Feminism is not finished

'Feminism is not finished'

After years of derision, feminism is finding its voice again, from grassroots protests to a flurry of books, websites and even a summer school. But will it lead to real change?
Kira Cochrane The Guardian, Saturday 24 July 2010

If you want to gauge the energy in the current British feminist movement, you have to speak to the young campaigners. Alex Corwin has defined herself as a feminist since she started reading avidly about women's issues a few years ago, aged 19. It made her "SO ANGRY", she had to become an activist.

Corwin joined a local grassroots group – Sheffield Fems– and since then she has taken part in campaigns that run the gamut: local, international, political, cultural. She could recently be found in a high-street newsagent, armed with Post-it notes to stick on the half-clad women in men's magazines, inscribed with the words "What if she was your daughter?" Once a month she and the group set up a stall in their local shopping centre, campaigning on issues including lesbian, gay, bisexual and transgender rights, and how climate change affects women worldwide. Last year the group helped organise a well-attended conference; in 2008, they ran a campaign to stop a branch of US restaurant chain Hooters (where lightly clothed women serve up the burgers) opening in Sheffield. They're also working on a Feminist Survival Guide, to answer questions including "Do you burn your bra?" and "What can I do about lads' mags?" If she could achieve one lasting change, what would it be? "A total overhaul of the way society sees women," she says.

She is exactly the type of feminist who Catherine Redfern and Kristin Aune are celebrating in Reclaiming the F Word: The New Feminist Movement. The book's title isn't supposed to suggest feminism ever went away – groups as disparate as Justice for Women, The Fawcett Society, Southall Black Sisters and Karma Nirvana have been working for women's rights for decades now. But when Redfern started feminist website The F Word, in 2001, she felt there was a general perception that young women weren't interested, and that the movement was therefore gasping its last. "People in the media kept saying that feminism was dead," says Redfern, "and deriding it year after year". As a young lecturer, Aune noticed the same problem in academia.she met plenty of young feminist students, "but a lot of older academic feminists didn't seem to believe it". The idea of the book, says Redfern, was to "try and present a snapshot of the movement, and bring it into the mainstream". The reader they had in mind, Aune continues, was "someone who's vaguely interested in gender issues, but hasn't had something that really makes the connections for them". Each chapter focuses on a different area of current feminist thought and action, including arguments around violence against women, equality in the home and workplace, and sexism in popular culture.

The book ends with the results of an extensive survey. Redfern and Aune aimed at feminist groups that was started in 2000. Initially they sent it to 50 organisations, but the long, complicated questionnaire was eventually passed around 80 to 100 groups. 1,265 newly committed, newly inspired feminist campaigners responded, and Aune says they could easily have tripled that number if necessary. Three-quarters of the respondents were under 35.

It's just one of many signs that we seem to be entering a new heyday for British feminism. Another is the sudden burst of British feminist publishing, after an extensive drought. Along with Redfern and Aune's book, the past 12 months has seen the publication of Ellie Levenson's The Noughtie Girl's Guide to Feminism, Nina Power's One Dimensional Woman, Natasha Walter's Living Dolls: The Return of Sexism, Sheila Rowbotham's Dreamers of a New Day, and Kat Banyard's The Equality Illusion: The Truth About Men and Women Today. There are more books in the pipeline – Caitlin Moran, the Times journalist, who won Columnist of the Year at the British Press Awards is apparently hard at work on a book about the future of feminism, and the young feminist writer, Laurie Penny, has her own take coming out soon. And published next month in the UK, after achieving bestseller status and causing quite a stir in the US, is Half the Sky,: Turning Oppression into Opportunity for Women Worldwide by husband and wife Pulitzer-prizewinning journalists Nicholas D Kristof and Sheryl WuDunn, which reports on the plight of women in the developing world.

Walter has been speaking at events around the country, and says the feedback has been phenomenal. Her talk at the Brighton Festival completely sold out, in quite a big venue: "I think there's a real hunger to talk about feminism". The mood is very different, she says, to 10 years ago, when she published The New Feminism, and was met with a bruising response from many female journalists. "People are ready to debate this seriously again."

Kat Banyard agrees. Earlier this year she set up social networking website, UK Feminista, where local grassroots groups can meet, debate and build strong, supportive ties. Banyard, who is in her late 20s, has been running successful annual feminist conferences for the past six years and has also decided to run a UK Feminista summer school, taking place next weekend, where activists will learn how to campaign more effectively. She has been stunned by the response. "In the first 24 hours 100 people registered," she says, "and three days on we had a couple of hundred. I've never seen anything like it. I'm used to spending six to nine months building up that kind of attendance at feminist events."

When I ask what explains this surge of interest, Banyard says that significant triggers arise almost every week. "Over the last few months, we've had the actor Danny Dyer inciting readers [of Zoo magazine] to cut their ex's face, we've had news of padded bras for seven-year-olds, we've had an absence of women on the election campaign trail, the announcement of anonymity for rape defendants. With headline after headline we're seeing a continuing need for feminism. And with each new incident, people are getting involved."

The movement is well-represented across the country. Aune says she was surprised by the huge amount of activity in Scotland, and Banyard points out that new groups include the Belfast Feminist Network, Newcastle Feminist Book Group, Fawcett Essex group, and Cardiff Feminist Network. This last group was set up by Hannah Austin earlier this year – within a week, she says, there were around 300 members.

Suswati Basu, a 22-year-old who is currently studying Mandarin at the School of Oriental and African Studies (SOAS) in London, embodies the movement's drive and excitement. She has been a feminist activist for four years now, in which time she has campaigned against student beauty pageants and been involved with the London Feminist Network's annual Reclaim the Night marches – large-scale protests against male violence, which started in the 1970s, died out in the 1990s, and were successfully revived in 2004. Basu has also taken part in protests with the activist group, Object, which many of the feminists I speak to describe as the most inspiring campaign around. Object has been challenging the sexual objectification of women since forming in 2003, and they scored their two biggest successes last year, securing changes in the laws surrounding lapdancing clubs and prostitution.

The young feminists who are spearheading this new activism clearly have enormous energy, ambition and idealism, and in many cases are doing brilliant work. But the question of where the movement goes next, of what its prime focus should be, remains to be answered.The current burst of feminist publishing is promising, but much of it repackages longstanding arguments. The Noughtie Girl's Guide to Feminism is, as its title suggests, a lighthearted look at the topic; Reclaiming the F Word is a useful book for its expected audience - women discovering feminism for the first time - but doesn't set out to present unexpected new arguments. Dreamers of a New Day is a fascinating look at the women who were fighting for social justice in the late 19th and early 20th century, but its context is historical. Nina Power's book, One Dimensional Woman, lays claim to new ground but, at 20,000 words, is an opening gambit in a bigger battle.

There's a need for new thinking and more publishing then - as well as more focus.If, as Corwin suggests, the aim of today's activists is to completely change society, then questions remain about where to channel their energy. Should the focus be on getting more women into parliament? Getting more women out of prostitution? Does having more women at the top help all the women further down the ladder? Should activists focus on the sex industry, equal pay, violence against women, international issues – and if individuals and groups choose to tackle all of these, how much change can they achieve? If inequality between men and women is structural, a web of discrimination in which the dearth of women in politics intersects with the portrayal of women in pornography, which intersects with the tendency for women to be paid less than men, the depiction of women as obsessed with shoes, the likelihood that female plaintiffs will be disbelieved in rape cases, the attempts to undermine women's abortion rights; if the situation of women in Britain has an impact on women in France, the US, Iraq, Afghanistan and the Democratic Republic of Congo, then which threads do we pull to make the most impact in bringing the whole web down?

"It feels as though there's so much interest," says Walter, "from so many different areas, that something positive has to happen, but whether it will, it's hard to know. "I'm heartened by the rise in activism," says Walter, "but the questions we'll all be asking ourselves over the next year are: how wide is this new wave? Will it touch people beyond the usual suspects? Will it galvanise energy more widely in the grassroots – bring in other classes, women of other backgrounds? And will it also touch women who have the power and influence to change things? I'm not saying that women aren't asking these questions. So it's not a criticism of what's going on, but it's the challenge. I feel that we're beginning to see more happening, but at the moment it's still quite focused in narrow areas. We need to see it spread".

Banyard is equally aware of the challenges. "At the moment, while feminist organising is growing and really exciting, it's quite disparate and unconnected," she says. UK Feminista is an attempt to address that issue. "For me, what's absolutely crucial," she continues, "is that we translate this excitement, this energy, into real gains for women's rights - because it's not an automatic translation. We need fundamental shifts in our culture, in our laws, in business practices. It's not a simple process. We're very much at the stage now of creating a mass base of people. What's crucial is that we then use that".

What's heartening is that feminism does seem to be reaching beyond the ivory towers of academe to a broad range of women. Redfern points out that there have recently been feminist articles in Elle and Company magazines, while Walter says she was surprised to see pieces debating the importance of feminism in The Sunday Times and The Daily Telegraph this year. Power says that, even just a year and a half ago, when she wrote One Dimensional Woman "the situation didn't seem remotely as optimistic, but so much has been happening, and there just seems to be a mainstream acceptance that feminism's still around, that it's not finished, it's not uncool, and it's not depressing. It suddenly has a contemporary sheen that makes it exciting, which wasn't really true in the 80s or 90s at all".

Shahida Choudhry, a 40-year-old mother, who lives in Birmingham and has worked in the domestic violence sector throughout her career, says that although a lot of her work "has been driven by feminism, it's only recently that I've started to frame it like that". In the past few years, she has been heavily involved with the Fawcett Society in Birmingham, and is also the founder of the locally based Women's Networking Hub, which brings grassroots women's organisations together with those who need their support. In January she held an event at a library in central Birmingham, "which I pulled together, on my own, in a couple of weeks". She was only expecting a handful of women "twenty at most, but three hundred turned up. It was mind blowing."

Choudry is also involved with the Million Women Rise marches – protests against violence against women – which have been taking place in London around International Women's Day for the past three years and are among the most successful of all the current feminist campaigns. An estimated 8,000 women turned out this year. "It was absolutely amazing," says Choudry, "the feeling of marching through the streets, shoulder to shoulder. It really shows that there are women who want to speak out".

UK Feminista summer school runs from 31 July to 1 August. For details, go to ukfeminista.org.uk

Hugo Radice on the Austerity Budget

BRITAIN’S AUSTERITY BUDGET: A CLASS ACT
Hugo Radice 7 July 2010
The June budget

Following the inconclusive outcome of the British general election on May 6th, the ‘centrist’ Liberal Democratic Party decided to turn sharply to the right by agreeing to join the Tories in a coalition government. In the run-up to the election, the Tories had argued strongly that Britain faced the prospect of a fiscal crisis unless the government’s deficit was brought down further and faster than the outgoing Labour government intended (see The Bullet no. 345).

The new government quickly cranked up the volume over the deficit, with fresh scare stories about the risk of contagion from the Greek sovereign debt crisis and the subsequent disarray across the Eurozone. Although Labour and the left at once warned of the danger that sharp cuts would risk a new recession, the coalition insisted on pursuing their austerity agenda – and none more so than the Lib Dem ministers, who before the election had sided firmly with Labour on the issue.

The Chancellor George Osborne announced the coalition’s emergency budget to the House of Commons on June 22nd. The key elements were:
Public sector borrowing to fall from £149b in 2010-11 to £37b in 2015-16.
Three-quarters of the reduction will come from spending cuts, and only a quarter from tax rises.
‘Unprotected’ areas of public spending – all bar health and aid – will face 25% cuts.
Government capital spending (investment) to fall by 60%.
VAT raised from 17.5% to 20% from January 2011.

It rapidly became clear what the impact of these cuts would mean:
Forecast job cuts by 2015-6 of 600,000 in the public sector, with 700,000 further in the private sector; to be offset by 2m expected new private sector jobs.
While the richest 10% will lose the biggest share of their income (2%), otherwise the burden will fall most heavily on the poorest, especially due to cuts in welfare.
Postponement of many projects for renewing schools, hospitals and transport infrastructure.

The response
Among politicians, the media and professional economists two camps immediately emerged.

On the one hand, supporters of the budget argue that the government had to announce rapid reductions in the deficit, in order to allay the concerns of the financial markets. By cutting government spending more quickly, they argue, resources of money, goods and labour will be freed up sooner to feed the expected recovery in the private sector. It will also ensure that interest rates remain low, which will stimulate borrowing by businesses. Furthermore, 77% of the projected fall in the deficit will come from spending cuts, and only 23% from tax rises; this is seen as an appropriate balance, since the spending cuts will be focused on waste and red tape, and any shift towards more tax rises would directly hit private sector spending.

The coalition’s critics disagree on all these points. The threat from the bond market has been greatly exaggerated to justify a deliberate attack on the public sector. Far from freeing resources for private sector growth, the cuts will reduce household incomes and spending, making the private sector even less likely to invest and take on new staff. A return to recession could also make the deficit even worse. What is more, the impact of the budget will fall most heavily on the poor, since higher tax allowances will not offset the effect of job losses and benefit cuts.

Key issues include the state of the bond markets; the effects of the cuts; the continued problems of the banking sector; the role of the property market; and the long-term impact on workers’ living standards.

The bond market bogeymen
Despite the continuing jitters in financial markets, the Eurozone sovereign debt crisis has abated somewhat. The UK’s own sovereign debt is well outside the danger zone: there has been no difficulty in finding ready buyers for newly-issued debt, and the maturity profile – that is, the average period before the various debt issues must be repaid – remains far better than those of other countries. In addition, the extent of foreign ownership of UK government bonds (around 30%) is much lower than for other large economies (e.g. 50% for the USA). But we have to look in more detail at the global picture.

First, although it may seem paradoxical, quite a few City economists (and the IMF and the OECD) now agree with the budget’s critics, arguing that the impact of simultaneous public sector cuts across Europe and elsewhere threatens to bring the global economic recovery to a halt.[1] This may well account for the worldwide slump in stock markets after the G8/G20 summit at the end of June in Toronto: the assembled leaders gave no indication of having an agreed approach, with the Obama administration apparently arguing that European deficit-cutting was too soon and too deep.

Second, too little attention is given to the global savings glut. Big non-financial businesses are awash with cash, as are the sovereign wealth funds of oil-producer states and the high-growth Asian governments, as well as the global super-rich. In the current conditions of chronic uncertainty about growth and government policies, all these types of investor are looking for safe havens, and after gold, government bonds remain the main ‘safe haven’.

The double-dip risk
The critics also argue that rapid cuts in government spending will directly lead to increases in unemployment through the loss of public sector jobs. This will increase the government deficit as taxes fall and benefit payments rise; it will also hit the recovery in consumer spending, both through lower total household income and through a resulting fall in consumer confidence. Because the private sector will be hit not only by the fall in household spending, but also by the loss of sales to the public sector, they will postpone investment plans and either cut staff numbers, or at best delay hiring or re-hiring.

The coalition argues that quicker and deeper cuts in the government’s borrowing requirement will free up resources for private sector investment, and keep the cost of borrowing low. But recent surveys of business confidence in many countries show that businesses are unwilling to start investing again because of the huge uncertainties they face in terms of demand and costs. In any case, the all-important small & medium enterprises (SMEs), which are supposed to be the backbone of the recovery, are currently paying interest rates of around 10% on bank borrowing, despite the Bank of England holding its own 0.5% rate. As long as commercial banks are under pressure to build up their reserves against future losses, they are unlikely to reduce the rates they charge to the private sector.

However, it is still possible that the double-dip will be avoided. There are two reasons for this. First, despite the very slow pace of recovery, especially in terms of employment and especially in the US, UK and the Eurozone fringes, growth of 4-5% is currently forecast for 2010 in the world economy as a whole. China, India and other ‘emerging’ economies are forecast to account for 70% of demand growth this year, and are now sufficiently large to have a real impact on demand for goods and services from Europe and North America. This may be sufficient to cancel out the depressing effects of public spending cuts, especially since the cuts are going to take some time to implement.

Second, while Keynesian and other critics argue that business confidence is vulnerable to fears of recession, they do not recognise that it is also boosted by any signs of continued recovery. Big businesses, especially transnationals whose production is diversified by country and product, have the cash reserves to respond quickly to market growth wherever it occurs.

The banking sector
The Eurozone sovereign debt crisis has brought to light the continuing fragility of many banks, especially across Europe (including the UK) and the USA. This is mainly because so many banks are holders are large amounts of government debt. The short-term response of bank regulators has been to introduce ‘stress testing’ of banks, which means examining their balance sheets to see the likely impact of events such as large-scale public debt defaults.

The longer-term response is to develop agreed rules for banking regulation across the world. This is taking much longer than originally hoped, for example at the 2008 London G20 meeting. Partly this is because of the resistance of the biggest (and therefore most powerful) banks to stricter regulation of their activities, and partly it’s because of the technical difficulties of reconciling the very different systems of regulation in different countries – even within the Eurozone countries, where the European Central Bank has to deal with 16 different national regulators.

But the real problem concerns much more fundamental issues of what we want banks to do. Most of the political centre and left held the banks responsible for the crisis right from its origins in 2007. Wanting to avoid any recurrence of the crisis, they support renewed segregation of ‘bread and butter’ banking based on deposits from and loans to households and businesses, from the ‘speculative’ activities of investment banking, referring notably to the 1933 Glass-Steagall Act in the US, which was repealed by the Clinton administration in 1999. There is considerable support for this move among international organisations and even bankers, but this is really only an issue for the ‘Anglo-Saxon’ economies, and for a small number of European and Japanese banks that have followed the Wall Street / City of London model. Interestingly it is strongly opposed by the government of Canada, whose large but conservative banks avoiding getting involved in the more risky activities that brought down Lehman Brothers or Royal Bank of Scotland.

While these issues are still so far from resolution, banks everywhere face great uncertainty. Many continue to carry a lot of potentially ‘toxic’ lending in their balance sheets. They are urged on the one hand to build up their reserves of capital, but on the other hand to expand their lending to help the recovery, and to pay special levies to governments to provide funds which can be deployed to avoid future crises.

Property and profits
The continued uncertainty about both the global economic recovery, and about the reform of financial sector regulation, are sufficient reason for the volatility of global bond, stock and currency markets. They also explain the tensions between the great powers, old and new, over international coordination of responses to the crisis. In these circumstances, the most likely outcome remains a drift towards ‘business as usual’.

A major part of ‘business as usual’ in the case of Britain (and the US, Ireland and Spain) was the boom in residential property prices in the 15 years after the end of the recession of the early 1990s. By the time the crash came, house prices in Britain were way out of line with household incomes, compared with all historical experience; while the method of financing the boom (by lenders raising money through the sale of short-dated securities) was a major factor in the 2007 credit freeze that initiated the global crisis.

A little-noticed feature of the budget is that it assumes that the recovery of house prices back towards pre-crash levels will continue. This is clear from the assumption that revenues from the stamp duty payable on house transactions will over four years recover to the pre-crash level. Yet it is hard to see how this will happen, unless the economic forces behind the boom are restored. In particular, households will have to revert to debt-fuelled property speculation, and the money markets will have to restore the flow of funds into household mortgages.

A declaration of class war
First of all, with regard to the effects of spending cuts, it is hard to see how the coalition can implement their pledge to maintain ‘front line services’, since their existing commitment to level spending in some areas (particularly health) apparently means that other government departments will have to cut their spending by up to 25% (or – according to the latest leak – anything up to 40%) over the next five years. In addition, much of the supposedly dispensable ‘back room’ work is in fact absolutely necessary for the support of the front line services.

The critics argue also that the tax rises are inequitable, despite the retention of the 50% tax rate for incomes over £150,000; the VAT rise in particular is not progressive, except as a result of the fact that poor households spend a higher share of their income on zero-rated foodstuffs. Given that the impact of spending cuts, especially in benefits, will fall more heavily on poor households, the overall impact of the budget on households will favour the rich at the expense of the poor.

For Keynesian liberals and the centre-left, this makes no sense at all, because the primary need is to expand effective demand for goods and services (and thus expand employment). Poorer households are much more likely to spend their incomes, it is argued, while richer households will be concerned to reduce their debts to manageable levels.

Of course, as I have already argued, businesses will only invest and grow if they anticipate growth in demand for the goods and services they produce. But the Keynesians ignore the other key objective for employers: to reduce costs, and especially labour costs, including not only wages but also the deferred wages that provide our pensions. In the US, the average earnings of individual workers peaked in the 1970s; in Germany there has been no wage growth in the last decade. This places strong pressure on businesses in other countries to cut labour costs in order to remain competitive.

The emergency budget includes not only the prospect of pay freezes in the public sector, but also an assault on pension costs, through raising the retirement age, raising our share of pension contributions, and tying pension levels to contribution levels rather than salaries. The message is clear: regardless of economic growth, lifetime earnings for working people are set to fall in the long term, after several generations in which rising living standards were a central feature of our acceptance of the capitalist order.

Just how important this issue is has been shown by two news items in the days since the budget. First, British Airways management’s proposed deal to settle their dispute with cabin crew includes the introduction of a two-tier workforce, with new recruits on worse pay and conditions. Second, selected Tories and their business supporters have begun to talk of the need to restrict the right to strike even further than the Thatcher legislation - none of which, incidentally, was repealed by New Labour.

We are in for a long, hard struggle – that is the clear message from this budget.

Hugo Radice
h.k.radice@leeds.ac.uk
http://www.polis.leeds.ac.uk/about/staff/radice/

[to appear in The Bullet, http://www.socialistproject.ca/bullet/]



[1] See Martin Wolf, ‘A demand fall casts doubt on early austerity’, Financial Times 7 July 2010.

Stiglitz on the Budget: Wrong!

Independent on Sunday, 27th June 2010
Osborne's first Budget? It's wrong, wrong, wrong!
Joseph Stiglitz, the Nobel prizewinner who predicted the global crisis, delivers his verdict on the Chancellor's first Budget and tells Paul Vallely it will take the UK deeper into recession and hit millions – the poorest – badly.

George Osborne will probably not be very bothered that there is a man who thinks he got last week's emergency Budget almost entirely wrong. But he should be. Because that man is a former chief economist at the World Bank who won the Nobel Prize for Economics for his work on why markets do not produce the outcomes which, in theory, they ought to.

Professor Joseph Stiglitz, who has been described as the biggest brain in economics, is distinctly unimpressed by George Osborne's strategy. This, he predicts, will make Britain's recovery from recession longer, slower and harder than it needs to be. The rise in VAT could even tip us into a double-dip recession.

Stiglitz, who was once Bill Clinton's senior economic adviser, is now professor of economics and finance at Columbia Business School. He was in the UK this week at the University of Manchester, where he chairs the Brooks World Poverty Institute, but he lifted his head from the detail of international development to scrutinise the economic strategy of the Conservative Chancellor whose Liberal Democrat partners recently reversed their judgement that massive public spending cuts now would endanger the economy and joined in the Tory slash-and-burn strategy. They were deeply wrong to do so, he believes.

It would be a mistake to ignore Stiglitz on this. He has a track record of getting his predictions right. He was one of the few economists who predicted the global financial meltdown long before it occurred.

"What happened was very much in accord with what I expected," he tells me when we meet for a coffee outside the Blackwell bookshop in the centre of the university. "The data was pretty clear about that." And the scale of the crash? "That wasn't a surprise," he adds, in a matter-of-fact manner. "The bigger the bubble, the bigger the burst.

"The thing most economists did not fully grasp was the extent to which the banks engaged in murky risk-taking activities. They were taking a risk with our money, their shareholders' money, the bond-holders' money," he says. Banks were demanding up to 40 per cent of the corporate profits, saying their innovative financing was adding value. But "all this talk about innovation was a sham" because it did not relate to any real increase in the economy's productivity, he says.

"There was a prima facie case of something screwy going on [with all the] perverse incentives that would lead them to take excessive risk. But there was no way anyone could know or believe that the banks were [conducting themselves] at that level of stupidity. I predicted that there was going to be a collapse because of the information asymmetry problems that were being created." His Nobel prize was given for exactly that – showing how markets fail because different people in them hold different levels of information.

Yet there is no hint of I-told-you-so about Stiglitz's tone as he asks the waiter for coffee. He orders decaffeinated, but suggests the British economy needs the opposite: a stiff stimulant rather than the "fiscal consolidation" which is George Osborne's economic euphemism for cuts.

Fiscal stimulus is out of fashion now. World leaders embarked on that strategy – injecting money to re-energise the economy – after the banking crash three years ago. It was widely perceived not to have worked because the money governments pumped into the banks was not passed on to ailing businesses or individuals in trouble with their mortgages.

"The problem was that, in the US, the stimulus wasn't big enough," he says. "Too much of it was in tax cuts. And when they gave money to the banks they gave it to the wrong banks and, as a result, credit has not been restored – we can expect a couple of million or more homes to be repossessed this year than last year – and the economy has not been restarted." Instead of producing a consensus that the government should have done more, it has created disillusion that the government can do anything, Stiglitz says.

The result is that, following the attacks by the financial markets on Greece and then Spain, everybody is now in a mood of retrenchment. "It's not just pre-Keynesian, it's Hooverite," he says. By which he means governments are not just refusing to stimulate, they are making cuts, as Herbert Hoover did in the US in 1929 – when he turned the Wall Street Crash into the Great Depression. "Hoover had this idea that, whenever you go into recession, deficits grow, so he decided to go for cuts – which is what the foolish financial markets that got us into this trouble in the first place now want."

It has become the new received wisdom throughout Europe. But it is the classic error made by those who confuse a household's economics with those of a national economy.

"If you have a household that can't pay its debts, you tell it to cut back on spending to free up the cash to pay the debts. But in a national economy, if you cut back on your spending, then economic activity goes down, nobody invests, the amount of tax you take goes down, the amount you pay out in unemployment benefits goes up – and you don't have enough money to pay your debts.

"The old story is still true: you cut expenditures and the economy goes down. We have lots of experiments which show this, thanks to Herbert Hoover and the IMF," he adds. The IMF imposed that mistaken policy in Korea, Thailand, Indonesia, Argentina and hosts of other developing countries in the 1980s and 1990s. "So we know what will happen: economies will get weaker, investment will get stymied and it's a downward vicious spiral. How far down we don't know – it could be a Japanese malaise. Japan did an experiment just like this in 1997; just as it was recovering, it raised VAT and went into another recession."

Then why have we not learned from all that? Because politicians like George Osborne are driven by ideology; the national deficit is an excuse to shrink the state because that is what he wanted anyway. Because the financial market only cares about one thing – getting repaid. And because other European governments are panicking because of the market's wild attack on Greece and Spain, and they don't want to be next.

"But cutbacks in Germany, Britain and France will mean all of Europe will suffer. The cuts will all feed back negatively. And if everyone follows this policy, their budget deficits will get worse, so they will have to make more cuts and raise taxes more. It's a vicious downward spiral. We're now looking at a long, hard, slow recovery with the possibility of a double dip if everybody cuts back at the same time. The best scenario is long and hard ... and the worst is much worse. If any one of these countries is forced into default, the banking system is so highly leveraged that it could cause real problems. This is really risky, really scary."

So what should we be doing? "The lesson is not that you cut back spending, but that you redirect it. You cut out the war in Afghanistan. You cut a couple of hundred billion dollars of wasteful military expenditure. You cut out oil subsidies. There's a long list of things we can cut. But you increase spending in other areas, such as research and development, infrastructure, education" – areas where government can get a good return on the investment of public money. "I haven't done the calculation for Britain, but, for the US, all you need is a return on government investment of 5 to 6 per cent and the long-term deficit debt is lowered."

Taxes also need to be restructured. Osborne has increased capital gains tax for high earners from 18 to 28 per cent. "There's absolutely no reason why you couldn't tax speculative gains [from rising house or land prices] by 40 per cent. There's no social return on it and land is going to be there whether people have speculated or not. But you lower the tax on investment in things like R&D."

Stiglitz has one more practical solution to offer. Governments should set up their own banks to restart lending to businesses and save struggling homeowners from repossession. "If the banks aren't lending, let's create a new lending facility to do that job," he says. "In the US, we gave $700bn to the banks; if we had used a fraction of that to create a new bank, we could have financed all the lending that was needed."

Indeed, it could be done for far less. "Take $100bn, lever that at 10 to 1 [by attracting funds from the private sector] and that's a trillion-dollar new lending capacity – more than the real economy needs."

Such a move would help ordinary people more than all Osborne's rhetoric about being tough but fair. Stiglitz is sceptical, too, about the moral underpinning of a Budget which claims that "we are all in this together", but then hits the poorest hardest.

Analysis by the Institute for Fiscal Studies has suggested that the Chancellor's Budget will cost the poor 2.5 per cent of their income, while the rich will lose just 1 per cent. "I've not made an independent study on that point, but cuts in public services will have a disproportionate effect on the poor," Stiglitz says. Osborne's Budget "may be well-intentioned, but it takes an enormous amount of work to make sure that a package of public spending cuts of that magnitude doesn't hit the poor disproportionately".

His big fear is that overseas aid, which has been protected in this first round of cuts, will not escape a second. "Developing countries have redirected themselves towards Asia, and China in particular, in recent years, so growth in Africa will be more robust than one might have expected, given the severity of the downturn," he says.

Even so, aid remains vital to poor countries. "If aid is cut back, growth will be badly affected," he says. "China is providing aid, but its aid is all in infrastructure, whereas aid from the US and Europe is mainly in education and health – areas in which ordinary people will suffer most if there are cuts."

Joseph Stiglitz has come full circle. What the world needs now – developing and developed – is not retrenchment but greater economic stimulus. It is not a message many are in the mood to hear. But they didn't listen to him last time, either. And he turned out to be right, and they were wrong – and at what a cost to us all.

Compass Conference 2010: A New Hope

A galaxy but no stars Jun 21st, 2010
WILLIAM BROWN reports from the Compass annual conference where the Labour left considered the post-election political landscape
(from ILP)

In a conference hall not so far away, the labour left gathered on June 12th for the Compass annual get together. Launching this year’s event, optimistically titled ‘A New Hope’, Compass chair Neal Lawson set off on a slightly curious note declaring ‘we’re not rebel fighters, we’re building a death star’. If that was slightly off-key, much of the rest of the conference followed, exposing a Labour left that is only slowly getting to grips with the new politics of opposition.
Of course, Compass by its nature is a very broad organisation and its conferences are interesting partly because of this, a large (1,000 people), comradely forum for the exchange of quite divergent views. In fact, over time, two ideas seemed to form a core of opinion at the conference: that proportional representation is essential for the future of left politics and that Labour should be a ‘pluralist, not tribalist’ party.

The first of these is a long standing one on the left and has been central to the efforts of those – from Blair and Ashdown leftwards – to fashion a realignment of politics around the centre left. Current government plans for a referendum on the AV system, with Tories campaigning against, leave this aim tantalisingly out of reach for those who see it as essential.

The second pillar – for a Labour politics that is not tribal but pluralist – is becoming a frequent refrain in Compass, among Labour leadership contenders and among the wider commentariat.

Pluralism
But there are very different versions of this call for pluralism. At the level of party politics, one explanation is that it is a reaction to the perceived failure of Labour to fashion an anti-Tory ‘rainbow coalition’ in the wake of the general election. The ‘tribal’ interventions of David Blunkett and John Reid, both of whom came in for considerable stick over the course of the conference, were seen by many to represent an ‘old politics’ that we need to move away from in the new coalition-dominated future.

There were also those present on the Labour left who clearly feel some empathy for the small parties that are seen as more left wing than Labour – such as the Greens’ Caroline Lucas who, despite having defeated a Labour candidate in the general election, was given an enthusiastic reception by this clearly non-tribalist crowd.

However, it was Lucas who presented the least compelling case for pluralism and highlighted the limited vision of this variant of political pluralism. Teaching the assembled grannies to suck eggs, she pronounced on how remaining in the Labour Party meant many people had to make difficult compromises to accommodate the distance between their own beliefs and the Labour’s policy. No shit. Her solution, for a flowering of smaller parties (like her own in fact!), in which members can feel comfortable in their purity leads down a strange path, however. The left knows something about this, having taken the purity strategy to absurd People’s Front of Judea lengths in the past. But it also ignores the question of what then? What happens after this party pluralism has blossomed and PR has delivered a parliamentary mosaic of principled representatives? Presumably there are real issues of principle that necessitated the creation of separate parties in the first place? Don’t they then have to engage in the very same dirty compromises that she was lamenting a few moments earlier?

Some even asked whether you would want to see a majority Labour government again, with the clear implication that if your answer was ‘yes’ then you were obviously still wedded to the ‘old politics’. But what is so inherently progressive about having to make deals with the David Laws of this world? or in giving concessions to Alex Salmond’s narrow, particularistic, nationalist demands?

Rather more convincing and carrying greater potential, is the idea of a pluralist politics that connects the Labour Party and parliamentary politics generally in a more open and constructive way with non-party groups and campaigns. A party that is active on a local level, engaged and engaging, and at the forefront of campaigns around opposition to cuts would indeed help reinvigorate Labour’s internal politics. Such ideas are clearly having some purchase on leadership candidates debates with both Milibands arguing for a revitalised, active campaigning party. Even here there may be dangers however, and the Blairite dream of a dissolution of party memberships into looser networks of supporters, clearly still has some adherents. Internal party democracy still ought to matter, and for that to mean anything then membership has to become again something real.

A progressive alliance?
On other issues the conference veered wildly in its reading of the contemporary political scene. Throughout there was a persistent sense of denial about the formation of the ConDem coalition which clearly shocked some speakers quite profoundly. Compass’ political strategy, such as it is, has centred on the formation of ‘the broad progressive coalition’ and one feels that the group still has to come to terms with the fact that this notion has been blown out of the water by the Liberals’ post-election choice. The continued adherence to PR and pluralism does look a bit less convincing in world in which a Lab-Lib coalition is no longer the central element.

Even so, Compass also continue to reject the Blairite notion that the country is essentially conservative with a small c. Their, and much of the left’s, argument against New Labour centred on this claim. Where New Labour used the ‘conservative’ nature of public opinion as a reason to move rightwards, those further to the left argued that this reading of the public’s values was mistaken. A different option that neither takes, is that New Labour was right on its assessment but wrong in not seeking ways – long term, hard and slow – of shifting that opinion. Lawson even commented that over thirteen years in government Labour did nothing to build a progressive movement. The left, one suspects on this evidence, would now rather take the easier option of thinking that the country is with us and build a political strategy on that assessment.

Indeed, several speakers cited the combined vote for Labour and Liberals as evidence of a ‘progressive majority’ in the country. Yet much in Labour and the Liberal manifestos was anything but progressive: both argued for substantial and damaging cuts, neither gave a convincing case for the public sector and against the private, neither presented a convincing critique of the financial sector, both indulged in anti-immigration gutter politics to pander to the ‘bigoted women’ (and men) of the country. Most amazing was New Statesman political editor, Mehdi Hassan, who cited the polling that 1 in 4 LibDems were unhappy with the coalition as evidence of a progressive opportunity, seemingly ignoring that that means 3 in 4 are happy with rampant expenditure cuts, the dismembering the public sector and the creation of a two-tier schools system.

In a warning that ought to give Compass and all on the left pause for thought, John Harris argued that ‘if your argument is also the one you are most comfortable with, it is probably wrong’. Maybe some in Compass fall prey to reading from the political landscape what they are comfortable seeing – a country that is ‘with us’ and a political strategy that seamlessly mobilises a coalition to bring the progressive majority into power through PR.

Coalitions and cuts
Opinions also differed markedly on the prospects for the ConDem coalition and what the appropriate response to the cuts should be. In a seminar on the cuts there was much debate over the appropriate balance between raised taxes and reduced expenditure. Only one speaker made a serious case for limiting cuts, arguing that the widespread austerity policies now being enacted in Europe would trigger a renewed recession. Some contributions from the floor were predictably simple – ‘we say no to cuts!’ – but in the main Polly Toynbee, who chaired the session brilliantly, did not allow simplistic answers, or questions, to go unchallenged.
A more serious omission was of any quid pro quo that the left should ask for in return for reduced public expenditure. If cuts are to be something other than a process of making the poorest pay for the sins of the financial sector, then they must be accompanied by some attempt to challenge the power of financial markets over the longer term. Several speakers cited ‘market reactions’ as a key reason why cuts were necessary, yet none signalled any discomfort with that situation. The irony that the very credit ratings agencies who acted so irresponsibly in the build up to the crisis should now be arbiters of what the government should or shouldn’t do did not seem to register with the speakers. Next to that, all the talk of a ‘Canadian-style’ consultation over the cuts, even democratic politics, comes to nought if markets have the final say.

How soon these questions bite will in part depend on the fate of the governing coalition. Here too, opinions differed. The coalition was, Lawson said, ‘the thing none of us expected’, a claim that betrays a certain lack of foresight if nothing else. Yet both he and John Harris were, rightly in my view, alert to the changed terrain that the coalition may bring into being, an ‘audacious grab’ for the centre-right ground that shared considerable continuities with Blairite policies and which could leave the left looking very isolated. Others, notably Mehdi Hassan of the New Statesman, were more hopeful of a quick end to the coalition, calling it ‘a strategic disaster for the Lib Dems’.

Leadership election
How well Labour responds to the coalition will depend on a revitalisation of the Party’s politics and so far the leadership campaign has not revealed any clear direction either. At a hastily arranged hustings, a packed hall listened to the assorted Eds, Milibands, Burnham and Abbott set out their stalls and answer the predictable questions on PR, cuts and schools. While the greatest cheer during the opening statements came for Diane Abbot, a walking embodiment of tokenism in this election, enthusiasm for her waned as the debate proceeded, possibly reflecting the vacuity of Abbott’s politics. More encouragingly, both Milibands and Andy Burnham emphasised revitalisation of the party and its membership as key aims though as yet none as spelled out a convincing programme of democratic reform of Labour’s internal structure.
Showing some in Compass what might have been, John Cruddas rounded off proceedings with a forceful and at times powerful speech. His attack on the ‘sour, shrill, hopeless politics’ of attacking the poor and immigrants was a direct and timely counter to those arguing that Labour lost the election by not being tougher on immigration. Cruddas’ alternatives, of a thorough ‘1987-like’ policy review, a revitalisation of Labour’s values and culture and a politics based on progressive English nationalism, are clearly based on his energetic campaign against the BNP and his view that Labour has fallen into a ‘moral and intellectual coma’. Whatever the shortcomings of his politics, Cruddas showed a passion and vision that is lacking from much of the race so far and his absence from the contest clearly disappointed some in Compass.
However, Lawson’s recognition that ‘the time perhaps is just not right’ for his kind of politics was an appropriate acknowledgement of where Labour and the left currently is. Looking rather more like a rebel band that has just taken a thrashing at the hands of imperial stormtroopers, the Compass conference was nevertheless an energetic and welcome moment to reflect on the options facing the left.

‘A New Hope is Forged’, a report of the Compass conference on its own website, is here.
For news of the Labour leadership campaign and information about the candidates, go here.

Erik Olin Wright is a grand old figure in radical sociology - anyone studying class in then 1970 or 1980s should be familiar with 'Class, Crisis and the State' and there's been a host of work on what class means since then. For several years one of his projects has been around 'Real Utopias' and his latest book is called Envisioning Real Utopias.

The excellent blog project New Left Project (please visit frequently) carries an interview with Wright

Edward Lucas: Why do you think there is a need for visions of social arrangement very different from those that we have now? Why is there a specific need for ‘real utopian’ visions?

EOW: There are really two somewhat questions here: why do we need to look for fundamental alternatives to existing social institutions, and why should these alternatives be framed as “real utopian” visions.

First, the issue of the search for alternatives: We live in a world characterized by deeply troubling, if familiar, contrasts: poverty in the midst of plenty; enhanced opportunities for some people to live creative, flourishing lives alongside social exclusion and thwarted human potential; new technologies to cure disease, enhance health and prolong life along with untreated, devastating illness. There are, of course, many possible explanations for these facts. Some people believe that poverty in the midst of plenty constitutes simply a sad fact of life: “the poor will always be with us.” Defenders of capitalism argue that this is a temporary state of affairs which further economic development will eradicate: capitalism, if given enough time, especially if it is unfettered from the harmful effects of state regulations, will eradicate poverty. Many social conservatives insist that suffering and unfulfilling lives are simply the fault of the individuals whose lives go badly: contemporary capitalism generates an abundance of opportunities, but some people squander their lives because they are too lazy or irresponsible or impulsive to take advantage of them. If you accept any of these diagnoses, then there would not be much point in elaborating visions of social arrangements very different from those we have now. But if you believe, as I do, that there is very strong social scientific evidence that these morally salient forms of inequality and deprivation are mainly consequences of fundamental properties of the socioeconomic system, then it is imperative to understand alternatives to the existing world which would mitigate these harms.

But why should the search for alternatives be cast as envisioning “real utopias”? The idea of this apparent oxymoron is to combine a commitment to our deepest emancipatory values and aspirations with a serious attention to the problem of how institutions really work. The “real” in the couplet forces us to continually worry about the problem of unintended consequences and hazards of social engineering; the “utopia” keeps the moral purposes of social transformation and social justice at the forefront. In the absence of a theory of fundamental alternatives, struggles against the harms of existing institutions will generally be limited to those changes which are immediately accessible – reforms of institutions which might in fact be desirable in and of themselves, but which don’t necessarily constitute steps towards the longer term goal of human emancipation. A theory of fundamental alternatives enables us to ask two questions of any proposed transformation of existing institutions – first, does this improve the lives of people now, and second, does it move us in the right direction along a trajectory towards a more profoundly humane and just society.

EL: You present the ideas and aims discussed in your book as socialist. However, your conception of socialism is novel, focusing on ‘social power’, rather than the abolition of private ownership of the means of production. Why do you think socialism needs to be re-conceived in this way? Is it really necessary to call the conception of emancipatory change that emerges ‘socialist’?

EOW: There is, of course, always a variety of words that can be used to identify any underlying concept. While I do think it is appropriate to deploy the word “socialism” for the theoretical and political purposes of my analysis, this isn’t “necessary” in the strong sense of being logically entailed by the arguments themselves. Indeed, some people have argued with me that the word “socialism” has become so contaminated by its association with heavy-handed state control – or even worse, in the United States ideological context, authoritarian statism – that I should abandon the word altogether. Words do have histories, and sometimes that history can destroy the usefulness of otherwise attractive terms.

In spite of this, I feel that the word socialist can be effectively retrieved for a progressive, democratic egalitarian political agenda. There are two issues in play here. First, while in the United States and perhaps some parts of Europe, the word “socialist” has lost traction in popular social movements, in much of the world it remains the broad umbrella term for anti-capitalism in the interests of ordinary people. I hope the audience for Envisioning Real Utopias is left intellectuals throughout the world, not just in the richest countries, and in this broader context socialism remains a positive symbolic anchor. Above all it signals not simply a complaint about specific features of existing institutions, but a criticism of capitalism as such. Second, the conceptualization of a “social” socialism is fully congruent with the normative ideals that have animated many socialists throughout the history of socialism. The real bottom line for most socialists is not really the abolition of private property in the means of production as such. That was always instrumental to deeper moral commitments. The real normative commitments were for a radically democratic and egalitarian social order. I could, therefore, call the political project underlying my project on real utopias, democratic egalitarianism (or perhaps, to give it more edge: radical democratic egalitarianism), and sometimes in fact I do use this expression as a way of identifying the normative foundations and conception of social justice. But because I argue throughout the book that realizing these values requires opposing and transforming capitalism, “socialism” remains the best term available for signaling this transformative agenda.Perhaps it would be useful at this point to briefly pause from directly answering the questions and explain a little what I mean by “democratic egalitarianism” and how this is connected to the idea of socialism as social empowerment.

First, equality: Equality is a complicated problem, and there isn’t really a strong consensus among socialists as to precisely what this value means. A great deal of very productive and interesting philosophical debate has occurred over the past quarter century or so on this issue. Here is how I define the egalitarian ideal in the book: In a socially just society, all people would have broadly equal access to the necessary material and social means to live flourishing lives. This conception is a variety of the “equality of opportunity” conceptions of equality. I prefer “equal access” to “equal opportunity” because the equal opportunity terminology is so strongly associated with what is sometimes called “starting gate” equality, whereas equal access emphasizes more the life-long problem of having access to the conditions to live a flourishing life.
Second, democracy: The core value underlying democracy is that people should, to the greatest extent possible, be able to control the conditions and decisions which affect their lives, both as separate persons and as members of broader communities. We can call this the value of self-determination. When we apply the value of self-determination to the choices and actions of individuals that affect their lives as separate persons we usually call this “liberty” or “freedom”. When we apply the value of self-determination to those contexts in which our lives are bound together through interconnection and interdependency, we call this “Democracy”. Democracy and individual freedom are therefore rooted in the same value: people should be able to control the conditions and decisions which affect their lives to the greatest extent possible. (Apparent conflicts between democracy and liberty occur not because of an underlying conflict in fundamental values, but because of the inherently difficult practical problem of creating institutions to realize this value.) In a fully realized democracy all people have broadly equal access to the necessary means to participate meaningfully in the exercise of political power over those collective decisions which affect their lives as members of a broader community.

This definition has two critical elements:
• The first is an egalitarian principle – all people have equal access to participate in the exercise of political power. A shallow democracy is one in which people have very unequal access to the means of effective participation; a deep democracy is one which approaches equal access.
• The second element concerns scope of decisions that is subsumed under the idea of democracy: a narrow democracy is one in which only a limited range of decisions are subjected to democratic decisionmaking; a broad democracy is one which democratic decisionmaking extends to all matters of collective interest. As I have specified it here, democracy should cover all decisions which affect the lives of people as members of a community. The word “community” here refers to all social contexts of social interaction and interdependence. A family is a community, a factory is a community, a city is a community, and so is a nation. Increasingly, I think, we should think of the world as a community. We can meaningfully talk about democratizing the family just as we can talk about democratizing a factory or the state. What democracy entails, then, is that all of the decisions which affect people’s lives as members of these different kinds of community should be under the collective control of the members of these communities.

The full realization of this principle would be, of course, an extremely complex matter, both because different people have such different stakes in the outcomes of any given decision within a community and because the interdependence of communities means that there are generally ramifications of the decisions made within one community on people in other communities. In practice, therefore, it is really not possible to fully realize the ideal of self-determination: people will always confront conditions not of their choosing and will be affected by decisions not of their making.

Nevertheless, we can still judge alternative institutional arrangements by how much they facilitate or impede the ideals of democracy as collective self-determination. Capitalism, in these terms, inherently obstructs fullest realization of democracy. By definition, “private” ownership of means of production means that significant domains of decisions that have broad collective effects are simply removed from collective decision-making. While the boundaries between the aspects of property rights that are considered private and the aspects that are subjected to public control is periodically contested, in capitalist society the presumption is that decisions over property are private matters and only in special circumstances can public bodies legitimately encroach on them. The private decisions of owners of capitalist firms often have massive collective consequences both for the workers inside of the firm and for people not directly employed in the firm, and thus the exclusion of such decisions from public deliberation and control reduces democracy. A society in which there are meaningful forms of workers democratic control within firms and external democratic public control over firms is a more democratic society than one which lacks these institutional arrangements.

Of course, there may be good reasons for the exclusion of non-owners from such decisions, either on the grounds of economic efficiency or on the grounds that people have the right to dispose of “their” property as they see fit even if this has large consequences for others. Democracy, after all, is not the only value we have, and it could be the case that in some circumstances other values, such as efficiency, might be sufficiently important to justify a reduction in self-determination. These considerations, however, do not change the fact that capitalist property rights reduce democracy.

EL: The advance of democracy, therefore, requires transcending capitalism. But how? And what does this really mean?

EOW: This is where my conception of socialism as social empowerment enters the analysis. “Social power” is power rooted in the capacity of people for voluntary association in pursuit of collective goals – what sociologists call “collective action”. Social power is contrasted two other more familiar forms of power – state power and economic power. You can think of these three forms of power as different ways of getting people to do things: bribing them, forcing them, or persuading them.

In the ordinary use of these terms, “democracy” is the label we use for the subordination of state power to social power: In a democratic state, considerable power is exercised by the state, but the purposes to which it is used are, supposedly, dictated by “the people”, which in practice means through the various ways in which people become organized associationally to influence the exercise of state power, especially through political parties, social movements, and labor unions. One of the pivotal mechanisms for this translation of social power into effective subordination of state power is elections. This is equivalent to saying state power is subordinated to social power. In an authoritarian state, on the other hand, social power is subordinated to state power. “Socialism”, then, is the word for the subordination of economic power to social power.

All economic systems involve all three forms of power. While we can construct three ideal type “pure” economic systems connected to the three forms of power – capitalism is based on the dominance of economic power, statism on the dominance of state power, and socialism on the dominance of social power – all actual economic systems are hybrids that combine in different configurations all three forms of power. The term “capitalism”, therefore, is a shorthand for “an economic system within which economic power is the dominant form of power and limits the scope and operation of state power and social power.” In this conceptual framework, transcending capitalism in the direction of socialism means increasing the weight of social power within the hybrid configuration along a variety of different “pathways of social empowerment”. The institutional proposals for “real utopias” are all situated within these multiple pathways of social empowerment.

EL: You discuss a range of different real utopian proposals for political and economic transformation. Can you describe what you see as the most important of these?

EOW: I hesitate to anoint any specific proposal as “most important” since the actual importance of a proposal depends on historical context, both in the sense of the political conditions which make different proposals more or less achievable, and in the sense of the existing institutional and social structural conditions which make given proposals more or less viable. So, instead of describing the proposals that I think are the most important, what I will do is briefly describe four or five proposals that I think reflect the diversity of institutional designs for moving along the pathways of social empowerment.
(1) Participatory Budgets. Participatory budgeting is a redesign of municipal government that was first instituted in the Brazilian city of Porto Alegre and has since be instituted in one form or another in over 1000 cities worldwide. While the details vary enormously across cases, the basic idea is that ordinary citizens directly decide budgetary priorities for cities in various kinds of participatory assemblies. This constitutes a form of social empowerment because collective resources are allocated to different purposes by decisions made through voluntary association of people in civil society.
(2). Wikipedia. Wikipedia is a profoundly anti-capitalist way of producing and disseminating knowledge. It is based on the principle “to each according to need, from each according to ability.” No one gets paid for editing, no one gets charged for access. It is egalitarian and produced on the basis of horizontal reciprocities rather than hierarchical control. In the year 2000, before Wikipedia was launched, no one – including its founders—would have thought what has come to be was possible.
(3). Solidarity funds. In the province of Quebec unions have developed a specific kind of investment instrument referred to as “solidarity funds”. These funds are generated by contributions mainly from union members and are used for private equity investment in small and medium enterprises. The idea is to invest in firms which are relatively immobile geographically and rooted in the Quebec economy and which, in exchange for these long-term investments, agree to sign on to a charter of labor rights and principles of environmental sustainability. These firms remain capitalist insofar as they are profit-making firms in a capitalist market, but part of their capital comes from unions and a specific form of social power shapes the governance of the firms’ activities. They thus constitute a hybrid form combining capitalism and socialism.
(4) Worker-owned enterprises: cooperatives. From the early decades of the 19th century, worker-owned cooperatives have constituted a form of hybrid organization that combine capitalist and socialist elements. Prodhoun, in his famous conflict with Marx, argued that worker-owned cooperatives constituted both an alternative within capitalism and a strategy for challenging capitalism: because they would provide such a better way of life for workers, once they were well-established workers would leave capitalist employment for membership in productive cooperatives, eventually starving capitalism of labor power. Even if this scenario is not plausible, cooperatives are certainly one pathway of social empowerment, and we know under favorable conditions, cooperatives can be both economically efficient and organizationally stable. Mondragón in Spain is the iconic example: 270 separate worker-owned firms constitute the federation called the Mondragon Cooperative Corporation (MCC) – basically a Meta-cooperative of cooperatives. The MCC provides a wide range of services for its constituent units, including forms of cross-subsidization, risk reduction, work sharing and other mechanisms which help mute some of the pressures from the ordinary functioning of capitalist markets.
(5). Unconditional Basic Income. The idea of an unconditional basic income (UBI) is quite simple: Every legal resident in a country receives a monthly living stipend sufficient to live above the “poverty line.” Let’s call this the “no frills culturally respectable standard of living.” The grant is unconditional on the performance of any labor or other form of contribution, and it is universal – everyone receives the grant, rich and poor alike. Grants go to individuals, not families. Parents are the custodians of underage children’s grants (which may be at a lower rate than the grants for adults).

Basic income is generally defended on grounds of social justice, either focusing on the ways in which it deals with poverty in particular or on the way it neutralizes certain unjust forms of inequality. In the present context, a universal basic income can also be viewed as a way of infusing funds into forms of economic enterprise within which social empowerment plays a substantial role. The term “social economy” covers many such enterprises. One of the main problems that collective actors face in the social economy is generating a decent standard of living for the providers of social economy services. This is, of course, a chronic problem in the performing arts, but it also affects efforts by communities to organize effective social economy services for various kinds of care-giving activities – child care, elder care, home health care, respite care. It would be much easier for communities to mobilize various sources of funding for these activities if the basic standard of living was already taken care of through a basic income.
The problem of providing an adequate standard of living to members is also a chronic problem for worker cooperatives, especially in the early stages in which a cooperative is being established and members are learning how to function, work out organizational details, and develop productive capacity. A basic income would make it much easier for a cooperative to survive this learning phase and reproduce itself as an on-going economic organization. Because a basic income makes cooperatives more viable, this would also help solve some of the credit market constraints faced by worker-owned firms. One of the reasons banks are hesitant to loan funds to worker cooperatives is skepticism that the first will survive and be able to pay back the loans. Since workers typically do not have significant collateral, risk-aversion by lenders means that worker-coops are typically undercapitalized, which in turn makes it less likely that they will succeed. A basic income changes this equation, since now banks know that the revenue stream generated by the coops’ market activities does not have to provide basic income for the worker-owners. This reduces the risk that the cooperative will fail and thus makes credit more easily available.
Some would feel that in an effort to promote utopian visions that are ‘real’, you undermine hopes for more radical possibilities. In particular, in politics you advocate the continuing existence of the state, which appears to involve intrinsically dominating relationships. In economics, by contrast, all of your proposals involve the continuing existence of the market – an institution in which relationships are based on self-interest. Why do you advocate such apparently objectionable institutions?

I have three responses to this objection. First, if it were the case that a plausible argument could be made that the kinds of real utopian proposals I advance actually impeded the realization of a more radically democratic and egalitarian society, then this would be an important objection. But there really is no credible argument as far as I know that proposals I discuss—basic income, participatory budgets, worker cooperatives, solidarity funds, etc. – make more radical transformations less likely. So, even if one acknowledges that the state and markets are intrinsically objectionable, I don’t see how the probability of their eventual elimination is reduced by the kinds of proposals I advance. Second, under any foreseeable historical conditions the complete dissolution of state power and the complete disappearance of markets are utopian fantasies, not viable destinations. We can aspire to deepening democracy and extending its scope and thus subordinating more fully the state to social power, but this is not the same as the disappearance of the state. And we can struggle for egalitarian conditions of social justice in which the inegalitarian effects of markets are largely neutralized. But this is not the same as creating a comprehensively planned economy with no role for markets. Finally, I am not so sure that the state and the market are intrinsically objectionable; what are objectionable are their effects on power and inequality. The objections would largely disappear if state power is effectively subordinated to social power, and if the space for market relations is delimited by genuinely democratic processes and the inequality effects markets neutralized.

Take Back Parliament

Take Back Parliament is meeting in Leeds on Wednesday, June 30th, 6.30PM in the Adelphi pub on Bridge Street. Here's their message to supporters.

The purple rallies were just the beginning.
If we are to win a referendum on voting reform and consign the current broken and discredited system to the dustbin, we need to start organising now.
Last Sunday dozens of people met to plan the next stages of our campaign in London, and in Bristol, Birmingham and Brighton. This week, over 2000 of you wrote to Nick Clegg in less than 24 hours demanding a timetable for the referendum.
But this is just the start. Take Back Parliament is now organising in your home town:
http://www.takebackparliament.com/page/event/search_simple
Over the summer I'll be travelling to towns, cities and universities across the country to meet supporters and build a movement for reform. But I need your help.
Click below to find out about any meetings taking place near you - and be part of our movement for change:
http://www.takebackparliament.com/page/event/search_simple
I hope you can join me. Together we'll change this rotten system for good.
Thank you, and best wishes,
Andy MayTake Back ParliamentNational Coordinator
P.S - If you can't see one near you and want to get one started in your area, please email me.

George Monbiot: we talk, they act

Bogus and Misdirected, yes. But the Party has a lot to teach the left
The radical right has an authenticity the left lacks – it is angry and ready to translate that anger into action. We talk, they act
George Monbiot guardian.co.uk, Monday 14 June 2010

In the Netherlands a movement based on paranoia and the fleecing of the poor looks set to join the government. In the United States one of the biggest exercises in false consciousness the world has ever seen – people gathering in their millions to lobby unwittingly for a smaller share of the nation's wealth – has become the playmaker in Republican primaries. The radical right is seizing its chance. But where is the radical left?

Both the Freedom party in the Netherlands and the Tea Party movement in the US base their political programmes on misinformation and denial. But as political forces they are devastatingly effective. The contrast to the leftwing meetings I've attended over the past two years couldn't be starker. They are cerebral, cogent, realistic – and little of substance has emerged from them.

The rightwing movements thrive on their contradictions, the leftwing movements drown in them. Tea Party members who proclaim their rugged individualism will follow a bucket on a broomstick if it has the right label, and engage in the herd behaviour they claim to deplore. The left, by contrast, talks of collective action but indulges instead in possessive individualism. Instead of coming together to fight common causes, leftwing meetings today consist of dozens of people promoting their own ideas, and proposing that everyone else should adopt them.

It would be wrong to characterise the Tea Party movement as being mostly working class. The polls suggest that its followers have an income and college education rate slightly above the national mean. But it is the only rising political movement in the US which enjoys major working-class support. It voices the resentments of those who sense that they have been shut out of American life. Yet it campaigns for policies that threaten to exclude them further. The Contract from America for which Tea Party members voted demands that the US adopt a single-rate tax system, repeal Obama's healthcare legislation and sustain George Bush's reductions in income tax, capital gains tax and inheritance tax. The beneficiaries of these policies are corporations and the ultra-wealthy. Those who will be hurt by them are angrily converging on state capitals to demand that they are implemented.

The Tea Party protests began after the business journalist Rick Santelli broadcast an attack from the floor of the Chicago Mercantile Exchange on the government's plan to help impoverished people whose mortgages had fallen into arrears. To cheers from the traders at the exchange, he proposed that they should hold a tea party to dump derivative securities in Lake Michigan in protest at Obama's intention – in Santelli's words – to "subsidise the losers". (I urge you to watch the broadcast: it is the most alarming example of cheap demagoguery you are likely to have seen. It continues to be promoted by Santelli's employer, CNBC.)

The protests that claim to defend the interests of the working class began, in other words, with a call for a bankers' revolt against the undeserving poor. They have been promoted by Fox News – owned by that champion of the underdog Rupert Murdoch – and lavishly funded by other billionaires. Its corporate backers wrap themselves in the complaints of the downtrodden: they are 21st-century Marie-Antoinettes, who dress up as dairymaids and propose that the poor subsist upon a diet of laissez-faire.

Before this movement had a name, its contradictions were explored in Thomas Frank's seminal book, What's the Matter with Kansas? The genius of the new conservatism, Frank argues, is its "systematic erasure of the economic". It blames the troubles of the poor not on economic forces – corporate and class power, wage cuts, tax cuts, outsourcing – but on cultural forces. The backlashers could believe that George Bush was a man of the people by ignoring his family's wealth. They can believe that the media is a liberal conspiracy only by forgetting about the corporations (CNBC, Fox, etc) and the conservative billionaires who run it.

The movement depends on people never making the connection between, for example, "mass culture, most of which conservatives hate, and laissez-faire capitalism, which they adore" or "the small towns they profess to love and the market forces that are slowly grinding those small towns back into the red-state dust".

The anger of the excluded is aimed instead at gay marriage, abortion, swearing on television and latte-drinking, French-speaking liberals. The working-class American right votes for candidates who rail against cultural degradation, but what it gets when they take power is a transfer of wealth from the poor to the rich.

In the Netherlands, Geert Wilders' Freedom party performs a similar conjuring trick, persuading working- and middle-class voters that their real enemies are Muslims, while demanding tax cuts, abolition of the minimum wage and reductions in child benefits. It is only because of the general political doziness of the British electorate that such movements – despite the UK Independence party's best efforts – have not yet taken off here. Give them time.

Though most of what they claim is false, one of the accusations levelled by both the Freedom party and the Tea Party rings true: the left is effete. This highlights another contradiction in their philosophy: liberals are weak and spineless; liberals are ruthless and all-powerful. But never mind that – the left on both sides of the Atlantic has proved to be tongue-tied, embarrassed, unable to state simple economic truths, unable to name and confront the powers that oppress the working class. It has left the field wide open to rightwing demagogues.

The great progressive cringe is only part of the problem; we have also abandoned movement-building in favour of Facebook politics. We don't want to pursue a common purpose any more, instead we want our own ideas and identity applauded. Where are the mass mobilisations in this country against the cuts, against the banks, BP, unemployment, the lack of social housing, the endless war in Afghanistan? In the US the radical right is swiftly acquiring ownership of the Republican party. In the UK the left is scarcely attempting a reclamation of the Labour party, even as opportunity knocks.

Bogus and misdirected as the Tea Party movement is, in one respect it has an authenticity that the left lacks: it is angry and it's prepared to translate that anger into action. It is marching, recruiting, unseating, replacing. We talk, they act.

It strikes me that in the US the greater opportunities lie not in confronting the Tea Party movement but in turning it. As its mixed responses to Sarah Palin and Ron Paul show, it remains fluid and volatile. There's an opening here for trade unionists to move in and agree that an elite is indeed depriving working people of their rights, but it is not an intellectual elite or a cultural elite or a liberal elite: it is an economic elite. The radical right has something to teach us on this side of the Atlantic as well: the world is run by those who turn up.