Archive for April, 2011

Swindles and Snares

Evening all. Things have been very busy of late, leaving little time for writing here. I hope to address this over the next few weeks. In the meantime, in the absence of any consequent ideas on my own part, I figured I would translate yet another article from Spain, from Vicenç Navarro’s website, originally published in Público. As I’ve said previously, it’s quite striking just how many similarities abound when you look at the roles played by the government, the media, the financial sector and so on in the crisis playing out in different countries. One difference between Ireland and Spain at the moment is that Spain is not under the thumb of the IMF, but it’s important to remember just how much of the economic measures taken in Ireland prior to the EU-IMF bailout had, in fact, been taken by the government in consultation with both of these entities, and how vocal, then as now, the finance, business and media establishments in Ireland were in support of brutal austerity policies.

A myth that has sprung up since November is the idea that the date of the bailout marked the loss of Irish sovereignty. In fact, in so far as sovereignty might indicate the potential and the willingness to deviate from the path set out for you by others, Irish sovereignty had long been ceded. But even at that, thinking about sovereignty in this way is a form of revisionism. Whilst in the years preceding the EU-IMF bailout the Irish State may have acted relatively autonomously, this is entirely different from the notion that the Irish State was beholden to any significant degree to the popular will, as opposed to the will of financial speculators, construction magnates, the American Chamber of Commerce, and so on. On this question I tend to think Bakunin’s assessment of representative government applies well to the Irish situation, particularly in light of the immensity of the financial burden now imposed on the working population, that ‘universal suffrage, considered in itself and applied in a society based on economic and social inequality, will be nothing but a swindle and snare for the people; nothing but an odious lie of the bourgeois democrats, the surest way to consolidate under the mantle of liberalism and justice the permanent domination of the people by the owning classes, to the detriment of popular liberty’.

It might be useful, whenever you hear someone lament that ‘we’ve lost our sovereignty’ to say to them that they really mean ‘we’ve lost our democracy’, since the point of a sovereign democratic state is that, as Navarro notes below, the power of the State derives from the will of the people. If the state goes against the will of the people in some matter, by, for instance, privileging the welfare of finance capital oligarchs over the welfare of its citizens, then it is not that the state is not sovereign, but that, from the point of view of the State, the people are not sovereign.

This piece, titled ‘Rebel!’ (¡Rebélate!), was published on the 14th of April, the 80th anniversary of the Second Spanish Republic.

This article questions the theories spread widely in the country’s political and media establishments of how the highly unpopular measures imposed by the Spanish state (centrally and regionally) are a response to the demands of external factors such as the financial markets. This article shows that this emphasis on external factors dilutes the importance of internal factors, which are those which determine such policies. Such policies are a response to an enormous concentration of financial and business power that is damaging not only the welfare state, but also democracy in Spain, widening the distance between the governors and the governed. The article concludes with the need for mobilisations in order to recover democracy in Spain.

This article is a reflection on the present, taking the past as a guide to where we ought to go. After all is said and done, republican values are the highest expression of the democratic values that we would have to uphold in a political system, in which each citizen should have the same decision-making capacity in the governing of the country, without electoral laws or restrictions that give more weight to some than to others, as is happening in Spain. The flawed transition from dictatorship to democracy produced a scarcely democratic culture and an electoral process that was designed – has some of its designers have recognised- to weaken broad sectors of the left. It has meant that, even when surveys show that the majority of the Spanish population is on the centre-left and left, left policies (despite great advances) have not dominated the majority of legislative behaviour during the democratic process. The State’s considerable lag in Spanish welfare (with the lowest per capita public spend in the EU-15), is one indicator of this.

Our electoral system is scarcely representative and it shows. And this low representativeness in the Spanish parliament (which is recreated in the regional parliaments) is accompanied by a set of parties, the majority of which are enormously influenced by big news outlets and lobby groups, among which finance capital plays an essential role. As such, we have seen how a consensus has been developed among the political and media establishments of the country as to the need to delay the retirement age from 65 to 67 years, a legislative proposal by the government which was approved almost unanimously in the chambers of the Spanish parliament. This near consensus stands in contrast with the enormous unpopularity of this measure among the citizenry, the great majority of which stands opposed to it. According to the Spanish Constitution, the power of the State derives from the will of the people. But, if we compare what it is that the citizenry wants on the one hand, and what different branches of the State (and, especially, the legislative and executive branch of the State) approve on the other, there is a significant contrast.

Another example of this are the measures the State has taken to get out of the crisis (from the freezing of pensions to the radical cuts that are now being applied to the already underfunded services of the welfare state). The unpopularity of these measures is very high, but this is not an obstacle to their implementation, since they are promoted by the majority of broadcast media outlets. These outlets editorialise and repeat grindingly that there are no other possible measures in response to “external” factors, in this case, the financial markets. They accentuate with high intensity that which is “external” in order to dilute internal responsibilities. But what is external is a mere excuse to carry out what the financial, business, political and media establishments have always desired: to weaken the labour market to optimise the interests of capital. It is what used to be called “class struggle”.

Naturally there are variations in social classes and their conflict is expressed in many ways. But today this conflict is the vast majority of the population (working class and the majority of the middle classes) against an enormous concentration of Spanish financial and economic power which, in tandem with its foreign allies, is imposing itself on the majority of the citizenry. For example, to reduce the deficit, instead of freezing pensions and cutting spending in health, education, home help and other areas, they could have recovered 35 billion euro by imposing taxes on the most privileged sectors (without affecting the majority of the population), as both tax inspectors and the Ministry of Economy itself have suggested. Furthermore, by correcting the enormous fiscal fraud -which primarily benefits the banking sector, large businesses and those on high incomes (eliminating, for example, fiscal paradises), as well as reversing the regressive fiscal cuts carried out over the last 15 years – 80 billion euro more could be obtained.

It is not, then, what is ‘external’ but what is ‘internal’ that is blocking the expression of the democratic process. And the citizenry is aware of it. Survey after survey shows the alienation of the citizenry from the political class and from those who govern. Our democracy is seriously threatened. It is for this reason why there is an urgent need for mobilisations to continue the struggle begun by previous generations in defence of democracy. Our parents fought to defend democracy and they were brutally repressed as a consequence of their defeat. My generation fought in the difficult 50s, 60s and later in the 70s, standing opposed to the dictatorship. It was this struggle and others that were responsible for the end of the dictatorship. It should never be forgotten that although Franco died in his bed, the dictatorship died in the street.

And it is now that one must struggle to recover the democracy that is being held captive, in which the State is adopting positions systematically against the majority of the population and against its wishes. This is an outrage and it requires popular mobilisations based in the republican values that demand of the State that it respond to society and not, as is happening now, that it acts against it.

‘A Prime Example of Omission’

Normally, so little do Eoghan Harris’s columns coincide with reality that it would seem churlish to take issue with something he has to say. On this occasion, however, the tension between the vehemence of his utterances and their foundation in fact was simply unbearable, and the snap had me jump to attention.

The bias against Israel — which is also a form of reflex anti-Americanism common among left liberals — is a prime example of omission. RTE gave plenty of coverage to the Goldstone report on the flotillas, but it did not regale you with Goldstone changing his mind.

You were probably already aware by now of the tenacity of Harris’s support for the state of Israel. In past columns with his lavish praise he has really spoiled Israeli ambassadors. But the tenacity of his support is clearly unmatched by any tenacity in taking an interest in what the Israelis like to call the ‘facts on the ground’.

There was no Goldstone report on the flotillas. The Report of the United Nations Fact Finding Mission on the Gaza Conflict, to give it its proper title, was published on 15th September 2009. The Gaza flotilla raid took place eight months after the publication of the Goldstone report, and nearly a year and a half after Israel’s invasion of Gaza, in which 1,389 Palestinians were killed, including 318 children.

No surprise, then, that Harris does not regale you with any details -a prime example of omission- as to how exactly Goldstone changed his mind. If, that is, Goldstone even changed his mind at all. Rather than pay any heed to what he is writing about, or anything that might involve giving the deaths of Arabs any importance, Harris is content to regurgitate Israeli propaganda, in a fashion that recalls the crude methods of holocaust denying cranks. But he can’t even do that properly.

Living And Dying On Your Knees

I was asked on Facebook to translate this piece by Luis García Montero from his blog La realidad y el deseo (‘Reality and Desire’). So here it is, sorry it’s a bit rushed.

Living And Dying On Your Knees

In his book The Memory Chalet, written while a lateral sclerosis paralysed his body until it brought him unto death, the historian Tony Judt makes a lapidary observation: “We know perfectly well that unlimited faith in deregulated markets kills” [my translation of LGM -HG].

Judt, who for many years denounced the dictatorships of really existing socialism, is at strenuous pains to explain that neoliberalism, that modern devourer of social feelings [in the original, ‘sentimientos sociales’ – I think the reference is to Mill – HG], has become a totalitarian straitjacket. According to Judt, the best way of measuring how much an ideology enslaves a people is by the collective incapacity to imagine alternatives. A feeling of impotence defines well the state in which many citizens, caught up in an alarming degradation of democratic reality, in an economy ever more unjust and a sovereignty ever more limited, bow to the official diktats of the bosses of financial institutions. Everything boils down to one diagnosis: you people must earn less and lose rights so that the speculators reap better profits. And whoever wants to dissent from this logic appears cast into the abyss.

Neoliberalism kills. I am reminded of Tony Judt when I read a study published by David Stuckler in the British Medical Journal, “Budget crises, health, and social welfare programmes“, in which he analyses the relation between government cuts and the rise in mortality rates. We make savings at the price of speeding up our journey to the grave. Deaths from tuberculosis will go up 4.3%, and cardiovascular deaths up 1.2%. It is against this vital horizon that the civilised right-wing which governs in Catalonia has announced it will cut its health spending by 10%, joining the club of public health dismantlers, led by the regions of Madrid and Valencia. According to surveys, citizens are going to use their vote to sharpen that ideological trend towards health privatization. We are living, and we will die, on our knees [the obvious reference here is to Dolores Ibárruri, who was citing Emilano Zapata -HG].

The political direction seems clear. It is a matter of driving the middle classes out of the public health system. Whoever can pay ought to pay for his own health. Public services will attend to only the poorest. And of course, as deputy Gaspar Llamazares denounces frequently, medical care for poor people is poor medical care – the provision of charity services instead of a universal right. Citizens will be held to be irresponsible should they insist on maintaining their rights. They will bear all the blame for the calamities from demanding unsustainable spending. Against this the best neoliberal prescription involves cutting back on public spending and faith in private initiative.

Spending cuts? Although the totalitarian ideology of neoliberalism prevents us from imagining alternatives, actual facts are stubborn. The new hospital in Asturias, launched with direct public investment, has cost €350 million. The hospital in Majadahonda, with fewer beds, thanks to the invaluable participation of private initiative, is costing us €1250 million. A report from the UGT (those bothersome unions!) shows that a hospital bed, as part of a public private partnership, costs 30% more than in the public system. Do we need to make savings? Check out this piece of data analysed by CCOO. The eight hospitals in Madrid created through Private Finance Initiatives will cost €5000 million. Direct public investment would have lowered the cost to €700 million. Now that the property bubble has burst, we can figure out already where the speculation that so drives Esperanza Aguirre‘s Madrid insiders has been hidden. And for the supporters of co-payment as the bona fide way of saving, another datum: Spanish pharmaceutical spending, an area where such good counsel has been adopted, is double the cost of the European average.

The totalitarianism of neoliberal ideology has to be very strong indeed to make us line up to swallow these millstones. Tony Judt died of paralysis. So will we, unless we imagine an alternative.

Property-Owning Democracy Now!

Indebted generation must find their voice – The Irish Times – Tue, Apr 12, 2011

negative-equity generation should be out on the streets – but it’s hard
to embrace collective power when you’ve grown up an ardent

If Fintan O’Toole wanted a here’s-one-we-made-earlier explanation for why the group he names as the ‘negative-equity generation’ has not staged any sort of revolt, he could have looked at the name he gave it.

The ‘negative-equity generation’, which is to say, those people who bought property and whose outlay on said property now exceeds its market value, have a vested interest, namely their house, in the reproduction of the same social relations that fostered the boom in the first instance. To be primarily concerned with negative equity, ceteris paribus, is to hang on to the same values that kept you primarily concerned with positive equity, AKA ‘equity’.

Negative equity will never be the basis or the defining characteristic of a socially progressive movement, because it depends on the very values that trample on social solidarity. It is pointless to await the voice of a generation so defined to make itself heard, because it won’t happen.

Whilst we are often invited to think of home ownership as a primal urge swelling deep in the Irish collective unconscious, and bungalows with plaster geese wearing trousers as the manifest content of nightmares of the eviction and flight of ones’ ancestors, an apparent fetish for home ownership is nothing special in neo-liberal states.

It was Margaret Thatcher’s ideal that Britain be transformed into a ‘Property-Owning Democracy’. What was intended was that working class people would internalise capitalist values, focusing their attention on the appreciation of their own assets -whether land, bricks and mortar or company shares- and away from such patent evils as collective bargaining, universal benefits and services and any institutions that might perpetuate social solidarity.

But the success of these initiatives on people’s consciousness is not as clear cut as the dominant media of their societies might represent it.

It was not at all, as O’Toole would have it, that people who bought into this system perceived that risk was preferable to security. Let’s recall again what Wilde said about how there was only one group that thought more about money than the rich and that was the poor: amid the widening inequality that characterises neo-liberal societies, ‘risk’ is the justification for the accumulation of massive wealth on the backs of others at the top end, whilst people further down see the acquisition of debt as the only means of obtaining security.

If the rate of increase in house prices is many multiples the rate of growth in your wages, then why would you not seek to buy a house? It has nothing to do with greed: it is the feeling that you are getting progressively poorer because the cost of accommodation rises relative to your wages. Then, when the bubble bursts, it emerges in the cold light of day that it is the most wealthy who feel security is always preferable to risk.

The rich need constant reassurance from governments that the working class is getting pummelled -through the dismantling of the welfare state, the worsening of working conditions, and the threat of unemployment and destitution- so that profit margins are protected.

Meanwhile the working class, who have acquired massive mortgage debts, must shoulder in addition the risks associated with insecurity and falling living standards: disease, psychological trauma and early death. And those who still have jobs, as O’Toole notes, are very frequently unable to organise along traditional lines, but they still have to pay the mortgage or the rent every month.

When, for mortgage holders, the payment burden increases on account of an interest rate rise, or -what is for them the same thing- they get their pay cut or their taxes raised, the most important thing for them is to hold on to their job so that they can keep afloat and not sink into poverty.

The combination of deep indebtedness and the need to hang on to a job might engender political docility, but this is hardly the stuff of being in thrall to neo-liberal consciousness. Sure, some of them will identify with the ‘common sense’ prescriptions of right-wing economists and managerialist oligarchs, but this is not least because they identify -understandably, and not entirely unreasonably- the prosperity of their employer with their own prosperity.

How does O’Toole know these people think trade unions are an anachronism, as opposed to organisations they perceive as not doing enough to represent their interests? How does he know they think protests are a hippy-dippy indulgence and not a doomed endeavour because whenever they have seen mass protests organised, they have never produced anything concrete?

I sense that he’s too easily led by the images of other people produced by the media institutions of the dominant class.

Seeing It Happen In Other People’s Lives

Last night I started to wonder what the likely consequences on the population will be once –if- austerity in Ireland becomes fully embedded as a fait accompli. While I’ve nothing but contempt for the present Irish government, I take no pleasure at all in the spectacle of the Irish parliament incapable of doing anything as a legislative body beyond ganging up on the population, mainly at the behest of the EU-IMF-ECB, but also in intense collaboration with the local power elites.

The most worrying question for me at this point is not whether the current government will successfully duck and dive to salvage this or that -most likely, some aspect of corporate taxation that principally benefits the US Chamber of Commerce- but whether the population, which needs an assertive labour movement, can mobilise against the deepening structural violence. If it does not, I fear the worst. We are not just talking economic collapse, but the complete collapse of democratic forms and full-blown corporate takeover. I’d much rather be able to say, “ach sure it’ll be grand”. But it won’t.

There has been no significant show of union strength since the ICTU march in November. And even that event, for the most part, had a valedictory feel to it: Labour was due to go into government soon, which meant there was a nice neo-liberal donkey for union leaders to pin tails and hopes on.

I wrote in the crisisjam piece last week about the need for the formation of new alliances that took into account the international character of the crisis. With this in mind, the ICTU meetings scheduled with EU trade unions certainly seem like a good idea. Now, I’ll be the first to admit that my knowledge of what goes on at high-level trade union discussions is up there with my knowledge of Malay dialects, but if you look at the content of what is up for discussion (or at least, what members are told is up for discussion) it is alarmingly bland, and seems to have internalised wholesale the grammar and vocabulary, if not quite the prescriptions, of neo-classical economic writing.

It is as though someone had been going through the Financial Times Lex column for bits and pieces on Ireland and cobbled a few of them together for a presentation. Can you imagine going to Germany and meeting with the unions and talking about how great it is that Ireland has the second most open economy in the world, as the list of talking points does, when big German unions have negotiated deals with their big export firms (Siemens, BMW, Daimler, ThyssenKrupp) to guarantee against job losses to overseas, and this in turn has contributed to a quick German recovery? It is enough to make you chew off and swallow your own fist in anger.

Anyway, with the whole international dimension to things still in mind, I thought I’d post a translation of a piece by Vicenç Navarro, Professor of Health and Social Policy at Johns Hopkins. His pieces are published regularly in Spanish in Público, and he has a lot of English language pieces on his site too. The title of the piece is ‘Recovering Democracy’, and the focus is Spain, which, post the neo-liberal assault on Portugal today is likely to be next on the hit-list.

I am not feeling so optimistic these days that I would set too much store by Navarro’s claim that popular mobilisation will occur if the people are given the necessary information to get indignant about things. But it is a necessary condition all the same. One of the things you notice reading pieces like these is just how goddammed familiar the whole thing is.

Like I was saying last week, because the focus of so much media coverage of the crisis in Ireland is in terms of national collective shortcomings and mistakes (which, naturellement, has to be remedied by the same power elites who brought about the crisis in the first instance: people like Gary McGann, former Anglo Irish director, current IBEC board member and the sort of person so riddled by sloth that whilst the bosses’ group of which he is a board member was calling for wage cuts he needed an extra 400 grand in 2010 just to haul his ass out of bed in the mornings.), it comes as something of a cobweb-blasting exercise to engage with how much reality over there overlaps with reality here: public spending slashed, below average levels of public spending in the first place, a tax-dodging elite that reproduces itself through state subsidy for its schools and connives with big banks to dispossess the majority of the population, government ministers who lay claim to social democratic credentials but obey the dictates of the markets. And, as Navarro shows, the solution is scarcely any different for Spain than it is for Ireland.

Recovering Democracy

These days we are seeing popular mobilisations throughout the world –from the Arab countries to Wisconsin, via the majority of countries in the European Union- that demand changes from the policies implemented by governments and states that appear insensitive to the desires of the majority of the population. In these demonstrations –despite the broad diversity of situations- there is a common element: protest in the face of an enormous concentration of economic and political power that inhibits democratic expression. And one example of this is Spain.

In Spain we can see the implementation, on the part of the State (both centrally and in the autonomous regions), of substantial cuts to public spending, including the social spending that funds transfer payments –such as pensions- and the public services of the welfare state such as health, education, home help for people with dependencies, nursery schools, social services, and others.

These cuts are markedly affecting the quality and coverage of such services, worsening the existing situation, which was already inadequate before the crisis began. Spain in 2008 was at the tail of the EU-15 for social spending. We spent on the welfare state only 19% of GDP (the lowest of the EU-15, whose average was 24%, whilst that of Sweden was 28%). A consequence of this is that only 9% of the adult population worked in welfare state public services (the average of the EU-15 was 15%, and in Sweden, 24%). The cuts taking place now are reducing even further such employment.

The power structure (which is based in 20-30% of the population, those with the highest income) does not appear aware of this enormous lag and underfunding, since it principally uses private services. They send their children to private schools (which receive the highest subsidy among the EU-15) and when they fall sick they go to private health care. This power structure (which has enormous political and media influence in Spain) promotes the message that there is no alternative to such policies of cuts. They argue that one must cut public spending to reduce the budget deficit and public debt, in order to calm the markets so that these will lend us money at reasonable interest rates.

This explanation, which on the back of having been repeated thousands of times has become a dogma, is profoundly wrong and it is promoted because it serves the interests of this power structure, which uses the pressure of the financial markets as an excuse to carry out what it has always desired to do. The data shows clearly that it is not true that in Spain there are not enough resources to fund a first class welfare state. Spain is not poor. The GDP per capita is already 94% of the EU-15 average, but the social spending per inhabitant is only 74% of the average social spend in the EU-15. If we spent what corresponds to us according to the level of economic development that we have, which is to say, the 94%, we would spend 80bn euro more, with which the enormous shortfalls could be covered. Spain, then, has the resources. The problem is that the State does not collect them. Instead of this, the State has been seeking loans from foreign banks, acquiring debt and scantily funding its welfare state. Spain, like Greece and Portugal, has very low tax receipts and a very high level of exchequer fraud. As was surprisingly admitted by a Deutsche Bank chief, one of the most important bankers in Germany, “there existed in the years of the boom an alliance between the most well-off classes of the periphery of the European Union, who did not pay taxes to the State, and the banking sector, which has profited from the low tax burden by lending money to the State for funding its social dimension.”

And there is the root of the problem. The power structure is not contributing to the State what it ought on account of its level of wealth. The manufacturing worker in Spain pays 74% of the taxes of the manufacturing worker in Sweden. The businessman only pays 38%. And, to make matters worse, the State has reduced taxes more and more, which has benefitted those on higher incomes above all.  The tax inspectors themselves have indicated there could be more than €38bn collected, focused on these sectors of society without affecting the tax burden of the majority of the population. The budget deficit could be reduced by raising taxes on these sectors instead of impoverishing the welfare state even further.

In reality, during the crisis the vast majority of the firms on the Ibex-35 have continued to enjoy large profits, with the Spanish banking sector one of the most profitable in Europe. Banco Santander has achieved €35bn in net profits (it is the most profitable bank in the world, after two Chinese banks).

These cuts in public social spending are being made despite the fact that the majority of the population is against them. It is yet another decision (another is the delay to the obligatory retirement age) which shows the enormous distance between those who govern and those who are governed. More and more, the political and media establishments that direct our country are imposing measures against the will of the citizenry. As a consequence, the population, in its indignation –which will occur if it is provided with information that questions the dogma that there is no other alternative- ought to demonstrate and engage in social agitation to bring democracy back to Spain.

Preservation Society

I have an extended and updated version of the other day’s piece on Crisisjam.

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April 2011