The credit squeeze is set to trigger the end of the boom that has shaped our times. Politics is going to change with it, writes Seumas Milne (Thursday December 13, The Guardian.)
New Labour has led a charmed economic life for the past decade. Britain's ejection from the European exchange rate mechanism in the early 1990s and a unique set of international conditions helped deliver a record that earlier generations of British politicians could only have fantasised about. Whatever other disasters and scandals they could be held responsible for, the economy was always Tony Blair and Gordon Brown's secret weapon: the "longest period of sustained economic growth since records began", low inflation, rapid job creation and a strong boost to public spending, all at the same time. The fact that it has also been a story of rising inequality, stubborn unemployment and ballooning levels of debt - and has depended on the international financial system's toleration of a huge trade deficit to sustain it - has until now barely shifted the perception of economic success. That has been the crucial backdrop to the me-too politics of recent years and the free market consensus that underpins it. It is also, of course, the record that finally propelled Brown into 10 Downing Street.
But there can now be no doubt that such halcyon days are coming to an end. What kicked off in the US earlier this year, in the shape of the sub-prime mortgage lending crisis, has now spread like gangrene across a deregulated global financial system, imposing a vice-like squeeze on the very credit cushion that has hitherto kept the US and British economies afloat. In Britain, it has already led to the collapse of Northern Rock and the first run on a British bank since the Victorian era. But the impact will certainly go much further, particularly in an economy so lop-sidedly dominated by the financial sector. Already, the house price collapse and prospect of mass repossessions is tipping the US economy towards full-blown recession. In Britain, which now has the highest level of personal debt of any industrial country - at £1.4 trillion, larger than national income - the expectation must be that the economy is heading in the same direction. As the full impact of the credit crunch makes itself felt, the house price bubble is bound to deflate further. That in turn will cut demand, bringing with it a painful economic slowdown at the very least.
The central banks have, of course, been busy cutting interest rates and pumping cash into the system to try to achieve the kind of soft landing that saw them through earlier international financial crises, in 1998 and 2001. Yesterday's coordinated announcement of billions in new loans to banks shows both how ineffective those earlier interventions have been and how serious the situation has become. But there are good reasons to believe that even this latest move is likely to prove too little, too late, to turn back the incoming tide. And for the first time since the 1970s, there is a growing risk of stagflation - the combination of recession and rising inflation - which makes sharp interest rate cuts particularly risky from the point of view of neoliberal orthodoxy. International oil, commodity and food prices are all currently on the rise, just at the point when the credit squeeze and emerging first-world debt crisis show all the signs of bringing the boom of the past 15 years to a juddering halt.
That long boom was made possible by the collapse of the Soviet Union and the opening of China (and to a lesser extent India) in the 1990s. The effect was to bring hundreds of millions of educated and low-waged workers into the framework of the international capitalist market - who, as the former US Federal Reserve chairman Alan Greenspan put it, have "restrained the rise of unit labour costs in much of the world". Along with the wider weakening of organised labour, the deregulated expansion of international finance and a flood of cheap imports into the rest of the world, the result has been a corporate profits bonanza and power grab which has shaped the economic and political temper of our times.
The signs are, however, that some of these conditions are reaching their limits. Global growth is starting to press on natural resources, forcing up prices, most obviously in the case of oil. The evidence is growing that China's downward pressure on global prices may be coming to an end, as its economy overheats and inflation builds. Add to that the dizzying overreach of the credit-fuelled casino that is the global financial system and the "corrections of imbalances" - as sharp falls in living standards and unemployment spikes are classified in the financial institutions and ministries - are likely to be very damaging indeed.
What is certain is that the end of the long boom will have a profound ideological impact. So long as market fundamentalists appeared to be delivering the goods - however unequally and insecurely - their political dominance was assured. That is now clearly no longer the case. As Martin Wolf, conservative doyen of British economic commentators, wrote in yesterday's Financial Times: "What is happening in credit markets today is a huge blow to the credibility of the Anglo-Saxon model of transactions-orientated financial capitalism." If the credit squeeze does indeed trigger a wider economic meltdown, that will certainly mean the end of the neoliberal consensus that has dominated politics for almost a generation.
But politicians have yet to wake up to the sea-change that is already under way. It's a measure of how tight the ideological straitjacket on British politics remains that it has been left to the acting leader of the Liberal Democrats, Vince Cable, to press the commonsense case for the nationalisation of Northern Rock, while Labour ministers take any amount of punishment over the scandal to avoid so much as a hint that they might believe a private solution to be anything other than preferable in all circumstances, even in such a classic case of market failure. If, as now seems increasingly likely, the government is in fact forced to nationalise the bank to secure its own loans, that will at least help break the ludicrous ideological spell against public ownership.
For Brown, the man who promised the end of boom and bust, the growing economic dangers pose an unavoidable challenge. For someone so closely associated with the neoliberal agenda, it may be too late to change direction. But unless he and his already damaged government are prepared to adopt a more interventionist and radical approach to deal with the crisis head-on, the political backwash is likely to sink them all.
s.milne@guardian.co.uk
Thursday, 13 December 2007
Ecuador Assembly Enters New Stage
Montecristi, Ecuador, Dec 12 (Prensa Latina)
The Ecuadorian Constituent Assembly enters a new phase Wednesday with the creation of ten Assembly tables, now that its internal regulations have been approved, Assembly Vice President Fernando Cordero highlighted.
He indicated the statutes endorsed Tuesday confirm the entity's full powers, which, he clarified, will not be used as an open check.
Regarding that, Cordero defended the Assembly's faculty to discuss governmental laws and reforms, which would enter into force once approved by the majority of the 130 members.
This Constituent Assembly is not a replica of the previous one in 1998, and the set of rules is highly democratic, because it includes the possibility of appealing to the Assembly presidency, and was debated article by article in six extensive sessions.
The document, whose official version has not been published, does not limit conduct, expressions, or attitudes, and it is unifying mechanism, Cordero asserted.
The Ecuadorian Constituent Assembly enters a new phase Wednesday with the creation of ten Assembly tables, now that its internal regulations have been approved, Assembly Vice President Fernando Cordero highlighted.
He indicated the statutes endorsed Tuesday confirm the entity's full powers, which, he clarified, will not be used as an open check.
Regarding that, Cordero defended the Assembly's faculty to discuss governmental laws and reforms, which would enter into force once approved by the majority of the 130 members.
This Constituent Assembly is not a replica of the previous one in 1998, and the set of rules is highly democratic, because it includes the possibility of appealing to the Assembly presidency, and was debated article by article in six extensive sessions.
The document, whose official version has not been published, does not limit conduct, expressions, or attitudes, and it is unifying mechanism, Cordero asserted.
Fate of Bolivia Uncertain
La Paz, Dec 12 (Prensa Latina)
Bolivia"s governing party and opposition are once again measuring their strength Wednesday, leading the nation to a dangerous path with an uncertain ending.
On the one hand, the government defends its democratic process of social change, and on the other, traditional parties cling to their inherited privileges, and act with violence and despair.
A popular celebration for the recently approved constitutional proposal, and the implementation of de facto autonomies in several departments have been scheduled for the weekend..
In views of imminent confrontations and the spiral of violence pounding the country for weeks, President Evo Morales has repeatedly called for dialogue to solve national problems.
ó I call for authorities and legally elected departmental leaders to work together in regards with the new Constitution, the autonomy law, and autonomic statute, ó Morales said in a message to the nation.
The constitutional text is rejected by mayors Ruben Costas (Santa Cruz), Mario Cossio (Tarija), Leopoldo Fernandez (Pando), Ernesto Suarez (Beni), and Manfred Reyes (Cochabamba), who announced the implementation of de facto autonomies.
The president announced such actions attempt against national unity, are unlawful, unconstitutional, and separatist, and rejected them, but recognized the right of some sectors to protest.
But opposition groups refuse to solve the differences and continue with force and other measures including an eight-day hunger strike widely covered by the media but hardly recognized by the people.
Bolivia"s governing party and opposition are once again measuring their strength Wednesday, leading the nation to a dangerous path with an uncertain ending.
On the one hand, the government defends its democratic process of social change, and on the other, traditional parties cling to their inherited privileges, and act with violence and despair.
A popular celebration for the recently approved constitutional proposal, and the implementation of de facto autonomies in several departments have been scheduled for the weekend..
In views of imminent confrontations and the spiral of violence pounding the country for weeks, President Evo Morales has repeatedly called for dialogue to solve national problems.
ó I call for authorities and legally elected departmental leaders to work together in regards with the new Constitution, the autonomy law, and autonomic statute, ó Morales said in a message to the nation.
The constitutional text is rejected by mayors Ruben Costas (Santa Cruz), Mario Cossio (Tarija), Leopoldo Fernandez (Pando), Ernesto Suarez (Beni), and Manfred Reyes (Cochabamba), who announced the implementation of de facto autonomies.
The president announced such actions attempt against national unity, are unlawful, unconstitutional, and separatist, and rejected them, but recognized the right of some sectors to protest.
But opposition groups refuse to solve the differences and continue with force and other measures including an eight-day hunger strike widely covered by the media but hardly recognized by the people.
Tuesday, 11 December 2007
Green Left Weekly - Stalemate to be resolved in Bolivia?
By Rachel Evans, December 8, 2007 - reproduced here for information.
Bolivia’s indigenous, left-wing President Evo Morales has announced plans to hold a referendum on whether or not he will continue in office, according to a December 5 New York Times article. The aim is to overcome the stalemate the country has faced between the right-wing elite — opposed to the process of change pushed by Morales — and the poor and indigenous majority that put Morales in power. The vice president and nine state governors will also a vote on continuing in office.
The reasons for this move are easy to understand. Bolivia is in upheaval. Events that began on November 19, with violent right-wing protests in Sucre, could mark a decisive step in the countries battle for justice for the indigenous majority and for social-justice orientated industrialisation to overcome poverty and the crippling effects of underdevelopment. It was to achieve these aims that Morales was elected in December 2005. He has since implemented the demand of Bolivia’s powerful social movements for a constituent assembly to draw up a new constitution according to these principles.On November 24 it was decided to move the assembly, meeting in Sucre, to military barracks on the outskirts of the city in an attempt to escape the wave of violence already washing over the city — which saw the brutal eviction of 300 campesinos (peasants), who had arrived in Sucre to help physically defend the assembly, from their sleeping quarters. The move sparked further violent protests.In an attempt to undermine the legitimacy of the assembly, right-wing opposition delegates had already walked out, declaring the process had become “illegal”. On November 23 — free of the stalling tactics of the opposition that has seen the assembly miss its one-year deadline for a new constitution in August — 139 of the 255 assembly delegates approved the broad outlines for a new draft constitution. The assembly is yet to adopt the specific clauses and content of the constitution. Once completed, the proposed constitution will be put to voters in a referendum.The fight to pass constitutional changes has been an important step in Bolivia’s indigenous-led struggle against the devastating affects of neoliberalism on the country.Bolivia’s struggle to rise up against decades of subservience to a rich local oligarchy and foreign (largely US and Spanish) interests led to Morales’s presidential victory in December 2005. From the late 1990s onwards, Morales helped lead the cocaleros (coca growers) in a campaign against the US-pushed eradication of the coca leaf — which can be processed into cocaine, but in its natural form is nothing more than a mild stimulant used by indigenous people for centuries and a key source of livelihood to thousands of cocaleros.In 2000, Morales helped lead the successful fight against the privitisation of water, the Bolivian poor taking on US corporation Bechtel and winning. Morales also helped lead the uprisings against the privatisation of gas, with nationalisation of Bolivia’s gas reserves a key plank of his election program .In 2003, 67% of Bolivians lived in poverty, with only 64% of households equipped with electricity, and only 31% having sewerage access. Just days after his election, Morales explained to an “In Defence of Humanity” conference the aims of the mass movement he headed: “This uprising of the Bolivian people has been not only about gas and hydrocarbons, but an intersection of many issues: discrimination, marginalisation, and most importantly, the failure of neoliberalism.”On May 1, 2006, Bolivia nationalised natural gas reserves, with the state to receive 82% of the revenue, which corporations previously took for themselves. Morales has increased Bolivia’s annual natural gas revenues from US$300 million to $2 billion a year. The Morales government has nationalised a tin smelter, most of Bolivia’s largest tin mine and the country’s railroads. Government officials have suggested they intend to move to nationalise electricity utilities.In 2006 the government completed the re-nationalisation of water companies, and is negotiating the re-nationalisation of the country’s main telecommunications company. Morales has instituted a retirement pension to all eligible Bolivians equal to the minimum wage. He increased teachers’ salaries by 10% and reduced parliamentary salaries by 50%.With proceeds from gas nationalisation (and with significant help from Cuba and Venezuela) Bolivia now has 20 new hospitals, 2000 Cuban doctors providing free health care, and the beginnings of a land reform program that is redistributing land to landless campesinos as well as tractors to assist in working it. Bolivia has embarked on a literacy campaign which has seen 73,000 out of 300,000 participants already graduated.However, the Morales government has faced its biggest challenge in the constituent assembly. The right-wing elite, backed by a savage and racist propaganda campaign in the private media, succeeded in stalling one of the key components of the process of change promoted by Morales and demanded by the poor. There have been often violent mobilisations for and against the assembly process, raising fears the country was slipping towards a civil war.The decision to push ahead with the assembly in the face of the violent campaign on the streets, fuelled by racist propaganda in the media, is a sign that the Morales government is looking to break the stalemate that Bolivia has been in for much of the year, with neither the forces tied to the oligarchy nor the popular movement headed by Morales able to enforce its will on the nation. By turning to the people with the planned referendums, Morales is attempting to re-legitimise his government and its radical project. In a country where the private media remains powerful, and the forces opposed to change have a significant social base in the largely white middle class, it is a risky move, but perhaps unavoidable. The future of Bolivia hangs in the balance.
Bolivia’s indigenous, left-wing President Evo Morales has announced plans to hold a referendum on whether or not he will continue in office, according to a December 5 New York Times article. The aim is to overcome the stalemate the country has faced between the right-wing elite — opposed to the process of change pushed by Morales — and the poor and indigenous majority that put Morales in power. The vice president and nine state governors will also a vote on continuing in office.
The reasons for this move are easy to understand. Bolivia is in upheaval. Events that began on November 19, with violent right-wing protests in Sucre, could mark a decisive step in the countries battle for justice for the indigenous majority and for social-justice orientated industrialisation to overcome poverty and the crippling effects of underdevelopment. It was to achieve these aims that Morales was elected in December 2005. He has since implemented the demand of Bolivia’s powerful social movements for a constituent assembly to draw up a new constitution according to these principles.On November 24 it was decided to move the assembly, meeting in Sucre, to military barracks on the outskirts of the city in an attempt to escape the wave of violence already washing over the city — which saw the brutal eviction of 300 campesinos (peasants), who had arrived in Sucre to help physically defend the assembly, from their sleeping quarters. The move sparked further violent protests.In an attempt to undermine the legitimacy of the assembly, right-wing opposition delegates had already walked out, declaring the process had become “illegal”. On November 23 — free of the stalling tactics of the opposition that has seen the assembly miss its one-year deadline for a new constitution in August — 139 of the 255 assembly delegates approved the broad outlines for a new draft constitution. The assembly is yet to adopt the specific clauses and content of the constitution. Once completed, the proposed constitution will be put to voters in a referendum.The fight to pass constitutional changes has been an important step in Bolivia’s indigenous-led struggle against the devastating affects of neoliberalism on the country.Bolivia’s struggle to rise up against decades of subservience to a rich local oligarchy and foreign (largely US and Spanish) interests led to Morales’s presidential victory in December 2005. From the late 1990s onwards, Morales helped lead the cocaleros (coca growers) in a campaign against the US-pushed eradication of the coca leaf — which can be processed into cocaine, but in its natural form is nothing more than a mild stimulant used by indigenous people for centuries and a key source of livelihood to thousands of cocaleros.In 2000, Morales helped lead the successful fight against the privitisation of water, the Bolivian poor taking on US corporation Bechtel and winning. Morales also helped lead the uprisings against the privatisation of gas, with nationalisation of Bolivia’s gas reserves a key plank of his election program .In 2003, 67% of Bolivians lived in poverty, with only 64% of households equipped with electricity, and only 31% having sewerage access. Just days after his election, Morales explained to an “In Defence of Humanity” conference the aims of the mass movement he headed: “This uprising of the Bolivian people has been not only about gas and hydrocarbons, but an intersection of many issues: discrimination, marginalisation, and most importantly, the failure of neoliberalism.”On May 1, 2006, Bolivia nationalised natural gas reserves, with the state to receive 82% of the revenue, which corporations previously took for themselves. Morales has increased Bolivia’s annual natural gas revenues from US$300 million to $2 billion a year. The Morales government has nationalised a tin smelter, most of Bolivia’s largest tin mine and the country’s railroads. Government officials have suggested they intend to move to nationalise electricity utilities.In 2006 the government completed the re-nationalisation of water companies, and is negotiating the re-nationalisation of the country’s main telecommunications company. Morales has instituted a retirement pension to all eligible Bolivians equal to the minimum wage. He increased teachers’ salaries by 10% and reduced parliamentary salaries by 50%.With proceeds from gas nationalisation (and with significant help from Cuba and Venezuela) Bolivia now has 20 new hospitals, 2000 Cuban doctors providing free health care, and the beginnings of a land reform program that is redistributing land to landless campesinos as well as tractors to assist in working it. Bolivia has embarked on a literacy campaign which has seen 73,000 out of 300,000 participants already graduated.However, the Morales government has faced its biggest challenge in the constituent assembly. The right-wing elite, backed by a savage and racist propaganda campaign in the private media, succeeded in stalling one of the key components of the process of change promoted by Morales and demanded by the poor. There have been often violent mobilisations for and against the assembly process, raising fears the country was slipping towards a civil war.The decision to push ahead with the assembly in the face of the violent campaign on the streets, fuelled by racist propaganda in the media, is a sign that the Morales government is looking to break the stalemate that Bolivia has been in for much of the year, with neither the forces tied to the oligarchy nor the popular movement headed by Morales able to enforce its will on the nation. By turning to the people with the planned referendums, Morales is attempting to re-legitimise his government and its radical project. In a country where the private media remains powerful, and the forces opposed to change have a significant social base in the largely white middle class, it is a risky move, but perhaps unavoidable. The future of Bolivia hangs in the balance.
For information - Solidarity Appeal with People, Government, Communist & Progressive Forces of Bolivia
Thanks to SolidNet for sending this to us - Ed
The political process in Bolivia faces a critical moment.
The reactionary forces, the oligarchy, the US government and some European forces promote a large scale campaign aiming to reverse the progressive processes in this Latin American country.
The goal of all these forces is to block the changes promoted by the Constitutional Assembly for a democratic Constitution for the benefit of the popular demands.
The retrograde forces, defeated on October 2003 and during the elections in 2005 try again to reorganize their ranks, to stop any change and to undermine President Evo Morales.
In order to achieve their goals they use any means, including armed groups.
The consequent progressive forces of the country, the social movements and organizations, after great and heroical battles, alongside with the Moviemento al Socialismo [MAS] under the presidency of Evo Morales, were the winners with big majority in the elections.
Now these forces try to valorize this victory in order important demands of the working people to be adopted and further promoted.
We, the signatories of this appeal, sharply denounce the support provided by the US government as well as its direct involvement in the subversive actions in Bolivia.
We also denounce the scandalous tolerance showed by other imperialist states and international organizations towards such inadmissible actions.
There is an urgent task the reactionary forces to be unequivocally condemned, isolated and defeated both on national and international level.
We stand on the side of the people of Bolivia and fully support the great mobilizations against the plans for a coup d'etat.
We support the alliance between the people and the government of Bolivia against the machinations of the oligarchy.
We express our full solidarity to the Bolivian people, to the government of the President Evo Morales, to the Communist Party of Bolivia, to MAS-IRSP and to all other progressive and anti-imperialist forces and movements in their great battle in defense of the progressive gains, in the struggle for deeper changes.
We call on for the development by all means of a large solidarity movement with the anti-imperialist forces and the people of Bolivia.
The parties
PADS, Algeria
Communist Party of Argentina
Democratic Progressive Tribune - Bahrain
Communist Party of Bangladesh
Communist Party of Belarus
Workers’ Party of Belgium
Communist Party of Bolivia
Communist Party of Brazil
Communist Party of Britain
New Communist Party of Britain
Party of the Bulgarian Communists
Communist Party of Chile
AKEL, Cyprus
Communist Party of Bohemia & Moravia
Communist Party in Denmark
Communist Party of Egypt
Communist Party of Estonia
Communist Party of Finland
Communist Party of Greece
Communist Party of India
Tudeh Party of Iran
Communist Party of Ireland
The Workers Party of Ireland
Communist Party of Israel
Party of the Italian Communists
Jordanian Communist Party
Socialist Party of Latvia
Lebanese Communist Party
Communist Party of Luxembourg
Communist Party of Macedonia
Party of Communists, Mexico
Popular Socialist Party of Mexico
New Communist Party of Netherlands
Communist Party of Norway
Peruvian Communist Party
Philippine Communist Party (PKP-1930)
Communist Party of Poland
Portuguese Communist Party
Socialist Alliance Party, Romania
Communist Party of the Russian Federation
Communist Party of Peoples of Spain
Communist Party of Sri Lanka
Sudanese Communist Party
Communist Party of Sweden
Communist Party of Turkey (TKP)
Communist Party of Uruguay
Communist Party, USA
Communist Party of Venezuela
New Communist Party of Yugoslavia
The political process in Bolivia faces a critical moment.
The reactionary forces, the oligarchy, the US government and some European forces promote a large scale campaign aiming to reverse the progressive processes in this Latin American country.
The goal of all these forces is to block the changes promoted by the Constitutional Assembly for a democratic Constitution for the benefit of the popular demands.
The retrograde forces, defeated on October 2003 and during the elections in 2005 try again to reorganize their ranks, to stop any change and to undermine President Evo Morales.
In order to achieve their goals they use any means, including armed groups.
The consequent progressive forces of the country, the social movements and organizations, after great and heroical battles, alongside with the Moviemento al Socialismo [MAS] under the presidency of Evo Morales, were the winners with big majority in the elections.
Now these forces try to valorize this victory in order important demands of the working people to be adopted and further promoted.
We, the signatories of this appeal, sharply denounce the support provided by the US government as well as its direct involvement in the subversive actions in Bolivia.
We also denounce the scandalous tolerance showed by other imperialist states and international organizations towards such inadmissible actions.
There is an urgent task the reactionary forces to be unequivocally condemned, isolated and defeated both on national and international level.
We stand on the side of the people of Bolivia and fully support the great mobilizations against the plans for a coup d'etat.
We support the alliance between the people and the government of Bolivia against the machinations of the oligarchy.
We express our full solidarity to the Bolivian people, to the government of the President Evo Morales, to the Communist Party of Bolivia, to MAS-IRSP and to all other progressive and anti-imperialist forces and movements in their great battle in defense of the progressive gains, in the struggle for deeper changes.
We call on for the development by all means of a large solidarity movement with the anti-imperialist forces and the people of Bolivia.
The parties
PADS, Algeria
Communist Party of Argentina
Democratic Progressive Tribune - Bahrain
Communist Party of Bangladesh
Communist Party of Belarus
Workers’ Party of Belgium
Communist Party of Bolivia
Communist Party of Brazil
Communist Party of Britain
New Communist Party of Britain
Party of the Bulgarian Communists
Communist Party of Chile
AKEL, Cyprus
Communist Party of Bohemia & Moravia
Communist Party in Denmark
Communist Party of Egypt
Communist Party of Estonia
Communist Party of Finland
Communist Party of Greece
Communist Party of India
Tudeh Party of Iran
Communist Party of Ireland
The Workers Party of Ireland
Communist Party of Israel
Party of the Italian Communists
Jordanian Communist Party
Socialist Party of Latvia
Lebanese Communist Party
Communist Party of Luxembourg
Communist Party of Macedonia
Party of Communists, Mexico
Popular Socialist Party of Mexico
New Communist Party of Netherlands
Communist Party of Norway
Peruvian Communist Party
Philippine Communist Party (PKP-1930)
Communist Party of Poland
Portuguese Communist Party
Socialist Alliance Party, Romania
Communist Party of the Russian Federation
Communist Party of Peoples of Spain
Communist Party of Sri Lanka
Sudanese Communist Party
Communist Party of Sweden
Communist Party of Turkey (TKP)
Communist Party of Uruguay
Communist Party, USA
Communist Party of Venezuela
New Communist Party of Yugoslavia
Thursday, 6 December 2007
How New Labour Turned Toxic - Cruddas and Trickett
Published 06 December 2007 in the New Statesman
For fear of letting in the Tories, party loyalists and trade unionists have stayed silent. But the need to speak up for core Labour values has never been so urgent, argue Jon Cruddas and Jon Trickett.
Looking at the government's nightmarish predicament, one thought occurs time and again: that new Labour's chickens are coming home to roost. The travails over donations link in turn to the cash-for-honours episode, but the origins of the current crisis go much further back - to the early to mid-1990s, when understandable optimism about Labour's skyrocketing prospects served to obscure a mess of factors that were probably always going to turn toxic.
More than a decade on, we're faced with crises of both substance and style, and these are coming together to create a perfect storm of political havoc. Ultimately the two are linked, because the political substance of new Labour has always demanded the centralised model of politics that long ago left the party floundering, and led in turn to the current funding crisis. The upshot is simple: in order to navigate through a Westminster soap opera that seems to lie somewhere between Our Friends in the North and House of Cards and draw hardened political conclusions, we have to examine what went wrong with the new Labour project.
After years in opposition and with the political and economic dominance of neoliberalism, new Labour essentially raised the white flag and inverted the principle of social democracy. Society was no longer to be master of the market, but its servant. Labour was to offer a more humane version of Thatcherism, in that the state would be actively used to help people survive as individuals in the global economy - but economic interests would always call all the shots. Once the Blair government took power, the essentials of its approach became clear: from the commercialisation of public services to flexible labour markets, on through soaring executive pay and on in turn to party funding, big business and the politics of the market had taken pole position.
Social insecurity
This primacy of the economic over the social has created some winners but many losers. The market is contaminating society as inequality grows and anxiety spreads. The credit crunch, falling house prices and the failure of Northern Rock are straws in the wind of an economy on the turn. Nothing exemplifies the UK's snowballing social insecurity more than the march that the Tories stole on inheritance tax. Polling has shown that the political sensitivity of inheritance tax is rooted in our homes being the only source of security we have. Jobs are lost or outsourced; company pensions collapse; long-term care bills loom, as do university tuition fees. Bricks and mortar are all we have to cling to.
So much for new Labour's substance. When it comes to its operating style, decision-making has always had to be controlled. The activists and the unions cannot be trusted: not only do they not understand the nature of the drive to reposition Labour as a party that continues the neoliberal revolution - albeit in a more humane form - but they must not ever be allowed to understand it. Thus, the life of the party has been purposefully sucked from it. The post of general secretary of the party - a once-mighty position - goes to administrators; the NEC is kept permanently in the dark; and the role of conference as a decision-making body has recently been brought to an end. Talk to the members Labour has remaining, and it becomes clear: the notion of an engaged, democratic party looks either dead or on life support. Where is the million-member party that was promised? Where is any notion of pluralism with independent centres of power that provide checks and balances on the parliamentary leadership? In their place, control has been handed to an elite few to force the party to change beyond recognition.
New Labour has left the party without the oxygen of modern social democracy to sustain it, while imposing a political culture that actually serves to leave the new leadership horribly exposed. To use a military analogy, it is the supply lines back to the roots that sustain and feed you. Without them, things always come unstuck. In short, Blairism has stretched the Labour Party to breaking point.
And so, to a note of qualified optimism. All this presents us with a pivotal moment. Will new Labour now be entrenched or replaced? The shape of Gordon Brown's response remains unclear, but it should be judged according to clear criteria. First, there has to be an end to triangulation and a lasting move towards more progressive politics. Just as Compass did a few weeks ago, we can only remind the Prime Minister that the kind of sentiments contained in his 2004 speech on the progressive consensus have the potential to push the party into territory where it can effectively mix power with principle.
The first aspects of this progressive approach must be symbolised by the way we fund and conduct politics within the Labour movement. The party and the country must witness a determination to identify and reject anyone who has behaved illegally or inappropriately in relation to the funding of the party. This, in turn, has to be accompanied by a drive to diminish the penetration of British politics by the power of wealth.
These steps will be necessary, but insufficient. In tandem, we need to begin the renewal of the party's federal structures and a renaissance of an engaged, meaningful conception of democracy. Both the Blairites and the Tories want the link with the unions broken for ever. If that happens, Labour will be finished as a party that can speak to working people's authentic concerns, and will stand revealed as a flimsy electoral machine built to chase the votes of a mythic Middle England - just as the same insecurities that affect Labour's core vote eat into the lives of those people concentrated in the more affluent marginals.
The point needs to be made at every available opportunity: the retention of the union link is a red line that cannot be crossed - not for reasons of factional interest, but to ensure that Labour remains in touch with the kinds of concerns that Westminster can all too easily forget.
Equality and democracy
Moreover, the senior officers of the Labour Party must become independent of the parliamentary leadership, starting with the appointment of a new general secretary with real operating autonomy. We should also demand the separation of the deputy leadership from a properly elected party chair.
To sound a slightly more ideological note, the aim of our politics is to put people in control of their lives and their world. We know we can't do this as individuals or consumers - only as citizens. For that to happen, we need a truly democratic politics, a thriving public realm and a more equal distribution of resources to ensure everyone fulfils their potential. All of this is anathema to the world of profit and the market. The means of creating the good society - greater equality and more democracy - have to become the ends. Means and ends are thus reconciled.
There is still no strong turn to the Tories. It remains true that it is governments that lose elections, and the next election is hardly a foregone conclusion. With more than two years until the end of this parliamentary term, there is still time to turn our fortunes around. But if that is to happen, the party leadership has to come down heavily on the side of change over continuity.
Both party and unions have stayed silent for too long, for fear of letting in the Tories. But as politics drifts further to the right and Labour's essential identity is in real danger, there is more risk in not speaking up. To encourage debate and renewal in Sweden's Social Democratic Party, its new leader coined a phrase for dissident voices - she calls them "loving critics". There is still time for Labour's leadership to listen to such voices and alter its course. But we don't have long.
* Jon Cruddas is MP for Dagenham and was a candidate in the recent deputy leadership contest
Jon Trickett is MP for Hemsworth
For fear of letting in the Tories, party loyalists and trade unionists have stayed silent. But the need to speak up for core Labour values has never been so urgent, argue Jon Cruddas and Jon Trickett.
Looking at the government's nightmarish predicament, one thought occurs time and again: that new Labour's chickens are coming home to roost. The travails over donations link in turn to the cash-for-honours episode, but the origins of the current crisis go much further back - to the early to mid-1990s, when understandable optimism about Labour's skyrocketing prospects served to obscure a mess of factors that were probably always going to turn toxic.
More than a decade on, we're faced with crises of both substance and style, and these are coming together to create a perfect storm of political havoc. Ultimately the two are linked, because the political substance of new Labour has always demanded the centralised model of politics that long ago left the party floundering, and led in turn to the current funding crisis. The upshot is simple: in order to navigate through a Westminster soap opera that seems to lie somewhere between Our Friends in the North and House of Cards and draw hardened political conclusions, we have to examine what went wrong with the new Labour project.
After years in opposition and with the political and economic dominance of neoliberalism, new Labour essentially raised the white flag and inverted the principle of social democracy. Society was no longer to be master of the market, but its servant. Labour was to offer a more humane version of Thatcherism, in that the state would be actively used to help people survive as individuals in the global economy - but economic interests would always call all the shots. Once the Blair government took power, the essentials of its approach became clear: from the commercialisation of public services to flexible labour markets, on through soaring executive pay and on in turn to party funding, big business and the politics of the market had taken pole position.
Social insecurity
This primacy of the economic over the social has created some winners but many losers. The market is contaminating society as inequality grows and anxiety spreads. The credit crunch, falling house prices and the failure of Northern Rock are straws in the wind of an economy on the turn. Nothing exemplifies the UK's snowballing social insecurity more than the march that the Tories stole on inheritance tax. Polling has shown that the political sensitivity of inheritance tax is rooted in our homes being the only source of security we have. Jobs are lost or outsourced; company pensions collapse; long-term care bills loom, as do university tuition fees. Bricks and mortar are all we have to cling to.
So much for new Labour's substance. When it comes to its operating style, decision-making has always had to be controlled. The activists and the unions cannot be trusted: not only do they not understand the nature of the drive to reposition Labour as a party that continues the neoliberal revolution - albeit in a more humane form - but they must not ever be allowed to understand it. Thus, the life of the party has been purposefully sucked from it. The post of general secretary of the party - a once-mighty position - goes to administrators; the NEC is kept permanently in the dark; and the role of conference as a decision-making body has recently been brought to an end. Talk to the members Labour has remaining, and it becomes clear: the notion of an engaged, democratic party looks either dead or on life support. Where is the million-member party that was promised? Where is any notion of pluralism with independent centres of power that provide checks and balances on the parliamentary leadership? In their place, control has been handed to an elite few to force the party to change beyond recognition.
New Labour has left the party without the oxygen of modern social democracy to sustain it, while imposing a political culture that actually serves to leave the new leadership horribly exposed. To use a military analogy, it is the supply lines back to the roots that sustain and feed you. Without them, things always come unstuck. In short, Blairism has stretched the Labour Party to breaking point.
And so, to a note of qualified optimism. All this presents us with a pivotal moment. Will new Labour now be entrenched or replaced? The shape of Gordon Brown's response remains unclear, but it should be judged according to clear criteria. First, there has to be an end to triangulation and a lasting move towards more progressive politics. Just as Compass did a few weeks ago, we can only remind the Prime Minister that the kind of sentiments contained in his 2004 speech on the progressive consensus have the potential to push the party into territory where it can effectively mix power with principle.
The first aspects of this progressive approach must be symbolised by the way we fund and conduct politics within the Labour movement. The party and the country must witness a determination to identify and reject anyone who has behaved illegally or inappropriately in relation to the funding of the party. This, in turn, has to be accompanied by a drive to diminish the penetration of British politics by the power of wealth.
These steps will be necessary, but insufficient. In tandem, we need to begin the renewal of the party's federal structures and a renaissance of an engaged, meaningful conception of democracy. Both the Blairites and the Tories want the link with the unions broken for ever. If that happens, Labour will be finished as a party that can speak to working people's authentic concerns, and will stand revealed as a flimsy electoral machine built to chase the votes of a mythic Middle England - just as the same insecurities that affect Labour's core vote eat into the lives of those people concentrated in the more affluent marginals.
The point needs to be made at every available opportunity: the retention of the union link is a red line that cannot be crossed - not for reasons of factional interest, but to ensure that Labour remains in touch with the kinds of concerns that Westminster can all too easily forget.
Equality and democracy
Moreover, the senior officers of the Labour Party must become independent of the parliamentary leadership, starting with the appointment of a new general secretary with real operating autonomy. We should also demand the separation of the deputy leadership from a properly elected party chair.
To sound a slightly more ideological note, the aim of our politics is to put people in control of their lives and their world. We know we can't do this as individuals or consumers - only as citizens. For that to happen, we need a truly democratic politics, a thriving public realm and a more equal distribution of resources to ensure everyone fulfils their potential. All of this is anathema to the world of profit and the market. The means of creating the good society - greater equality and more democracy - have to become the ends. Means and ends are thus reconciled.
There is still no strong turn to the Tories. It remains true that it is governments that lose elections, and the next election is hardly a foregone conclusion. With more than two years until the end of this parliamentary term, there is still time to turn our fortunes around. But if that is to happen, the party leadership has to come down heavily on the side of change over continuity.
Both party and unions have stayed silent for too long, for fear of letting in the Tories. But as politics drifts further to the right and Labour's essential identity is in real danger, there is more risk in not speaking up. To encourage debate and renewal in Sweden's Social Democratic Party, its new leader coined a phrase for dissident voices - she calls them "loving critics". There is still time for Labour's leadership to listen to such voices and alter its course. But we don't have long.
* Jon Cruddas is MP for Dagenham and was a candidate in the recent deputy leadership contest
Jon Trickett is MP for Hemsworth
More from S.Milne in Venezuela
Chávez's revolution cannot stand still if it is to survive - The fate of Venezuela's experiment will be felt beyond its borders, but the dictatorship canard has now been put to rest Seumas Milne in Caracas Thursday December 6, from the Guardian
What happens in Venezuela now matters more than at any time in the country's history - not just for Latin America, but for the wider world. Since the leftwing nationalist Hugo Chávez was first elected in 1998, his oil-rich government has not only spearheaded a challenge to US domination and free-market dogma that has swept through the continent. It has also led the first serious attempt since the collapse of the Soviet Union to create a social alternative to the neoliberal uniformity imposed across the globe. That has become even clearer since the Venezuelan president committed his "Bolivarian revolution" to introducing a new form of "21st century socialism" two years ago.
So it's hardly surprising that Chávez's wafer-thin defeat in the constitutional referendum at the weekend has been seen as more than a little local difficulty. The proposals would have allowed him to stand again after his term as president expires in 2012; formalised Venezuela as a socialist state; entrenched direct democracy; and introduced a string of progressive reforms, from a 36-hour working week and social security for 5 million informal workers, to gay rights and gender parity in party election lists. Their defeat by 50.7% to 49.3% was hailed by George Bush and greeted with dismay by supporters at home and abroad, not least in countries such as Cuba, Bolivia, Ecuador and Nicaragua which rely on Venezuelan support. At the Miraflores presidential palace in Caracas in the early hours of Monday morning, the shock among ministers and activists was palpable.
But although the referendum result was clearly a setback for the charismatic Venezuelan president, it is also very far from being any kind of crushing defeat. Chávez remains firmly in power, with a commanding level of public support - his poll ratings are still over 60% - and control of the national assembly. With the exception of his right to stand again, most of the referendum package can be legislated for without constitutional authorisation. Through a dignified response to the opposition's victory, acknowledgement of a failure of preparation and commitment to stick with the attempt to build socialism, Chávez has already regained the political initiative.
Perhaps most importantly for understanding what is actually going on in Venezuela, the referendum result has surely discredited the canard that the country is somehow slipping into authoritarian or even dictatorial rule. It is clearly doing nothing of the sort, though doubtless if Chávez had won by a similar margin the US-backed opposition would have cried foul and much of the western media would have accused Chávez of dictatorship. I visited over half-a-dozen polling stations on Sunday in the state of Vargas, north-east of Caracas, and in the city itself, and the process was if anything more impressively run than in Britain - and certainly the US - with opposition monitors everywhere declaring themselves satisfied with the integrity of the ballot.
Of course, the campaign was the focus of the most mendacious propaganda, both at home and abroad. There was not only the absurd claim, recycled endlessly through the international media, that the new constitution would make Chávez "president for life" (rather than subject to the same rules that operate in France or Britain). In Venezuela, anonymous advertisements indirectly paid for by US corporate interests ran for days in the best-selling paper insisting that, if the constitutional reforms were passed, children would be taken from their parents and private homes nationalised.
Anecdotal evidence suggests such nonsense had some impact. The Bush administration has been funding elements of the opposition, including student groups (as reported at the weekend in the Washington Post), which were at the forefront of the "no" campaign. But after winning 11 national votes in nine years, the Chavista movement was clearly also complacent: the process was rushed; and there was a lack of clarity among many Chávez supporters over what was really at stake. Milk shortages that suddenly materialised in the last couple of months certainly didn't help. There is also discontent over crime and corruption, including the role of the "boli-bourgeoisie" grown rich under his presidency. Crucially, it was the abstention of Chávez supporters, especially in poorer areas, rather than greater support for the opposition, that lost the vote.
That suggests those voices in the Chávez camp now calling for slower and less radical reforms may be missing the point. The revolutionary process underway in Venezuela has already delivered remarkable social achievements in a society grotesquely disfigured by inequality, by redistributing oil revenues and unleashing direct democracy to push through social programmes. As Teresa Rodriguez, a mother of three, told me at a meeting of one of the new grass roots communal councils in the Catia barrio in Caracas: "We didn't have a voice, now we have a voice."
Since Chávez came to power, the poverty level has been slashed from 49% to 30%, extreme poverty from 16% to below 10%; free health and education have been massively expanded; subsidised food made available in the poorer areas; pensions and the minimum wage boosted; illiteracy eliminated; land redistributed; tens of thousands of co-ops established, and privatised utilities and oil brought back under public ownership and control.
It might be imagined that such a record - for all its weaknesses - combined with the clear demonstration of Venezuela's democratic credentials this week would attract more sympathy among some of those in the west who claim to care about social progress. Presumably concerns about Chávez's fierce opposition to US imperial power bother them more than the reality of life for Latin America's poor.
But there's little doubt that the fate of the Venezuelan experiment will have an impact far beyond its borders. So far, the cushion of oil has allowed Chávez and his supporters to make rapid progress without challenging the interests of the Venezuelan elite. The dangers of the movement's over-dependency on one man - not least from the threat of assassination - were underlined by the referendum experience. What is certain, however, is that the process cannnot stand still if it is to survive - and to judge by Chávez's response to his first poll defeat, he is in no mood for turning back. We weren't successful, he told the country, "por ahora" - for now.
s.milne@guardian.co.uk
What happens in Venezuela now matters more than at any time in the country's history - not just for Latin America, but for the wider world. Since the leftwing nationalist Hugo Chávez was first elected in 1998, his oil-rich government has not only spearheaded a challenge to US domination and free-market dogma that has swept through the continent. It has also led the first serious attempt since the collapse of the Soviet Union to create a social alternative to the neoliberal uniformity imposed across the globe. That has become even clearer since the Venezuelan president committed his "Bolivarian revolution" to introducing a new form of "21st century socialism" two years ago.
So it's hardly surprising that Chávez's wafer-thin defeat in the constitutional referendum at the weekend has been seen as more than a little local difficulty. The proposals would have allowed him to stand again after his term as president expires in 2012; formalised Venezuela as a socialist state; entrenched direct democracy; and introduced a string of progressive reforms, from a 36-hour working week and social security for 5 million informal workers, to gay rights and gender parity in party election lists. Their defeat by 50.7% to 49.3% was hailed by George Bush and greeted with dismay by supporters at home and abroad, not least in countries such as Cuba, Bolivia, Ecuador and Nicaragua which rely on Venezuelan support. At the Miraflores presidential palace in Caracas in the early hours of Monday morning, the shock among ministers and activists was palpable.
But although the referendum result was clearly a setback for the charismatic Venezuelan president, it is also very far from being any kind of crushing defeat. Chávez remains firmly in power, with a commanding level of public support - his poll ratings are still over 60% - and control of the national assembly. With the exception of his right to stand again, most of the referendum package can be legislated for without constitutional authorisation. Through a dignified response to the opposition's victory, acknowledgement of a failure of preparation and commitment to stick with the attempt to build socialism, Chávez has already regained the political initiative.
Perhaps most importantly for understanding what is actually going on in Venezuela, the referendum result has surely discredited the canard that the country is somehow slipping into authoritarian or even dictatorial rule. It is clearly doing nothing of the sort, though doubtless if Chávez had won by a similar margin the US-backed opposition would have cried foul and much of the western media would have accused Chávez of dictatorship. I visited over half-a-dozen polling stations on Sunday in the state of Vargas, north-east of Caracas, and in the city itself, and the process was if anything more impressively run than in Britain - and certainly the US - with opposition monitors everywhere declaring themselves satisfied with the integrity of the ballot.
Of course, the campaign was the focus of the most mendacious propaganda, both at home and abroad. There was not only the absurd claim, recycled endlessly through the international media, that the new constitution would make Chávez "president for life" (rather than subject to the same rules that operate in France or Britain). In Venezuela, anonymous advertisements indirectly paid for by US corporate interests ran for days in the best-selling paper insisting that, if the constitutional reforms were passed, children would be taken from their parents and private homes nationalised.
Anecdotal evidence suggests such nonsense had some impact. The Bush administration has been funding elements of the opposition, including student groups (as reported at the weekend in the Washington Post), which were at the forefront of the "no" campaign. But after winning 11 national votes in nine years, the Chavista movement was clearly also complacent: the process was rushed; and there was a lack of clarity among many Chávez supporters over what was really at stake. Milk shortages that suddenly materialised in the last couple of months certainly didn't help. There is also discontent over crime and corruption, including the role of the "boli-bourgeoisie" grown rich under his presidency. Crucially, it was the abstention of Chávez supporters, especially in poorer areas, rather than greater support for the opposition, that lost the vote.
That suggests those voices in the Chávez camp now calling for slower and less radical reforms may be missing the point. The revolutionary process underway in Venezuela has already delivered remarkable social achievements in a society grotesquely disfigured by inequality, by redistributing oil revenues and unleashing direct democracy to push through social programmes. As Teresa Rodriguez, a mother of three, told me at a meeting of one of the new grass roots communal councils in the Catia barrio in Caracas: "We didn't have a voice, now we have a voice."
Since Chávez came to power, the poverty level has been slashed from 49% to 30%, extreme poverty from 16% to below 10%; free health and education have been massively expanded; subsidised food made available in the poorer areas; pensions and the minimum wage boosted; illiteracy eliminated; land redistributed; tens of thousands of co-ops established, and privatised utilities and oil brought back under public ownership and control.
It might be imagined that such a record - for all its weaknesses - combined with the clear demonstration of Venezuela's democratic credentials this week would attract more sympathy among some of those in the west who claim to care about social progress. Presumably concerns about Chávez's fierce opposition to US imperial power bother them more than the reality of life for Latin America's poor.
But there's little doubt that the fate of the Venezuelan experiment will have an impact far beyond its borders. So far, the cushion of oil has allowed Chávez and his supporters to make rapid progress without challenging the interests of the Venezuelan elite. The dangers of the movement's over-dependency on one man - not least from the threat of assassination - were underlined by the referendum experience. What is certain, however, is that the process cannnot stand still if it is to survive - and to judge by Chávez's response to his first poll defeat, he is in no mood for turning back. We weren't successful, he told the country, "por ahora" - for now.
s.milne@guardian.co.uk
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