%, while the income of the bottom fifth fell by 4%. In roughly the same period, the income of the top 1% rose by 270%.

In the UK, the money earned by the poorest tenth fell by 12% between 1999 and 2009, while the money made by the richest 10th rose by 37%. The Gini coefficient, which measures income inequality, climbed in this country from 26 in 1979 to 40 in 2009.

In his book The Haves and the Have Nots, Branko Milanovic tries to discover who was the richest person who has ever lived. Beginning with the loaded Roman triumvir Marcus Crassus, he measures wealth according to the quantity of his compatriots' labour a rich man could buy. It appears that the richest man to have lived in the past 2,000 years is alive today. Carlos Slim could buy the labour of 440,000 average Mexicans. This makes him 14 times as rich as Crassus, nine times as rich as Carnegie and four times as rich as Rockefeller.


Until recently, we were mesmerised by the bosses' self-attribution. Their acolytes, in academia, the media, thinktanks and government, created an extensive infrastructure of junk economics and flattery to justify their seizure of other people's wealth. So immersed in this nonsense did we become that we seldom challenged its veracity.




Not any longer. Small voices at first but growing more by the day are starting to question this capitalist system and how it works. They are saying does it have to be this way ?

Of course it doesnt have to be. Karl Marx once told us philosophers have only interpreted the world the point for us now is to change it. That is exactly waht the occupations in London and around the world are discussing right now how to go about it. Of course it is early days but the crucial fact that they are starting to debate how we can change things is better than accepting the blind myths the ruling class feed us day in day out.

You can read the full article from George Monbiot at http://www.guardian.co.uk/commentisfree/2011/nov/07/one-per-cent-wealth-destroyers?CMP=twt_gu