International Workers of the World

The question of immigration has been off limits for the left until fairly recently. The discomfort of left-wing intellectuals at being seen to be racist or unwelcoming has been skilfully manipulated by those whose interests have been well served by the influx of cheap powerless labour.  A worker without papers is a non-person, a person who has no legal rights who can do nothing to defend him or herself against exploitation. Globalisation has weakened the power of unions, as we have forced to compete with the slave-like conditions and wages of workers in China and the other ‘emerging’ economies across the world. The hard political-economy truth is that this process was greatly exacerbated by the desperate movement of illegal workers who travelled the world to chase the flow of goods and capital.

A few renegade intellectuals, notably David Goodhart and Maurice Glasman, have recently broken ranks, arguing that Britain’s white working-class have lost their means of livelihood as well as identity and that this is the root cause of our social malaise. Sadly, Goodhart in particular has failed to match his explanation of the impact of immigration with condemnation of the overtly racist policies of right-wing politicians who are seeking to capitalise on the unease this causes and so has lost much credibility. Glasman is by nature a contrarian and the clear division between his position and that of Labour’s traditional intellectual community has effectively led to the break-up of the ill-fated ‘blue labour’ project.

The target of Goodhart and Glasman were the middle-class intellectuals who adopt a liberal position on immigration without considering its impact on those in more vulnerable situations. Those with more liberal attitudes towards migration tend not to live in the neighbourhoods of our cities where they need to think about what the migration of such people does to the life chances of their children whether in terms of employment, housing or social services. Little surprise, then, that a recent survey of British social attitudes shows negativity to immigration to be closely allied with social class. The Gs might well agree that we are operating with outrageous double standards – exporting our language, companies, TV shows, media stars but objecting when those on the receiving end of this barrage choose to seek its origin personally. But the reality is that the migration of doctors and lecturers and engineers, who travel the world selling their skills, is a world apart from the migration of desperately poor economic and social migrants who sell their bodies and their souls.

If you are beginning to feel a little hot under the collar at this point it is worth wondering whether we have all been duped by this discussion: is it not a classic case of divide and rule being exercised on the commentariat by the corporate elite? Because the question of immigration is not really a question of immigration at all. The political furore caused by the racist vans is just window[1] thrown by the political establishment. The present media and political bombardment creates a huge noise to attack or defend people from other nation-states who have become our neighbours. Such identity politics sucks you in and is a powerful distraction from the main issue, which is the consequences of the internationalisation of labour and the utter failure of those whose political project should be to protect the conditions of working people to make a political response. 

Globalisation is a reality now, albeit a reality I would rather see reversed, for reasons that stem from my concern for the huge energy demand engendered by the movement of both people and goods. If it is here to stay then the rules governing the global capitalist system need to be negotiated by the people of the world: this should be where our energy is focused. Whether in terms of taxation or workers' rights the framework that governs the global market should be negotiated by democratic means and with social and ecological objectives. The failure of this most basic form of justice is why our lives appear more Dickensian every year. In a horrifying global echo, the national degradation that the first round of capitalism left in its wake, represented by the human flotsam of prostitution, drug abuse, gangsterism and cultural decay found in Victorian Britain, now characterises the cities of the world and is fast returning home. We are the International Workers of the World, and we have never been needed more.

Thanks to Chris Hart for some really insightful comments on an earlier draft of this post

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[1] Wikipedia: a radar counter-measure in which aircraft or other targets spread a cloud of small, thin pieces of alumninium which either appears as a cluster of secondary targets on radar screens or swamps the screen with multiple returns

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How is the Chancellor Engineering a Pre-Election Boom?

After several years of dire economic news, suddenly, just about the time when parliament went into recess, the stories about the British economy changed. Almost overnight we moved from gloom to boom, with Osborne celebrating 0.6 growth and the euphoric tone of the journalists outstripping that of the Chancellor. With an election now just 18 months away, and it being certain to be an election dominated by arguments about the economy, this has made me rather suspicious about how this return to economic joy is being measured, and how the dark forces of monetary manipulation might be influencing it.

I am not alone in my suspicion that the happy economic news may not be all that it seems. The traditional left, however, limits its critique to the suggestion that the increase in GDP is being driven by the retail sector and is based on withdrawn savings by those who can no longer wait for their wages to rise. Frances O'Grady's claim that 'Britain's fragile recovery is being propped up by families raiding their piggy-banks' is supported by ONS data showing that the ratio of household spending to savings has fallen from 7.4% for 4.2% in the past year.

What first made me nervous about the 'return to growth' was Faisal Islam's excessive use of superlatives on his Channel 4 News report on Monday. He has Capital Economics predicting 1.5% growth in this quarter alone, with huge increases in both business confidence and business investment. This caused me to think back to the stories of companies sitting on cash (largely accumulated as a result of the government's loose monetary policy via QE) because of fear of investing it. There was much discussion of how the Chancellor might encourage companies to invest their cash-pile to revive the economy, including the suggestion that he might impose a levy on them for stagnant cash holdings.

Has the Chancellor somehow found a way of encouraging UK corporates to start spending the £750bn. they have in reserves (incidentially, a figure equal to half the UK's annual GDP)? Certainly his proposal for tax relief on smaller companies, who apparently hold around £120bn. of the total, which was included in last year's autumn statement, may be beginning of have an impact. But is there some other incentives for companies to invest, or threat do them if they do not?

The less subtle evidence of engineering is in the form of the incentives to restart the housing market, that well worn engine of unsustainable booms past. The Help to Buy scheme supports purchasers of new homes to take on mortgages that the banks think they cannot afford to pay. It is thus risky in two regards, since it will tend to keep house prices at the sort of excessive levels that led to the financial crisis in the first place, and at the individual level it risks households losing their homes if interest rates rise. It does appear to have stimulated a boom in house building which helps to explain the higher GDP figures.

The manufacturing and production figures illustrated in the graphic make it clear that the hype over recovery is seriously overdone. Production and manufacturing - the sort of real economic activity that the Conservatives claimed they wanted us to rebalance towards - is still struggling and nowhere close to the level it was before the financial crisis. The improvements we see appear to stem much more from monetary manipulation and the shuffling of cash between various elite players. This sort of wealth does not find its way down to those on average incomes who are struggling with the consequence of the capitalist disaster of 2008.

However, the Conservatives are playing the politics of this extremely cleverly. The Chancellor is likely to come out of his term in shared government with the public sector smashed up and Labour vowing to continue with these destructive and draconion cuts. The recession has also led to a culture of fear amongst employees, who are accepting reduced wages and appalling working conditions, as exemplified by the zero-hours contract. A success for George and his cronies but the real problems around the failure of manufacturing, the ongoing trade deficit and lack of resilience in our local economies and the iniquitous failure of the banking system are all yet to be addressed.
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No Fracking Way

I try not to be too party political on this blog, but it will hardly have escaped notice that I am the Green Party's Economics Speaker and that I have been selected as the top candidate for the south-west for next year's European Elections. So I will be seeking votes during this year, although I hope this will not affect the focus of the blog too heavily.The reason I stand for election is because I would trust myself to make the right decisions for the right reasons more than a member of any of the other parties. Unless you have decided that democracy is so corrupt that it is best avoided, a position I think has been created and is being reinforced by the corporate lobby, then you will end up having to make a choice next year and the following year.

Which brings me to the purpose of this blog: to express my utter disgust at the prospect of the fracking industry turning into some sort of Wild West boom in our pleasant countryside as it has in the US, and to explore how the other parties are reacting to the possibility of fracking. The evidence is that all three parties that make up the corrupt political establishment are supportive of this new, dirty and expensive fossil fuel. In their world, where economic growth is the holy grail and profit is king, bizniz must chase after this next opportunity to make money and we must bear the cost in our communities.

I am starting from my backyard because it is the part of the world I feel responsible for protecting. I grew up in Bath and brought up my own children in Blagdon, in the Mendips, so I found to my horror that licences have been granted all round that area, seeking to exploit the gas reserves in what was once the Somerset coalfield. The local campaign group Frack Free Somerset have provided a map of the licenced areas and also a list of suggested actions you can take.

The economics of fracking demonstrate the extractive and exploitative approach to everything of value typical of capitalism. Licences to what are natural resources, and therefore in my book a common heritage, are auctioned by the Department of Energy and Climate Change. The prices look absurdly cheap to me, which probably explains the glee with which the energy industrialists are pushing forward with fracking. Cuadrilla's licence to destroy the Forest of Bowland in Lancashire cost just £160m. for an area of 450 square miles between Blackpool and Preston. There are tax breaks too: Britain will have the lowest tax rate for the fracking industry anywhere in the world, with a tax break called the 'shale gas allowance' more than halving the tax payable from 62% to 30%. This is one of Osborne's wheezes to make the economy boom in the run-up to the 2015 general election, and our local environments will bear the cost.

With their friends and relatives in the oil industry and advisor Lynton Crosbie also having strong links to the oil and gas industry we should not be surprised that the Tories are supporting fracking. What about their partners the Liberal Democrats, those well known supporters of all things enviromental? When he spoke at the end of the last parliamentary session, Treasury Secretary Danny Alexander could hardly contain his excitement at the prospect of so much money to be made. It was Alexander who announced the bribes for local communities, which are in fact paltry compared to the profits to be made. For a mere £100,000 and 'at least 1 per cent' of overall revenues undefined 'communities' are lured into selling the birthright of their grandchildren. Unsurprisingly, where profits are concerned it turns out that it is not we who are the 99%.

As befits a party seeking election within the next 18 months, Labour has been less sanguine about the prospects for such an unpopular and exploitative industry. Back in June 2011 Labour's energy spokesman Huw Irranca Davies called for a temporary moratorium while a review on safety was undertaken. His replacement as shadow energy minister, Tom Greatrex, continues the line of the need for better regulation rather than opposition to fracking in principle. In an interview with Business Green he argues explicitly that 'an absolutist position' is not in our interest, so we cannot expect opposition to fracking from Labour, whose opposition is avowedly conditional.

Aside from the planetary pollution there is also the certainty of more local environmental pollution. Fracking is a vile industrial process that uses toxic chemicals that will contaminate our land and our water supplies. It is entirely inappropriate in our small island. It will set back the attempts to reduce our climate-damaging carbon emissions, which were already failing due to inconsistency and attempts to revive the economy through boosting energy-intensive consumption. But it also provides a way of avoiding the fundamental changes to our lifestyles and industrial processes that we know are ultimately necessary. To support fracking is like a parent encouraging their child to eat more sweets and drink more fizzy drinks while at the same time telling them that they need to lose weight.

So, you know where I am going, and I at least have the excuse of having made this clear from the start. If you really want a party that will oppose fracking as part of a consistent policy to reduce energy use and undertake a transition to a fossil-free future you know what to do. The Green Party stands against fracking. Caroline Lucas's rousing speech this past weekend at Balcombe makes the arguments clear, but in case you think we are jumping on a bandwaggon you can also watch her demolish the greedy pro-frack apologist on Newsnight in March 2012, while successfully putting Paxman in his place. As she argues, fracking will divert effort and investment from the expansion of renewables that is so urgently needed. It is dirty and dangerous to our health: we must stand together to oppose it.
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Climate Change and Cognitive Dissonance

The most recent edition of the British Social Attitudes survey has some interesting findings for those of us struggling with the cognitive dissonance that characterises public policy towards climate change. While the government may be chasing after the dollar with heedless disregard for the future of the species, for example by relentlessly increasing the cost of rail travel and increasing the pressure for new airport capacity, the British people are actually convinced that climate change is happening (76%) and that transport is a major factor contributing to our impact on the climate (although this percentage is down from 80% seven years ago to 65% today.

It is clear, however, that the failure of political leadership in the field of transport policy is affecting public opinion. If the government produces farcical and trivialising messages about the impact of our transport decisions - as in the notorious example of the advice about solving climate change by driving 5 miles less per week - then we can hardly be surprised if people see little need to change their travel habits. According to the report 61% of people think that they should be able to fly as much as they like, and 18% maintain this right even if it harms the environment. Conversely 55% think everyone should reduce their car use for the sake of the environment, but 47% see no point in doing so unless others do the same. The clear pro-car policies espoused by the Tory-Lib Dem government are a clear signal that others are not expected to do the same and therefore, in themselves, undermine the motivation of the socially and enviromentally conscious half of Britain.

What emerges from the data around the perceived impact of transport decisions is that they are driven by the nature of media and political messaging rather than by the scientific evidence. As we passed the spine-thilling 'milestone' of 400 parts per million of carbon dioxide in the global atmosphere earlire this year, the percentage of people in the UK who stated that air travel has a serious impact on climate change returned to its 2005 level (64%), before all those warnings about how climate change is more threatening than global terrorism. And the percentage thinking that car use has an impact on climate change had fallen significantly from 77% in 2005 to 66% in 2011.

Human beings are not rational and we are not scientific. We respond to social pressure and to our desire to feel loved and experience pleasure. If people enjoy their two weeks in Thailand enough they can easily convince themselves that this has no impact on the lives of their grandchildren; they can walk the line of cognitive dissonance just like the government does. Many of us have already chosen to abandon flying and driving and live in communities where it is already unfashionable and socially unacceptable to fly casually and frequently. But more important is the need to redouble our efforts to emphasise this as a political message about renationalising railways and reducing the need for car journeys to school or work, because changing our attitude towards travel is a vital political issue rather than a personal lifestyle choice.
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Make Your Money Work Twice as Hard

It was Treasury Management training day today and as chair of the Audit Committee I get to receive up-to-date financial analysis. Our excellent adviser explained how the Funding for Lending scheme is effectively a replacement for the failed quantitative easing programme. The banks were sucking up the QE money and using it to balance toxic assets they had written off, without increasing lending. The Funding for Lending scheme made £80bn available to them explicitly for lending. The data shows that again they have absorbed the money without much coming back to the real economy.

Treasury Management is really just a piece of jargon for how we invest the money that we need to hold in case of emergencies or to support monthly cash-flow. Of course my aim for our investments is that they should be removed from banks and sent in the direction of socially useful activity. We are a small council without the massive investments of our county, Gloucestershire, which invests in cigarettes while simultaneously being responsible for public health. Our money is mostly in financial investments, the final destination of which we know little about. I would rather follow the advice from Move Your Money and seek to use our money twice.

The problem with councils making such changes appears to stem from the phrase 'ethical investment' itself. Since national rules says that council investments must be based on the three criteria of yield, security and liquidity, many of the investments that we might like to see our councils placing their money in are bound to fail to pass the test of the council's financial officers, either because they do not have a sufficiently strong credit rating or because the yields are lower than those offered by banks and money market funds.

But a council is a political body and so can adopt a policy that designates that a certain proportion of its capital holdings should be placed with organisations that align with its political objectives, rather than being part of an investment portfolio. So if it seeks to support those who wish to purchase houses locally it can invest some money with a local building society, perhaps requesting that they establish a particular fund to be made available to first-time buyers within its postcode areas. Or it could choose to lend money to local social landlords to enable them to build more properties, which will be used as collateral for the loan. Security and yield and still important, but the do not dominate over the council's other objectives.

It is early days for our council to consider whether it can ensure that some of its money finds its way into local economic activity rather than the large international portfolios of the banks. Our next step is to prepare a motion for the Audit Committee to chew over the advantages and disadvantages of such a proposal. And we need to discuss these suggestions with finance officers. But it seems that at least part of the £20 million pounds that we have invested can be used for social good rather than all of it being invested in the same banks that created the financial crisis that has hit so many of our resident and deprived us of the money we need to deal with their problems.

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Taxpayer as Shareholder

A guest post from Gerald Hartley, local green activist in Stroud and south-west regional elections co-ordinator

The British tax payer is a ‘shareholder’ in the state enterprise in all its many forms.  Over the decades this ‘enterprise’ accumulated assets worth billions of pounds. Coal mines, railway stations lines and rolling stock, power stations, steel works, canals, bus companies, lorry fleets, a national grid of gas pipelines and electricity lines, telephone lines, water mains and sewage pipes, pumping stations and treatment plants, council houses, hospitals, health centres and clinics, town halls, fire and police stations, roads and bridges, libraries, schools and colleges, elderly persons and children’s homes.  Why did it do so?  Because the private sector failed to provide all the things needed for the common good.

The Thatcher era began and governments ever since have continued, to sell those assets cheaply to the private sector and use the cash to make their financial performance look better than it was.  But now it is also a cover for the lack of revenue caused by the financial crash brought about by the very people that fund and support the Tory party.

Where asset sales cannot be justified, such as schools, pseudo-private organisations are constructed to eliminate democratic input and maximise elite structures. This is the very serious underlying aim of the Tory party – an elite society with everything owned and run by their friends and supporters to protect their common interests, untroubled by the rest of us.  They can see that financial crisis may come and go, but privatisation only gets reversed in a revolution.

So we the tax-paying shareholders in the UK state, have lost most of our assets, suffer reduced services, but pay the same tax and receive no dividends.  When the Tories crow that they have kept the council tax at the same level for 3 years, do you laugh or cry?  But it’s the kind of propaganda that keeps them at the helm.

In the 18th Century, there was little that the peasants could do to oppose the Enclosures of common land.  This saying, from that time, seems strangely apt all this time later.

‘The law doth punish man or woman
Who steals the goose from off the common
But lets the greater felon loose
Who steals the common from the goose’ 

Geese are not very bright.  So maybe it’s time for the ‘have nots’ to demonstrate that they are brighter than that and stop blaming Europe, immigrants or anything else handy and take the trouble to understand just how the globalised financial system is designed to benefit a tiny minority at the expense of the planet and every species living on it.

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Rewilding our Economy?

I went to see the second part of the documentary Wild Carpathia at the Romanian Embassy last night. It was a delightful event, although the audience were rather like characters out of a Forster novel waiting for the monsoon. Our patience was rewarded, however, by a lovingly crafted portrayal of a life in an unspoiled environment for which many of us are nostalgic but which still exists in the areas of Romania in the Carpathian mountains and the Danube delta.

I am interested in this idea of wild. It seems to refer to something out there, a way of life others preserve and that you/we can visit before returning (flying back) to our modern, electronically connected lives in complex, energy-intensive cities. And how wild is too wild? There are lynx, wolves and bears roaming free in the Carpathians, a source of delight to the film-makers. But how would we feel about our children playing in forests there?

Don't get me wrong: I am a sucker for the simple peasant life, and I particularly enjoyed the city of Sighisoara, where the historic towers were once used by the guilds to defend the city against invading Turks. Attempts are being made to revive the guilds and to keep their skills alive. This is all music to the ears of an economist like me who writes about a 'bioregional economy'. It was also interesting to note that it was the capitalist era that saw the most serious destruction of Romania's patrimony and that the communist regime protected the country's heritage and its natural beauty.

But I have a sneaking feeling that there is a level of inconsistency here: are the film-makers suggesting that we should idealise this lifestyle from afar, or is there a proposal wrapped up in the soft focus and ethnic music that we should attempt to re-create a land-based, self-reliant and simple life in England's green and pleasant land? While we are being invited to admire the peasants it is also suggested that our 'slow tourism' visits are essential to support their continued existence, which feels akin to philanthropy for the globalisation age and leads me to question why some of the world's citizens are granted the bounty to be able to patronise others.

To propose a future based around provisioning based on your local land is to risk ridicule and derision. Yet simultaneously many idealise exactly this kind of society outside their own backyard. While technological advances mean that the bioregional vision will represent a backward step, or a backward existence, it will still require a great deal more physical work and considerably reduced mobility. I would argue - and do argue - that quality of life would be massively enhanced, but how many would choose this as their daily reality rather than their annual escape?
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