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The COVID Class War – THE IRISH EXAMINER & Project Syndicate

Published by Anonymous (not verified) on Thu, 02/07/2020 - 4:51pm in


English, Op-ed

“Strengthening the solidarity of Europe’s oligarchs is not a good strategy for empowering Europe’s majority. Quite the contrary. Any “recovery” based on such a formula will short-change almost all Europeans and push the majority into deeper despair.”

ATHENS – The euro crisis that erupted a decade ago has long been portrayed as a clash between Europe’s frugal North and profligate South. In fact, at its heart was a fierce class war that left Europe, including its capitalists, much weakened, relative to the United States and China. Worse still, the European Union’s response to the pandemic, including the EU recovery fund currently under deliberation, is bound to intensify this class war, and deal another blow to Europe’s socioeconomic model.

If we have learned anything in recent decades, it is the pointlessness of focusing on any country’s economy in isolation. Once upon a time, when money moved between countries mostly to finance trade, and most consumption spending benefited domestic producers, the strengths and weaknesses of a national economy could be separately assessed. Not anymore. Today, the weaknesses of, say, China and Germany are intertwined with those of countries like the US and Greece.

The unshackling of finance in the early 1980s, following the elimination of capital controls left over from the Bretton Woods system, enabled enormous trade imbalances to be funded by rivers of money created privately via financial engineering. As the US shifted from a trade surplus to a massive deficit, its hegemony grew. Its imports maintain global demand and are financed by the inflows of foreigners’ profits that pour into Wall Street.

This strange recycling process is managed by the world’s de facto central bank, the US Federal Reserve. And maintaining such an impressive creation – a permanently imbalanced global system – necessitates the constant intensification of class war in deficit and surplus countries alike.

Deficit countries are all alike in one important sense: whether powerful like the US, or weak like Greece, they are condemned to generate debt bubbles as their workers helplessly watch industrial areas morph into rustbelts. Once the bubbles burst, workers in the Midwest or the Peloponnese face debt bondage and plummeting living standards.

Although surplus countries, too, are characterized by class warfare against workers, they differ significantly from one another. Consider China and Germany. Both feature large trade surpluses with the US and the rest of Europe. Both repress their workers’ income and wealth. The main difference between them is that China maintains huge levels of investment through a domestic credit bubble, while Germany’s corporations invest much less and rely on credit bubbles in the rest of the eurozone.

The euro crisis was never a clash between the Germans and the Greeks (shorthand for the fabled North-South clash). Instead, it stemmed from an intensification of class war within Germany and within Greece at the hands of an oligarchy-without-frontiers living off financial flows.

For example, when the Greek state went bankrupt in 2010, the austerity imposed on most of the Greek population did wonders to restrict investment in Greece. But it did the same in Germany, indirectly repressing German wages at a time when the European Central Bank’s money-printing was sending share prices (and German directors’ bonuses) through the roof.

Class warfare is arguably more brutal in China and the US than it is in Europe. But Europe’s lack of a political union ensures that its class war verges on being pointless, even from the capitalists’ perspective.

Evidence that German capitalists squandered the wealth extracted from the EU’s working classes is not hard to find. The euro crisis caused a massive 7% devaluation of the surpluses that the German private sector had accumulated from 1999 onwards, because capital owners had no alternative but to lend these trillions to foreigners whose subsequent distress led to large losses.

This is not only a German problem. It is a condition afflicting the EU’s other surplus countries as well. The German newspaper Handelsblatt recently revealed a notable reversal. Whereas in 2007, EU corporations earned around €100 billion ($113 billion) more than their US counterparts, in 2019 the situation was inverted.

Moreover, this is an accelerating trend. In 2019, corporate earnings rose 50% faster in the US than in Europe. And US corporate earnings are expected to suffer less from the pandemic-induced recession, falling 20% in 2020, compared to 33% in Europe.

The gist of Europe’s conundrum is that, while it is a surplus economy, its fragmentation ensures that the income losses of German and Greek workers do not even become sustainable profits for Europe’s capitalists. In short, behind the narrative of northern frugality lurks the specter of wasted exploitation.

Reports that COVID-19 caused the EU to raise its game are grossly exaggerated. The quiet death of European debt mutualization guarantees that the gigantic increase in national budget deficits will be followed by equally sizeable austerity in every country. In other words, the class war that has already eroded most people’s incomes will intensify. “But what about the proposed €750 billion recovery fund?” one might ask. “Is the agreement to issue common debt not a breakthrough?”

Yes and no. Common debt instruments are a necessary but insufficient condition for ameliorating the intensified class war. To play a progressive role, common debt must fund the weaker households and firms across the common economic area: in Germany as well as in Greece. And it must do so automatically, without reliance on the kindness of the local oligarchs. It must operate like an automated recycling mechanism that shifts surpluses to those in deficit within every town, region, and state. In the US, for example, food stamps and social security payments support the weak in California and in Missouri, while shifting net resources from California to Missouri – and all without any involvement by state governors or local bureaucrats.

By contrast, the EU recovery fund’s fixed allocation to member states will turn them against one another, as the fixed sum to be given to, say, Italy or Greece is portrayed as a tax on Germany’s working class. Moreover, the idea is to transfer the funds to national governments, effectively entrusting the local oligarchy with the task of distributing them.

Strengthening the solidarity of Europe’s oligarchs is not a good strategy for empowering Europe’s majority. Quite the contrary. Any “recovery” based on such a formula will short-change almost all Europeans and push the majority into deeper despair.

For the Irish Examiner site click here. For the Project Syndicate site click here.


Rift over Solomon Islands’ new ‘One China’ policy makes chaos of COVID-19 response

Published by Anonymous (not verified) on Tue, 30/06/2020 - 8:33pm in

A Taiwanese aid shipment destined for Malaita province got snaffled by police

Malaita residents welcome the humanitarian aid from Taiwan. Photos from the Facebook page of Malaita Province Premier Daniel Suidani

A confiscated aid shipment, a provincial leader playing by his own playbook, and an angry Chinese embassy.

These are all ingredients in the complicated COVID-19 response of the Solomon Islands, one of the few countries in the world yet to register a coronavirus case, but one that is still hurting economically from pandemic-related disruptions.

At the heart of the confusion is a very recent diplomatic shift.

After 36 years of diplomatic relations with Taiwan, Solomon Islands recognized China and adopted a ‘One China’ policy in September 2019.

But the Solomon Islands is an archipelago nation and not all the parts of its whole agreed with the decision.

Pro-Taiwan Daniel Suidani, premier of Malaita province — the most populous province in the Solomon Islands — has consistently refused aid from the Chinese government.

And so the province has remained an outpost of Taiwanese influence, a fact that has taken on greater importance as an emboldened Tapei employs COVID-19 diplomacy to boost its international profile.

Suidani has made little effort to play things down.

In fact, on June 8, he dialled up the controversy by issuing a statement hailing Taiwan after it sent rice, face masks, and medical equipment to Malaita:

Fellow Malaitans, we are in a unique and privileged position to have been assisted by a country that has stood against the might of the Wuhan virus.

He also disparaged the national government’s ‘One China’ policy:

What we are doing today to reach out for the protection of our survival is nothing new. It looks new only because of the newly introduced frameworks and institutional set ups. However, the limitations under these frameworks must not be used to limit our ability as a people to find appropriate support in times like this.

‘It is noted with deep concern…’

These comments were never going to go unnoticed. Foreign Minister Jeremiah Manele swiftly released a press statement criticizing Suidani's “divisive” and “inflammatory” remarks:

Such a divisive statement from a Provincial Premier threatens the unity of the country at a time when we need to work together in keeping COVID-19 from entering our borders and not politicize the virus.

Minister Manele calls for respect for government’s foreign policy and urges those who continue to make provocative and inflammatory statements to stop and work towards building a strong united country.

The Chinese embassy fumed, describing Suidani’s statement as “irresponsible”:

It is noted with deep concern that leaders of the Malaita provincial government have recently made irresponsible remarks and actions against the ‘One China’ policy adopted by the Solomon Islands national government.

The claims and actions by the Malaita provincial leaders are illegitimate, inappropriate, and entirely wrong. It breaches the sovereignty and territorial integrity of China and hurts the national feelings of the Chinese people.

‘Malaita lives matter’

But Malaita's local leader found support in the country's parliament. Peter Kenilorea Jr, the chair of the Foreign Relations Committee demanded to know why the government had failed to express official gratitude for the humanitarian aid provided by Taiwan. Based on the statement published by the SB herald, the lawmaker noted:

There was not even a simple ‘thank you’ from the national government for this humanitarian assistance to one of its largest provinces. The silence on this humanitarian aid by a former diplomatic friend, who is now supposedly an integral part of our new partner, was deafening.

More scandal was still to come.

On June 11, the Malaita provincial government reported that the national police had confiscated a shipment from Taiwan containing medical supplies that were intended for Malaita.

The police said it had confiscated the shipment because it looked suspicious. It claimed that the sender’s address was not proper and that the consignment had not been addressed to the Malaita Provincial Government.

But the media later reported that the office of the country’s attorney general had sent a letter notifying the police that “the medical supplies reportedly being sent by Taiwan to Malaita Province is an Act of defiance of the decisions of the government”.

It further warned that the shipment may “include materials that may be in breach of the Sedition Act.”

On June 24 opposition leader Matthew Wale condemned the actions of the police and the national government:

This is inexcusable, and it only makes a mockery of our efforts to prepare our people against Covid-19 and the State of Emergency.

I, therefore, call on the government to stop dancing to Beijing’s tune and prioritise our people’s health and safety.

An online campaign themed ‘Malaita Lives Matter, Release COVID-19 Equipment’ has since been launched to press for the release of the confiscated medical supplies.

The Malaita provincial government said it is preparing legal action to immediately retrieve the shipment from Taiwan.

AL-AKHBAR: Long interview with Léa El Azzi on capitalism after the pandemic, Europe, Greece, Lebanon & the IMF

Published by Anonymous (not verified) on Tue, 30/06/2020 - 4:03pm in

The pandemic is not the first crisis (if we can say so) that hit capitalism all over the world. what is the difference between this one and the previous crisis? 

The obvious one is that Covid-19 dealt capitalism an external shock, like an earthquake or a meteor that strikes at both production lines and consumption at once. In contrast, the 2008 financial collapse, for example, was an internal, an endogenous, shock that was created, within, by the system itself. Having said that, the reason why the pandemic will prove so damaging is that capitalism had never recovered from the 2008 crash. Back then, it was the financial sector that crashed and burned. Central banks and governments refloated the financial sector by means of trillions of dollars of new money. However, this liquidity did not turn into actual investment in the real economy. So, while the banks recovered, and the oligarchy found themselves with appreciating assets, the majority our there had to face harsh austerity. This boosted the disconnect between available liquidity and investment in good jobs and its associated disconnect between the world of money (that was doing well) and the world of the real economy (which was not). Company shared were high but profitability was low. So, when Covid-19 arrived on the scene, it acted like a pin that bursts a gigantic bubble. Reflating this bubble, in the absence of serious public investment, will not be possible however much money Central Banks pump into the financial markets.

Why does capitalism face so many problems and challenges, despite the absence of ideological competitors?

Because that’s what capitalism is wonderful at doing: Producing technologies that undermine itself. The process at work is fascinating: In the real economy, new machines come into play that cut down the content of labour per unit of output. New jobs are created lower down the hierarchy of work. This means that machines play an increasing role in producing great new products which the machines will never want and which humans are decreasingly able to afford. Meanwhile, in the world of money, financiers constantly create new forms of debt that disguise themselves as a form of private money. Its accumulation eventually leads to a crash due to a string of bankruptcies. The combination of these dynamics, in the real and in the money worlds, inexorably produce one crisis after the other.

Why throughout the years, the economic success was not accompanied by improvements in peoples’s lives? Is it one of capitalism problems now? 

Defenders of capitalism dispute this. They roll out statistics that show a steady increase in average living standards over the past one hundred and fifty years, presenting it as evidence that capitalism has been good for humanity. While it is true that average real incomes have increased, especially in China and other developing countries, it is not at all clear that this has been a victory either for capitalism or for humanity. Take China, for example. While it has relied on the market and on private enterprise, it would never have grown the way it did if it was not for the capacity of its government to direct investment and determine the income distribution in ways that capitalism would have made impossible – in other words, without the Communist Party and its structures. Additionally, defenders of capitalism ignore the simple fact that a rise in incomes does not necessarily mean a rise in the quality of life. To give an extreme, but not misleading, example, take Australia’s Aborigines. Before the Europeans arrived in Australia, they had no income. But they had a rich and fulfilling life. Today, their majority receive government benefits but lead broken lives. Is this progress?

Will Covid- 19 bring down capitalism? Or do you think it is just a battle inside the same capitalist camp, and capitalism will win again?

The death of capitalism has been pronounced so many times that it is unwise to do so once again. What I can say is, first, that Covid-19 has struck at a time when capitalism was particularly fragile (and, therefore, all the talk of a quick recovery is inane) and, secondly, how this crisis affects humanity will depend on what we do, on how we react. Nothing is written in stone.

If we will set another regime, what will be? and do you think China and Cuba could have an advantage after their role in fighting the virus and helping other countries? — Miatta Fahnbullah wrote in “Foreign Affairs” that “A new economic model is needed, one that adapts traditional socialist ideals to contemporary realities”, you agree?

Yes, of course. Strong public health systems have proven themselves immeasurably better, and more resilient, than private ones. Capitalism’s reliance on just-on-time supply chains that no collective agency can plan or direct is proving its Achilles Heal. How could we have organised production and distribution differently? What might Postcapitalism look like? I have been struggling with these questions for a long time. Alas, this coming September I am bringing out a new book that offers my answer, for whatever it is worth. It is entitled: ANOTHER NOW: Dispatches from an alternative present.

You said that “either we unite with progressives around the planet in a shared struggle for justice, or we surrender to the forces of nationalism and free-market fundamentalism”, how could reuniting progressives help in any way?and what is your plan beside the website?  

Let me give you a simple example: During every recent crisis, bankers banded together and forced governments to apply socialism – for them! The price was austerity and hardship for almost everyone else. This led to discontent. Discontent then breeds fascism, xenophobia, nativism, ultra-nationalism. The representatives of this misanthropic type of politics unite across borders (look at the love in between Trump, Bolsonaro, Modi, Le Pen, Salvini etc.). Is it not the time for progressives to band together in the interests of the majority in every country, on every continent?

This is what our Progressive International is about. How are we organising this, besides a website? In two ways. First, by putting together a global plan for shared, green prosperity. (We must be able to answer questions such as “How much should we spend on fighting climate change? Where will the money come from? How will we redistribute wealth from the few to the many and from the Global North to the Global South?”) Secondly, by organising global actions in support of local causes (e.g. a global campaign in support of a few striking women workers in, say, India). To accomplish these hugely hard, but essential, tasks the Progressive International has put together a Council, comprising leading activists from around the world, and a Cabinet, consisting of a few dedicated organisers working on our campaigns on a day-to-day basis. Our next meeting will take place on 18th September in Iceland, under the aegis of Katrin Jacobsdottir, the country’s Prime Minister.

What should be the role of the state in all of this, specially after the Covid 19 and critics to capitalism and private sectors which was not able to cope with the crisis?

The state’s role is crucial. Even politicians inspired by small-government libertarianism have had to call for governments to step in and, effectively, save everyone. The question is not whether the state has a role. The question is: On whose behalf is the state acting?

Part 2: Europe after the pandemic

How will Covid – 19 change Europe? 

It will make it even more fragmented, insular and wrought by nationalism. Europe’s historic failure came in 2010, when a financial sector crisis was dealt with as if it were a great opportunity to cement the policy of socialism for the bankers and austerity for everyone else. As a result, our democracies were poisoned and powerful centrifugal forces began to tear apart any sense of a union. Covid-19 simply reinforced these forces.

This is not a “traditional economic crisis”, and it’s been very long time since the world faced something alike, but we notice that governments and nations are making “traditional moves”, specially with  releasing new bonds. Yanis Varoufakis doesn’t agree with these procedures, but why should European institutions continue in supporting a failed financial system by saving creditors? And what should be done instead?

Because our political system belongs to the failed financiers. It is they who, for years, financed political campaigns. It is they that wrote the rules of our monetary union, both during the good and the bad times. And it is they who have the power to impose upon the rest of society that the rest of society bails them out from the mess of their own doing. It is oligarchy par excellence.

Why you said that the last thing businesses in Germany, in Italy, in France, in Greece need now is loans? and how loans could affect them?

It is crucial that we never mistake a bankruptcy for a case of illiquidity. If the estimated value of your future income is greater than your debt, you are solvent. But, you may be ‘illiquid’, i.e. lacking cash. In these cases, a loan is both sensible and useful. However, if your debt is lower than your future expected income, no loan can help – all it will do is magnify your debt and push you deeper in bankruptcy. It is in this sense that I said that businesses do not need loans so much now. They need cash injections or, better, a debt restructure – under conditions that society places upon them (e.g. how they treat their workers, the environment, their customers etc.)

Could European institutions finance governments directly?

The European Central Bank cannot, due to a severe restriction in its charter. But, there are a myriad ways in which member-state deficits and debts could be mutualised – the first step toward a proper union.

All we talk about is saving European economies and markets, what about citizens, and the social impact of the pandemic?

I never talk about anything other than our main task, which is to minimise human misery and to maximise shared, real, green prosperity. If I indulge in any discussion about banks, bonds and fiscal policy is because these are the tools by which so few people destroy the lives of so many.

Part 3: Greece and IMF

Did Greece recover after the program with IMF? – if no, why?

Of course not. The reason is simple: The joint IMF-EU program was never about helping the Greek people recover. It was all about, primarily, saving four or five French and German banks by cynically transferring their gargantuan losses onto Europe’s taxpayers, using the Greek Treasury as an intermediate stop for the bailout funds. A secondary role of this IMF-EU program was to force the people of Greece into permanent debt bondage so as to ‘teach’ others (e.g. the Spanish, Italians, French) an important lesson: You do as you are told or else…

Economically speaking, what were the benefits of the program and negatives?

Precisely zero benefits, unless you were an oligarch. As for the negatives, it suffices to mention two: First, permanent debt bondage. Second, desertification, as your young (especially the better educated) are migrating in droves.

If not asking for IMF “help”, what else could have Greece do?

Declare bankruptcy. And then take it from there. Yes, it would have been costly. But, with hard work it would have been possible, either inside or outside the euro, to climb out of the hole. Under the IMF-EU program, this was – and remains – impossible, the result being that all the sacrifices are wasted.

Part 4: Lebanon economic / financial crisis and its IMF Program 

The Lebanese government put recently a “Financial Recovery Plan”, claiming that the “lebanese economy is in free fall” and that an “international rescue package to backstop the recession and create the conditions for a rebound. In parallel a quick delivery on long-awaited reform measures is critical to help restore confidence”. The minister of finance started the negotiations with IMF, and government say that it is the only way out. Why? Is the IMF a solution for the problem or a problem itself? Can we really negotiate to get a better deal, or it’s a package “take it or leave it”, specially for a small country that every day one American responsable give a statement telling us what we should and should not do?

Just like Greece in 2010, Lebanon is facing a moment of truth, a great dilemma. Become a vassal of the IMF and hope for a miracle that becomes less and less likely in the era of the post-pandemic depression. Or, take the pain but also take matters in the hands of its people. There are no easy solutions. But there is a clear choice.

The IMF program can never work for the majority. It may end up a complete disaster, with even the richer Lebanese suffering hugely. Or it may end up as a partial disaster, leading to some benefits for the better off while the majority languish in deeper debt and misery than ever. In either case, the majority of young Lebanese, especially the better educated, will leave the country, thus draining it of its most precious capital. The reason the majority are condemned under the IMF program is that this is what it is meant to do: A mild restructure of banking, personal and public debt in exchange for a massive redistribution of income, and in particular wealth, from the poor to the oligarchy-without-frontiers. While the IMF can, potentially, restore in Lebanon a semblance of normality, this will be bought at the price of the permanent expropriation of whatever little prospects and wealth the ‘little’ people have.

The alternative takes courage and political organisation. Throwing out the IMF, unilaterally haircutting your dollar or euro denominated debt, nationalising the banks, launching a new currency under a reconstituted central bank… these would be the first steps. Undoubtedly, it is a thorny and treacherous path as the world’s powerful will treat your people as a rebel army. But, if they see that you are pulling together and are using this crisis as an opportunity to eradicate corruption and cronyism, they will eventually relent. Iceland was in the same situation at the beginning of the 2008 crisis. They followed this hard road. And they won. There is no reason why a small country cannot assert its right to sovereignty from the global oligarchy that the IMF represents.


Europe’s Recovery Fund: An instrument of class war against weaker Europeans everywhere

Published by Anonymous (not verified) on Mon, 29/06/2020 - 9:53pm in


English, Op-ed

Europe never was the battlefield on which the frugal North clashed with the profligate South. Instead, every European country has been the battlefield where a vicious class war is fought by a transnational oligarchy-without-frontiers training its armour against the weaker residents of every country, every region, every community. Covid-19, and the European Union’s response to it, only magnifies the human costs of this unremitting class war. All talk of a North-South clash is founded on a gigantic lie, that is based on many small truths, conveniently hiding from Europeans’ gaze the class war that diminishes their life prospects.

The crisis of financialisation in 2008 intensified Europe’s class war massively, holding a majority of Northern and Southern Europeans behind and leaving Europe, including its capitalist class, much weakened in relation to the rest of the world – the United States and China in particular. Twelve years on, Covid-19 gives this crisis a new, violent spin. The weak are weakened much, much more while Europe as a whole falls further and further behind the United States and China.

While the EU’s leadership and bureaucracy have been quite active in the past three months, producing one impressive-sounding policy announcement after the next, the sum of their actions boost the class war that enfeebled Europe over the past decade and weakened a majority of Europeans everywhere.

The context: Europe’s place in the Global Class War

To understand the nature of Europe’s class war, we need first to re-assess the global class war underpinning Globalisation. In the era of global capital flows and financialisation, nation-state-based analyses of economics, finance and politics are bound to mislead. Indeed, if we have learned anything in recent decades, it is that it is pointless to focus on any single country’s economy.

Once upon a time, when money moved between countries mostly to finance trade, and much of domestic consumption was satiated by domestic producers, it was possible to assess the strengths and malignancies of a national economy. Not anymore. Today, the malignancies of China and Germany are viciously intertwined with the malignancies of countries like the United States and Greece.

The unshackling of finance in the early 1980s, following the end of the capital controls left over from the Bretton Woods system, enabled gargantuan trade imbalances to be funded by rivers of money created privately via financial engineering. American hegemony grew as the United States shifted from a trade surplus to a massive trade deficit because global demand is maintained by American imports which, in turn, are financed by a flood of foreigners’ profits into Wall Street – a strange recycling process that is managed by the world’s de facto central bank, the Federal Reserve. Maintenance of this majestic, albeit utterly imbalanced, system necessitates the constant intensification of class war both in the deficit and in the surplus countries.

Deficit countries are all the same, at least in one important sense: They are condemned to generate debt bubbles and for their working classes helplessly to watch as industrial areas morph into rustbelts, whether they are powerful countries like the United States or weaklings like Greece. Once the bubbles inevitably burst, workers from the Midwest to the Peloponnese are, thus, engulfed by debt bondage and free-falling living standards.

Surplus countries differ a great deal from one another, the commonality of the fierce class war against their working classes notwithstanding. Take, for example, China and Germany. Both feature large trade surpluses in relation to the United States and the rest of Europe. And both repress their working class’ income and wealth. The important difference, however, between China and Germany is that, while China maintains huge levels of investment through a domestic credit bubble, Germany’s corporations invest much less and rely on the credit bubbles building up in the rest of the eurozone – credit bubbles that benefit massively the local oligarchies in Greece etc.

The true nature of the euro crisis thus becomes obvious: It was never a clash between the Germans and the Greeks, whom I use here as shorthand for the fabled North-South clash. Instead, what we always had was an intensification of class war within Germany and within Greece at the hands of an oligarchy-without-frontiers living off financial flows disproportionate to actual production or trade. For example, when the Greek state went bankrupt in 2010, the austerity imposed on most of the Greek population did wonders to restrict investment not only in Greece but also in Germany, thus indirectly repressing German wages at a time when the central banks’ money-printing was pushing share prices and German directors’ bonuses through the roof.

Adding to this picture the fact that Deutsche Bank was made whole by the Greek ‘bailout’, that Fraport and other German companies were given for a pittance 14 lucrative Greek airports and other public assets, that the Greek oligarchs were also bailed out by the EU and were enlisted in the fight against the Greek Spring of 2015, it is clear how the EU’s institutions worked tirelessly so that the euro crisis is not wasted – that it ended up benefitting German and Greek oligarchs at the expense of Greek and German workers and smallholders.

Bungled Exploitation: A very European failure

Class war is, arguably, more brutal in China and in the United States than in Europe. However, the lack of a European political union ensures that Europe’s class war is verging on the pointless, even from the capitalist class’s perspective. Proof that German capitalists squandered the wealth extracted from the working classes of the European Union is not hard to find. The surpluses the German private sector amassed from 1999 onwards were devalued by a massive 7% (compared to a 50% gain of US assets) courtesy of having no alternative but to lend theses trillions of euros to assorted foreigners whose subsequent distress led to large losses.

This is not only a German problem. It is a condition afflicting the other surplus EU countries as well. Handelsblatt revealed last week a notable reversal. Whereas in 2007 EU corporations earned around €100 billion more than their US counterparts, in 2019 the situation was reversed. Moreover, this is an accelerating trend. Only in 2019, corporate earnings rose 50% in the US more than in Europe while, projections suggest, that in 2020 the US corporates will lose 20% of their earnings compared to 33% in Europe.

The gist of Europe’s conundrum is that, while it is a surplus economy, its fragmentation ensures that the incomes losses of German and Greek workers do not even become sustainable profits for Europe’s capitalists. In short, behind the narrative of Northern Frugality hides the spectre of Bungled Exploitation.

The European Union’s economic policy agenda in response to Covid-19

Rumours that Covid-19 caused the EU to lift its game are grossly exaggerated. Good people who took heart from the news that, however reluctantly, the EU has embraced common debt in a bid to further the cause of paneuropean solidarity, will soon be deeply disappointed. Behind the heroic pronouncements and the triumphant propaganda lurks a sordid truth: The class war against Europe’s weaker people is escalating. And so is Europe’s descent into global irrelevance.

It all began with the quiet death of the Eurobond. Eurobonds, as advocated by DiEM25, would perform a simple task: They would automatically convert any new Italian, Spanish or Greek public debt (due to the impact of the pandemic on public revenues and expenses) into European debt (in the same way that US Treasury Bills absorb the costs of a recession in Missouri and Wisconsin). But, once the Eurobond was killed off by the Eurogroup in early  April, it is now a given that the gigantic increase in national budget deficits will be followed by equally sizeable austerity in every country – a euphemism for the intensification of the class war that depletes the already atrophied incomes of the majority in each of our countries.

What about the large Recovery Fund under deliberation currently? Can it absorb austerity’s impact and thus shield Europe’s working classes from a further loss of income and prospects? Is perhaps the agreement for the European Commission to issue common debt to fund this Recovery Fund Europe’s Hamiltonian moment and an opportunity to bring about solidarity with the weak across the Continent? I am afraid the answers to these questions is a large, unequivocal ‘No!’

Yes, common debt instruments are a necessary condition for ameliorating the intensified class war. However, they are not a sufficient condition. Two are the conditions for common debt to play a potentially progressive role; i.e. one that favours the weaker people across an economic block:

First, that the common debt is open-ended, rather than fixed term. If debt is issued for a specific period of time, and needs to be repaid by a certain deadline to the full, it constitutes a loan from the surplus to the deficit regions and from the rich to the poor citizens; i.e. it is the opposite of… solidarity. Lest we forget, the EU’s Recovery Fund is exactly this: a fund with an expiry date to be funded by common debt that must, however, be fully repaid by a certain deadline.

Secondly, to play a progressive role, common debt must fund the weaker citizens and firms across the common economic area: in Germany as well as in Greece. Automatically. Without reliance on the kindness of local oligarchs. It must operate like an automated recycling mechanism that shifts surpluses to those in deficit within every town, region, state. In the United States, for example, without any involvement of governors and local bureaucrats, food stamps and social security payments support the weak in California and in Missouri while, at once, shifting resources from California to Missouri. [Which is, of course, why American class warriors are hellbent on cutting social security and curtailing food stamps.]

In sad contrast, the so-called European Recover Fund was announced complete with a precise sum of euros to be dispensed to each nation-state via its government. This fixed allocation to different member-states will turn one nation against the other, as the fixed sum to be given to Greece will be portrayed in Germany as a tax on Germany’s working class. Moreover, one can only be appalled by the idea of transferring monies to the Greek government, effectively entrusting the local oligarchy behind it with the task of distributing the monies to the people of Greece!

Conclusion: Europe’s class war and fragmentation will intensify in the post-pandemic era

The media adore a boxing match allegory. While the Dutch, Finnish, German and Austrian representatives attempt to water down the EU’s Recovery Fund, commentators will be making the most of the opportunity to present Europe as a ring in which, in the blue corner, the Frugal Protestants prepare to take on the Profligate Greco-Romans in the red corner. However, in exactly the same way that the spectre of trade wars between China and the United States is employed to hide the intense class wars within the United States and within China, so too in Europe the real bout is between a North-South alliance of oligarchs against everyone else.

There is, however, a difference that distinguishes Europe’s class war as particularly inane: Unlike China and the United States, whose institutions are capable of managing the class war so as not to weaken their corporations, Europe’s institutions are incapable of doing this. Thus, European capitalism wanes even though the class war against the weaker Europeans intensifies. In short: European oligarchs are not even good at serving their interests! Europe’s class war is intensifying but European capitalism falls behind day in day out. Bungled exploitation seems an apt term here.

Where Europe’s establishment seems to have improved is in its capacity to convince even some progressive Europeans (desperate for some good news) that recent policy announcements, like the EU’s Recovery Fund, are broadly in the right direction. They are the opposite. A good look at the Recovery Fund’s makeup, seen against the backdrop of huge new austerity, dispels any hope that the unremitting class war against Europe’s many is about to subside. Instead, what becomes obvious is that the EU is, yet again, investing in solidarity among oligarchies – North and South, East and West.

Solidarity amongst Europe’s oligarchs will never empower Europe’s majority. It will only intensify the omnipresent class war that short-changes almost all Europeans and pushes a majority of them into despair. This is why DiEM25, our transnational Democracy in Europe Movement, is more relevant than ever: Because the only force that can oppose the oligarchy’s class war tactics is a transnational movement that knows no frontiers and transcends the borders of Europe’s member-states.

What’s wrong with capitalism? Interviewed by Rudyard Griffiths

Published by Anonymous (not verified) on Sat, 20/06/2020 - 6:52pm in

Anish Kapoor on India, Israel, life in the UK and, of course, art, art and art. On DiEM-TV’s ANOTHER NOW, 15th June 2020

Published by Anonymous (not verified) on Wed, 17/06/2020 - 2:09am in

I spent Monday night, 15th of June, chatting with Anish Kapoor for an hour. I began by asking him about life in 1950s India as the child of a Punjabi Hindu Admiral and a Bagdadi Jewish mother. Our conversation moved on to a Kibbutz in Israel before landing in Blighty and in particular Hornsby Art School, where he encountered a kind of freedom that art schools lack today. It shifted to form and poetry, to his various phases as a sculptor and multi-faceted artist. Thatcherism, commodification, the joys of solidarity and the need for progressive internationalism entered our conversation almost uninvited. It was a joy and an honour to spend those sixty minutes with him. Highly recommended viewing, even if I am saying so myself!

Surprise in Papua New Guinea as Prime Minister rejects the renewal of license for major gold mine

Published by Anonymous (not verified) on Mon, 15/06/2020 - 1:16am in

“The world will not end if Porgera closes.”

Porgera gold mine. Photo by Richard Farbelini from Wikipedia licensed under public domain.

In an unexpected move, Papua New Guinea (PNG) Prime Minister James Marape announced on April 24 that one of the largest gold mines of his country will not see its mining lease renewed. This decision has launched a intense debate about the future of the mining industry, a key pillar of the PNG economy.

A surprising announcement

Marape's decision has ignited an intense discussion PNG: the Porgera mine site which will see its license end is a major and international investment in the country. The site is is managed by Barrick Niugini Limited (BNL), a joint venture between Canada-based Barrick Gold, Chinese firm Zijin Mining, the Enga’s provincial government, and Porgera landowners.

The Porgera site started operating in 1990. It is an open-pit and underground mine which produces a million ounces of gold a year, and employs more than 5,000 people. The mining operation has boosted local revenues but it also drew local complaints about its negative impact on the environment. Human rights violations were also reported in communities surrounding the mine. Marape cited environment and resettlement issues to support his announcement to close the mine.

BNL’s lease expired on August 18, 2019. There were negotiations about extending the lease for another 20 years but in the end, Marape decided to reject the application, surprising key players in the mining industry. Yet Marape, who ran on a ‘Take Back PNG’ election campaign in 2019, had announced that if elected, he would seek to get a bigger revenue share from the operations of multinational companies in the extractive industry.

Marape wrote on Facebook on April 27 to assure his constituents that “the world will not end if Porgera closes.” He also asked Barrick Niugini Limited to work with his government in implementing a transition phase and exit plan:

Now that your lease has expired, the legal process is there for Barrick to comply so you can maintain your operation until an agreed exit time we both secure at negotiations when mutual obligations are retired.

My letter will ask Barrick to continue operating the mine when we go through this phase, but if you sabotage or close the mine, you leave me no choice but to invoke orders to take over the mine for the sake of land owners and provincial government who should be getting bigger equities, plus the employees and contractors who are presently working with the mine.

In a subsequent Facebook post on April 29, he reminded local stakeholders that the government has a plan for them:

To all staff at Porgera that is laid off at this time, we are working to restore you all back to work at the earliest. Hang in there!

Your loss of income will be compensated and none of you will lose your job and you will be back working when the mine is opened.

To all contractors of Porgera, you will still be required.

To all land owners of Porgera, this is your moment! You will sit on the table as greater free equity owners.

BNL described Marape’s decision as “tantamount to nationalisation without due process.” The company added that Marape’s government has failed to consult local landowners:

The Government has also ignored the wishes of the Porgera landowners, who overwhelmingly support the extension of BNL’s lease, and the Prime Minister has refused to consult them or even hear their views.

A group of landowners criticized the non-renewal of the lease and warned about its disastrous impact on the local economy:

The ill-conceived decision not to extend the Porgera Mining Lease, and the resulting economic chaos that has brought to our people is causing us much pain, but the Government has never come to us to ask our views or to explain why they are making these decisions that affect us so much.

We already suffer from an uncertain future as our peoples’ livelihoods are impacted by the Covid-19 pandemic and the suspension of mining operations at Porgera after an ill-conceived decision by the government over the refusal of SML [Special Mining Lease] extension without consulting the landowners.

Can PNG make the shift to sustainable development?

The underlying issue for PNG is to what extend it can control its model of economic development. Public opinion, though, remains divided over the question: some landowners saw the wisdom of what Marape did and its potential to develop a better development model for the country. An editorial published by Post-Courier newspaper urged the government to manage the country’s resources well and pursue programs aimed at establishing a self-reliant economy.

But there are also other views: a writer cautioned Marape not to act like a dictator in a democracy where rule of law is supposed to be upheld. BNL has since filed a court petition questioning the action of the PNG government.

While a PNG journalist has appealed for dialogue to resolve the issues related to the lease, it is unclear if both sides are ready for negotiations: On May 29, BNL announced that it is ready to increase the stake of local landowners in the Porgera lease, yet on June 5, PNG’s Mineral Resources Authority accused BNL of attempting to illegally export gold to Australia, an act denied by the company. On the same week, BNL said it received a court notice that there will be a judicial review of the non-renewal of the lease scheduled on July 20.

Finally, on June 10, the country’s parliament has passed an amending law that would increase the government share in extracting the country’s oil, gas, and mining resources. Marape thanked the parliament for the law. He wrote a message addressed to investors on his Facebook page:

I can assure our investors that we know they must make money for their shareholders too so we will not be greedy but we just asking for a fair share, if they want to harvest our resources.

The Porgera mine lease issue has rekindled previous debates about what constitutes a fair deal in allowing companies to extract the country’s finite resources. This will remain a contentious issue but whatever action the government will carry out is going to have a lasting impact on the country’s economic future.

Julian Assange just called. To talk about the pandemic’s effect on capitalism & politics!

Published by Anonymous (not verified) on Sun, 14/06/2020 - 12:10am in

Julian called me a little earlier on, at 14.22 London time to be precise. From Belmarsh High Security Prison of course. This is not the first time but, as you can imagine, every time I hear his voice I feel honoured and moved that he should dial my number when he has such few and far between opportunities to place calls.

“I want a perspective on world developments out there – I have none in here”, he said. Which, of course, placed a considerable burden on me to articulate thoughts on capitalism’s fate during this pandemic and the repercussions of it all on politics, geopolitics etc. The knowledge that Her Majesty’s Prison authorities would discontinue our discussion at any moment made the task harder.

In a feeble attempt to paint a picture for him on as broad a canvass as possible, I shared with Julian my main thought of the last weeks:

Never before has the world of money (i.e. the money markets, that include the share markets) been so decoupled from the world of real people, real stuff – from the real economy.

We watch in awe as GDP, personal incomes, wages, company revenues, businesses small and large, collapse while the stock market is staying relatively unscathed. The other day, Hertz declared bankruptcy. When a company does this, its share price goes to zero. Not now. In fact, Hertz is about to issue $1 billion worth of new shares. Why would anyone buy shares of an officially bankrupt company? The answer is: Because central banks print mountain ranges of money and give it for almost free to financiers to buy any piece of junk floating around the stock exchange.

“Complete zombification of the corporations”, is how I put it to Julian. Julian commented that this proves that governments and central banks can keep corporations afloat even when they sell next to nothing at the marketplace. I agreed. But, I also pointed out a major conundrum that capitalism faces for the first time. It is this:

Central bank money printing keeps asset prices very high while the price of ‘stuff’ and wages fall. This disconnect can go on growing. But, when Hertz, British Airways etc. can survive in this manner, they have no reason not to fire half the workforce and to cut the wages of the other half. This creates more deflation/depression in the real economy. Which means that the Central Banks must print more and more to keep asset and share prices high. At some point, the masses out there will rebel and governments will be under pressure to divert some income to them. But this will deflate asset prices. At that point, because these assets are used by corporations as collateral for all the loans they take out to stay afloat, they will lose access to liquidity. A sequence of corporate failures will commence under circumstances of stagnation. “I don’t think capitalism can easily survive, at least not without huge social and geopolitical conflicts, this conundrum”, was my conclusion.

Julian thought about this for a moment and asked me: “How important is consumption to capitalism? What percentage of GDP is at stake if consumption does not recover? Do the corporations need workers or customers?” I answered that it was high enough to make this conundrum real. Yes, Central Banks and robots can keep the corporations going without customers or workers. But, robots cannot buy the stuff they produce. So, this is not a stable equilibrium. The losses in people’s incomes will accelerate, thus generating pivotal discontent.

Julian then said something along the lines of: That will benefit Trump who knows how to feed off the anger of the multitudes toward the educated, upper middle-class elites. I agreed, saying that DiEM25 has been warning since 2016 that socialism for the oligarchy and austerity for the many, in the end, feeds the racist ultra-right. That we are experiencing again what happened in the 1920s in Italy with the rise of Mussolini.

Julian agreed entirely and said: Yes, like then, there is an alliance forming between rich people and the discontented working class. He then added that most of the prisoners and the prison officers in Belmarsh support… Trump. At that point the connection was cut off.

Our conversation lasted 9’47’’. It was more substantive, and of course moving, than any conversation I have had in a while.

The Extradition of Julian Assange – Video by Novara Media

Published by Anonymous (not verified) on Sat, 13/06/2020 - 7:05pm in

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