Monthly Archives: June 2013

Revealing the truth about Anglo-Irish Bank – RTE censorship and ICTU complicity

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David BeggThe release of the tapes recording the Executives of Anglo-Irish bank conspiring to rob billions from the Irish people has led to a clamour for an enquiry so that the full truth can be revealed.  In my last post I argued that this truth includes the plain and obvious fact that it has been the State that has made the reckless gambles of Anglo the burden of the people.  These Executives showed no great concern that the organs of the State would prove any barrier to their plans.  In this they were of course proved exactly right.

I argued that what is required is that workers should fight for their own inquiry to reveal this and other truths that remain obscured, not least by the media that presents itself as the vehicle for revealing the truth.  I suggested that workers should fight in their trade unions to launch such an inquiry.

I have just received an email that throws light not only on the role of the media but also that of the trade unions.  In particular it shows that the leadership of the trade union movement in the person of its General Secretary, David Begg, has questions to answer over his complicity in the complete and utter failure to regulate Anglo-Irish bank.

The text below recounts the intervention of a reader of the blog into RTE’s Liveline radio programme, which addressed the Anglo tapes.  She questioned the role of David Begg, which subsequently led to a complaint by him and the removal by RTE of the podcast of the programme.  The alacrity with which Begg moved to defend his reputation can be compared to his apparent inactivity in ensuring the Central Bank performed all the roles it was responsible for and which he presumably was on its Board to ensure were discharged.

Anne has written a draft letter of complaint to RTE and has asked for signatures to a petition, both of which are set out below.

This episode highlights the need for a workers’ campaign to highlight the full truth of the banking collapse and hold all those guilty to account.  Not least the system itself.

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On Liveline 27th June I got the opportunity to speak about my reaction to the Anglo tapes. I mentioned the protests organised each Sunday by ‘Dublin says No’ and encouraged people to attend protests that are organized around the country by the ‘Say No’ campaigns. So listen in to a podcast for the item. It is the first on the play list. Overall it was a good programme and showed the anger people feel.

I mentioned a few issues. Firstly that in Feb 2009 a group of teachers picketed Anglo-Irish bank in protest against the bail out of the bankers/speculators and to show our anger at the massive cuts that were taking place in our schools and in public services. I said a group of us went into the bank briefly to ask workers to tell us the truth about the real state of the bank as we were supposed to own this bank yet we were not allowed to even know what was going on.

I mentioned that David Begg head of ICTU sat on the Audit Committee of the Central Bank during the most damaging years of the credit bubble. He had access to what was going on in the Central Bank and that Mr Begg knows the true story and should make a detailed statement of what went on. He was supposed to be representing our interests.  Either he was happy the way the Central Bank was fulfilling its obligation to oversee the banks or he was sleeping on the job and knew nothing. Either way he should RESIGN. Begg then should have acted like the whistleblower Edward Snowden today, and in that case we might not have the present devastation to our lives.

I also mentioned that at the time of the Anglo take-over public services were being massively cut; huge cuts in education, my area of work, in our pay and pensions and that at the time Waterford Crystal workers were occupying the company as it was closing but there was no rescue for them. Mr Begg did nothing to organize a national campaign to save a flagship company while the nest of thieves in Anglo was being bailed out by the organisation of which he was a leading figure.

I contrasted what had happened to 1913, when Dublin workers stood up against the employers. They were able to gain their dignity and build the trade union movement as a real force while today when we are being ground into the dust and the trade union leaders are committed to working within the injustice and tyranny of the Troika programme. I said it was time to stand up for our right for a civilized way of life for ourselves and our children and that people should come out and join the ‘Dublin says No’ to the Bailout protests. I commented on our small numbers and the thousands of Brazilians who were protesting on O’Connell St 2 weeks ago against corruption in Brazil. It was time for people to act for themselves.

I also said that the contracts of public sector workers were torn up and emergency legislation enacted to steal our pay while nothing is done to take the massive pensions off the politicians such as Bertie Ahern. He should be stripped of his pension and the assets of the perpetrators of the crimes against us seized.

Letter of Complaint to RTE

I wish to formally complain to RTE regarding the disclaimer statement carried at the beginning of the Liveline programme 28th June 2013. It stated that RTE accepted that comments on the Live Line programme of 27th June relating to ICTU General Secretary David Begg were wholly untrue and without foundation and we also accept that Mr Begg was never a member of the Banking Regulatory Authority. We want to make clear that there was no suggestion on Live Line part that David Begg  is or was responsible or aware of any of the wrongdoings of Anglo Irish Bank which he condemned in the strongest possible terms.

RTE in acting in the manner in which it has are neglecting their duty to deal with a perfectly legitimate call from me. They are curtailing an important discussion on the role of people who held senior positions on the Board of the Central Bank leading up to and during the nationalisation of Anglo. A major scandal has blown up regarding Anglo Irish Bank where we are learning day by day of the deeply scandalous behaviour of senior executives at the bank.

Mr Begg made his complaint on the narrow base that he was not a member of the Banking Regulatory authority but I made no reference in my comments on Live Line to this.   It is a matter of record that Mr Begg had a number of major responsibilities as a member of the Board of the Central Bank, of which he was a member between 1997 and 2011. These are outlined below and as such he should have been aware of what was going on in Anglo.

Report of the Central Bank and Financial Services Authority of Ireland for the year ended 31 December 2006

Board Procedures (Page 62)

The Board holds eleven regular meetings each year. A quorum of seven normally applies for all meetings. The Governor approves the agenda and papers, which are circulated to the Directors one week in advance of meetings. Additional Board meetings may be called by the Governor at short notice either on his own initiative or at the request of any two Directors.

The Secretary of the Bank keeps minutes of meetings.

The agenda for meetings typically includes:

_ Reports on monetary and financial developments;

_ Reports on various issues relating to the Irish economy, the European economy and the international economy;

_ Reports on regulatory developments to keep the Board informed on policy issues and where decisions by the Board are required;

_ Management of the investment assets of the Bank;

_ Substantial financial contracts to be placed by the Bank for the procurement of goods and services;

_ General management, planning and budgetary issues;

_ Quarterly and annual financial statements and results.

Board Sub-Committees

The Board established three sub-committees on 30 June 1994 as follows:

_ The Audit Committee; The Remuneration and Budget Committee; The Investments Committee.

Board regulations detail the terms of reference of each sub-committee and membership in each case is comprised of Directors — of whom one is appointed as Chairman — and a further member of the Regulatory Authority with observer status. The Secretary of the Bank, or a nominee, minutes all meetings of the subcommittees and, when approved, these minutes are circulated to the Board. The members of the sub-committees, as at 31 May 2007, were as follows:

The Audit Committee members; David Begg (Chair), Martin O’Donoghue, Deirdre Purcell*, Alan Ashe**

( *Members of both the Board and the Regulatory Authority. **Members of the Regulatory Authority who are not also members of the Board but who participate at meetings of the above CBFSAI Board committees with observer status.)

It is clear from the agendas of the meetings that the Board members had a responsibility in overseeing the state of the banks which would have included Anglo Irish Bank, the 3rd largest lender at that time.  It is inconceivable that Mr Begg was completely unaware of whether the Central Bank was fulfilling its obligation to oversee the banks considering the agenda of Board Meetings and also given that he was Chair of the Audit Committee.

As General Secretary of the ICTU he is expected to represent the interests of workers/ordinary tax payers and I called Liveline as a long time trade union member concerned at the devastating consequences of the bail out of Anglo and the shocking revelations in the tapes.

RTE as a public service broadcaster should be to the forefront in lifting the veil of secrecy that has surrounded the bail out of Anglo, instead it has in this instance censored an important discussion and is failing in its duty to investigate or allow discussion on how the members of the Board of the Central Bank have fulfilled their role the role.

The refusal to podcast the programme is a further example of failing in its duty

Furthermore the disclaimer statement is an attack on my integrity and the truthfulness of my contribution to the programme. As you can see from the above excerpt on the operation of the Central Bank, I did not stray from the facts surrounding Mr Begg’s role on the Board of the Central Bank.

I request a copy of the transcript of my comments on the Liveline programme as my good name has  been brought into question by the disclaimer.

I expect an apology for the aspersions cast on my character on national airwaves.

 

Statement condemning RTE censorship on the role of General Secretary of ICTU David Begg in his capacity as a Board member of the Central Bank

We the undersigned strongly condemn the censorship of discussion by RTE of comments and questions raised as to the role of the General Secretary of ICTU David Begg in his capacity as a board member of the Central Bank and chair of the audit committee of the Central Bank during the period covering the boom years and the subsequent collapse of the banking system.

This gross self censorship by RTE on these legitimate questions and the subsequent erasure of the podcast of the Liveline programme of 27th June 2013 is a shameful and disgraceful episode for RTE as national broadcaster.

The role of the ICTU in demanding a disclaimer on the narrow basis that David Begg was not on the regulatory authority, (a claim that was never made) is an issue of concern for trade union members and all those affected by the criminal activity within the banking sector.  The role of a senior member of the trade union movement in these catastrophic events should not be and cannot be censored.

Anglo-Irish bank tapes – a rotten bank in a rotten State

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swf+Anglo-Irish-BankRevelations by the ‘Irish Independent’ newspaper of taped telephone conversations between two senior Executives in the recently deceased Anglo-Irish Bank have aroused rage amongst a population already angry with bankers.

The expletive strewn – “we have to get the money in . . . get the fuckin’ money in, get it in” – and sometimes juvenile conversation – singing a comedy version of Deutschland Uber Allies – appears to show the two Executives planning to rope the Irish State, through the Central Bank, into bailing out Anglo to the tune of €7 billion, a number “picked out of my arse” as one Executive put it.  (The real figure proved to be over four times this amount!)

The cynicism and arrogance on display is summed up by their bragging that their losses are greater but that,  once hooked, the state will have to keep on paying  – “The reality is that, actually, we need more than that. But you know the strategy here is you pull them in, you get them to write a big cheque and they have to keep, they have to support their money” – while boasting that they would never pay it back.

On last nights’ ‘The Last Word’ radio programme the presenter Matt Cooper asked,in a tone of utter exasperation, whether this was a tipping point in the Irish population’s restrained reaction to the crisis, a crisis that has caused riots in other countries.   Would it lead to them . . . demanding a real inquiry into the banking crisis . . . because they needed someone to BLAME.  One of the interviewees however explained that inquiries are about finding out the facts.

The Government and opposition politicians have now rallied round a demand for another inquiry and the debate now will focus on what sort of inquiry will result.  Already however the call for an inquiry is being predicated on the view that the taped conversations demonstrate that the State was hoodwinked into bailing out the banks, particularly the exceptionally rotten Anglo-Irish.

I’m reminded of the words of the song from Alanis Morissette – “It’s the good advice that you just didn’t take. Who would’ve thought… it figures”.  That is because the State was not hoodwinked.  The State may well have been lied to, but the State turned round and lied to the Irish people.  Now the Irish State wants an inquiry, perhaps, all of five years afterwards so it can blame those already reviled and hated. This, so that it can continue to play the lead role in defending the banks and the economic system they sit upon.

The Irish State, its politicians and bureaucrats, claimed in September 2008 that the banking crisis was simply one of liquidity – the banks weren’t bust, they simply needed some cash to tide them over and then everything would be alright.  Basically the banks were solvent.

I claim no great powers of insight or clairvoyance when I say that I knew at the time that this was crap.  There were numerous voices, with no inside information, who knew it was crap and said so.  The inside information known to everyone that mattered would have proved it.  The Irish State was lying to save the bankers, the banks and the system.  This should not be a surprise for this is what the State is for.

And not just the local State, because the last five years have revealed that not only was it in support of bailing out banks that could not be saved but this was also the view of the European Union and the US Treasury.

Certainly, blame the banks for reckless and stupid lending but it was not the banks who made their debts the crippling burden on the people.  It took the State to do that.   Blaming the banks is a way of avoiding this, much harder to accept, reality.  Much harder to accept because we have just proved that you can change the government at the top of the State but you won’t change its role.  For the bleeding-heart liberals, and I include the leaders of the trade unions in this, this is especially a problem because the State is their only hope of making things better.

But there is an even more important reason to agree with the interviewee in the Today FM programme: that the point is to understand.  And what we have to understand is that the Irish bankers were not the only bankers to indulge in reckless lending.  It happened in the US, in Spain, in the UK and many other places right across the world.  It is happening in China today.  Criminal speculation is an inevitable part of economic booms under capitalism and cycles of boom and bust are an inevitable part of capitalism.

Blaming excessive credit expansion is fine, except that such expansion is inevitable in a boom – the bigger the boom the bigger the expansion of credit.  The problem is the system that makes credit expansion necessary.  No amount of regulation in a boom will prevent it.  New financial products, such as derivatives, or new institutions, such as a shadow banking system, are inevitable in a system defined by private property in the means of producing the wherewithal to live.   Blame greed – ok, but what other social pathology makes sense in the current economic system?  Blame the politicians – but how is the state to function without funding from the finance system?

In any new inquiry we will be invited to blame individuals, to which the implied answer is – ‘lock them up’, more power to the state, and individual banks, to which the answer is – ‘close them down’, when the real solution is to dismantle the economic system that makes such events inevitable.  Anglo will be made the focus of attention and held up as a rogue bank but Allied Irish cost almost as much and Irish Nationwide appears to have been even more rotten, however hard that may be to believe.

This view that the core and fundamental problem is the economic system and that the financial crisis and all its consequences are a result of it is not widely shared.  Yet the crisis demonstrates this dramatically.  Understanding this is an important and vital step to putting things right.  It is obvious that no State-backed inquiry could arrive at such conclusions.  We have had inquiries already which have been more soporific than enlightening.  That means the opportunity and necessity exists for the working class, or part of its movement, to launch their own inquiry to demonstrate the truthfulness of these claims.

Trade unionists should demand the unions launch their own inquiry.  The Left should campaign for this and if this fails it should launch its own inquiry, inviting evidence from workers in the banks and from left economists who can set out the mechanisms by which capitalism inevitably produces such crises.  An open forum of hearings and invitations to give evidence could provide the platform to educate workers and ourselves.  It might also invite proposals for alternatives.

In this respect the Left would do well to ponder the lessons to be derived from one part of the taped conversations.  In one recording, a Mr Bowe and another senior executive of Anglo, Peter Fitzgerald, are heard laughing about the prospect of nationalisation. They see it as “fantastic” and are delighted at the prospect of becoming civil servants.  This, of course, is exactly what happened. Why then would nationalisation be proposed by people calling themselves socialist?

G8: The Mafia Empire Part 2

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obama in sunglasses

By Belfast Plebian

In 1967 LIFE Magazine published an exposé on organized crime in America. FBI Director J. Edgar Hoover admitted publicly for the first time that the Mafia did in fact exist and that the Gambino and Genovese families exercised ironclad control over the Waterfront Unions in New York and New Jersey.  Director Hoover had for thirty years refused to publicly acknowledge that the Mafia existed, his conviction was that organised labour in America had much more to fear from Communist and Socialist control than from mobsters. President Nixon stayed true to the FBI spirit when he commuted the jail sentence of Teamster President and Mafia candidate Jimmy Hoffa.

It is now part of common folklore that workers’ unions in the United States were often controlled by Mafia figures, films such as on the Waterfront have confirmed the idea . However what is less well know is the fact that Mafia figures were often encouraged by the spooks and right wing politicians to take control of the labour unions, indeed it is in this division of social life that they came together on mutual terms.  In July 1936 Luck Luciano was sentenced to 30 to 50 years in Sing Sing Correctional Facility. In 1942 the US government struck a deal with him, in return for a commutation of his sentence his union agents would monitor subversive activity on the docks on behalf of naval intelligence.  Here’s a report from a more recent study of the special relationship between the Mafia bosses and the right wing political bosses: 

‘Among the most unusual Federal Prosecutions during the 1980s were the weapons trafficking and murder solicitation trials of a rogue retired Officer of the U. S. Intelligence community, Ed Wilson.  As detailed in Peter Maas’ book MANHUNT, Ed Wilson’s career offered a rare glimpse into the interactions between the CIA and the labour union movement.  Recruited by the CIA while in college back in the dark days of the Cold War, the CIA first sent Wilson through the School for Industrial and Labour Relations at Cornell University in New York City.  After graduation Wilson convinced Paul Hall, the President of the International Seafarers Union to hire him as an Organizer. Hall sent Wilson to Belgium, where Wilson infiltrated the Communists involved in the Union movement and performed various ‘dirty tricks’ against Labour leaders. Wilson then returned to the United States where he obtained work in the International Department of the A.F.L. – C.I.O. Wilson’s biographer relates that while the Seafarers were not aware that Wilson was in fact working for the CIA, the AFL-CIO was aware. This organization has long maintained close ties to the U. S. Intelligence community and to this day labour activists in the United States will jokingly refer to this organization as the ‘AFL-CIA!’ The AFL-CIO then sent Wilson to Latin America to infiltrate the various Communist-dominated labour Unions.

The only point I am making here is that the labour unions are penetrated and controlled much more comprehensively by all sorts of political gangsters than from mobsters, entire union federations have been lost to independent workers. 

Next we come to violence and murder. Let’s compare G8 leader Obama with the very worst of the Mafia killers, Louis ‘Lepke’ Buchalter. Who the heck was he you ask?  Well he was another close associate of Lucky Luciano who back in the day controlled the garment unions of New York.  In the 1930’s Lepke was a pioneer labour racketeer and he wasn’t even Italian, he was in fact Jewish. What made Luciano stand out from the other mobsters was that he wasn’t a nationalist, he learnt his trade from New York’s Jewish mobsters especially Arnold the brain Rothstein and many of his long time friends Frank Costello and Meyer Lansky, who were also Jews. It was this willingness to associate with mobsters from outside of the Sicilian-Italian community that set him on a collision course with the traditional Bosses like Joe Masseria and Salvatore Maranzano.  Since all of the G8 leaders come to Fermanagh acting solely on the so called national interest, they walk at least one step behind the more open minded crime boss.

Lepke had another string to his bow apart from labour racketeering – hiring mobsters that he knew to kill people on contract.  In the early 1930s, Buchalter joined Charles “Lucky” Luciano and other Mob bosses to form the “National crime syndicate”.  Luciano’s associates Benjamin “Bugsy” Siegel and Meyer Lansky formed Murder Incorporated a name applied to them by the media when the first court cases came to light. Originally a band of killers, they were used to fulfil many non-Mob related contract killings. Buchalter and his partner, Albert “the Executioner” Anastasia would take control over Murder Inc. when Siegel and Lansky’s business endeavours became respectable. Buchalter was responsible for contract killings throughout the country, including the killing of the Mob hit man and bootlegger Dutch Schultz.

In 1935, law enforcement estimated that Buchalter and Shapiro had 250 assassins working for them, and Buchalter was grossing over $1 million per year in profit. They controlled rackets in the trucking, baking, and garment industries throughout New York. It is believed the corporate Jewish killers may have killed nearly a thousand people on contract before they were stopped.  The killers were put on a retainer fee and paid an extra $5,000 when the job was done; the most prolific of them Harry Pittsburg Phil Strauss notched up over a hundred burns. If the killers were caught the best Jewish lawyers, money could buy would represent them, and their families were looked after.

Their most famous hit was on one of their own; Dutch Schultz was planning to bump off special prosecutor and later to become a Presidential candidate Thomas E Dewey. The crime syndicate decided that Dutch needed to be taken care of as he was just so reckless.  Lepke the best organiser of Murder Incorporated was eventually caught and executed in Sing Sing prison  in March 1944.

Now this is all very serious stuff but in terms of well-organised killing it is still small-scale stuff.

Obama is openly referred to, even in a few of the mainstream media outlets, as the drone killer, the assassination President, and the police surveillance President.  One person who’s been working hard to expose what he has been sanctioning is investigative journalist Jeremy Scahill, a long-time war correspondent for the Nation and the writer, producer of the startling new film “Dirty Wars,” which hits the cinemas in America just this week. “Dirty Wars” documents Scahill’s exploration of the campaign of drone strikes outside the recognized battle zone, in countries like Pakistan, Yemen and Somalia.  He also found, after digging, the existence of the secret military strike force called the Joint Special Operations Command, or JSOC, which literally became famous overnight after the killing of Osama bin Laden.

He says ‘because Obama is who he is, an incredibly brilliant man who has the trust of the overwhelming majority of liberals — and probably a significant number of traditional conservatives, at least on these issues — he is going to go down in history as creating a systematized embrace of assassination as a central component of U.S. security policy. It’s not that the U.S. hasn’t been engaged in assassination basically from the beginning, but we now have this Nobel Peace Prize-winning transformational president, who is a constitutional lawyer, making it a permanent part of the national security infrastructure. While saying, ‘We don’t want a perpetual state of war,’ he’s building the machinery for a perpetual state of war.”

Here’s an exasperated review of a segment of the new film by journalist Andrew O Hehir  ‘Scahill’s film also spends quite a bit of time exploring the story of Anwar al-Awlaki the radical imam who was born in Las Cruces, N.M., and killed by a drone strike in Yemen in 2011. (His teenage son Abdulrahman, also a U.S. citizen, was later killed, apparently by accident or as collateral damage.) While the moral and legal quandaries posed by killing an American citizen without any pretence of due process have been much discussed – and we may never know exactly why the Obama administration deemed Awlaki such an imminent threat as to merit summary execution – “Dirty Wars” reminded me of the larger and more disturbing narrative that led up to that drone attack in the desert. In the immediate aftermath of the 9/11 attacks, Awlaki, who was then the imam of a Washington-area mosque, frequently appeared in the media as a voice of moderate Islam. He spoke out against terrorism, decried the 9/11 hijackers as Muslim renegades and was invited to speak at the Pentagon on the role of Islam in the contemporary world. The lunch menu that day, Scahill says, included bacon sandwiches. “Which gives you a sense of how awesome the Pentagon’s intelligence was? You invite an imam to come and speak about Islam, and you offer him a bacon sandwich.”

I am not going to pursue the Obama and murder theme any further, if you still need to be convinced, try watching the film ‘Dirty Wars.’

I think I have done enough to show there is a correspondence between the wicked ways of the Mafia Bosses and the self serving ways of the current crop of Political Bosses currently meeting as the G8 in Fermanagh.  I never claimed that they were identical and I would have to admit that the Political Bosses often have to face more complex dilemmas.  There is a serious case for the justification of Machiavellian politics which states that it is much easier for an ordinary person to refrain from doing bad things than it is for a Political Boss to do so.  This implies that a Mafia Boss can simply decide to abide by the law without prejudice to themselves while a Political Boss has no such luxury, if he did he might well bring a heap of trouble onto the citizens of his country.

The natural circumstance of politics is so extreme that the breaking of every moral convention and constitutional law is a sort of fait accompli for every potential the Political Boss. If you can’t stand the heat don’t even get into the kitchen.

Machiavelli is the political philosopher most often associated with training the political bosses to think and act in away that is incompatible with ordinary decency.  Leo Strauss once said he was inclined to the view that Machiavelli was a teacher of evil. This is what he said :

“What other description would fit a man who teaches lessons like these: princes ought to exterminate the families of rulers whose territory they wish to possess securely; princes ought to murder their opponents rather than to confiscate their property since those who have been robbed, but not those who are dead, can think of revenge, men forget the murder of their fathers sooner than the loss of their patrimony; true liberality  consists in being stingy with one’s own property and in being generous with what belongs to others; not virtue but the prudent use of virtue and vice leads to happiness; injuries ought all to be done together so that, being tasted less, they will hurt less, while benefits ought to be conferred little by little, so that they will be felt more strongly; a victorious general who fears that his prince might not reward him properly, may punish him for his anticipated ingratitude by raising the flag of rebellion; if one has to choose between inflicting severe injuries and inflicting light injuries one ought to inflict severe injuries; one ought not to say to someone whom one wants to kill ‘give me your gun, I want to kill you with it’ but merely, ‘give me your gun’ for once you have the gun in your hand, you can satisfy your desire. If it is true that only an evil man will stoop to teach maxims of public and private gangsterism, we are forced to say that Machiavelli was an evil man.” 

We will take it as evident that the political designation ‘Prince’ has wider application than just to a traditional Monarchy – it can refer to States, Heads of States, political parties, heads of political parties and so forth.  The Italian Marxist Gramsci sometimes abbreviated the revolutionary workers party with the designation Prince in his prison writing. In the same study above Professor Strauss referred to the modern alternative to the Politics of the Prince. He quotes Thomas Paine : ‘The Independence of America was accompanied by a revolution in the principles and practice of  Governments…Government founded on a moral theory, on a system of universal peace, on the hereditary Rights of Man, is now revolving from west to east by a stronger impulse than the Government of the sword revolved from east to west.’( Thomas Paine Rights of Man second introduction) 

Professor Strauss seems to be indicating that the new Democracy of America was founded on the basis of a moral and political law that had no room for Machiavellian style dirty politics. The politics of the new democracies were intended to be different from the Roman politics Machiavelli had studied. The G8 seems to point to a higher standard by excluding China, the second economy of the world from their deliberations presumably on the basis that it is not a democratic State.

Professor Strauss is famous for refuting what he called historicist accounts of political and social thought. What he meant by that was the thesis that the political philosophy of a certain historical period was necessarily bound to that period, so much so that it was an expression of it. So the harshness of Machiavelli political philosophy was merely a reflex of the division of Italy into warring city States and foreign kingdoms.  The political thought of Thomas Paine was a reflex of a middle class capitalist development and the political thought of Karl Marx was just a reflex of the early exploitative industrial capitalism of the nineteenth century.

He thought of political philosophy in terms of permanent alternatives rather than passing ideologies always to be superseded by historical change, and he thought of Machiavelli politics as one permanent alternative that could rise up in any era.  He thought of Marxism in terms of historicism and argued it was self- refuting because it predicted its own passing away due to necessary historical change.  How he asked could Marxist thought still claim to be relevant when the nineteenth century conditions that produced the ideas of Karl Marx no longer existed nearly 150 later

We will not seek to rule on Marxism and historicism here but suffice to say that we don’t think Machiavellian or its alternative Marxist politics has been superseded by necessary historical developments.  Machiavelli belongs to the long history of capitalism that includes the Italy of the city state and the merchant capitalism that originated in these very City States.  The politics of imperialism are linked by the capitalist economy so private and public gangster politics are as relevant now as they were in Michiavelli’s time.

G8: The Mafia Empire Part 1

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putin in glasses

by Belfast Plebian

‘We shall not shock anyone, we shall merely expose ourselves to good-natured or at any rate harmless ridicule, if we profess ourselves inclined to the old fashioned and simple opinion according to which Machiavelli was a teacher of evil.’ Leo Strauss

 

The wiseguys are again meeting at a secluded location, not at the Apalachin retreat in upstate New York as depicted in the Godfather movie, they did that one back in 1957, but at a lakeside hotel in Fermanagh. The world’s most feared political gangsters are holding two days of much needed sorting out talks, for their dark mutterings and latent rivalries have reached a point of near breakdown in diplomacy. The quarrels between them have become so heated that they imply in an undeclared war over the future of Syria and beyond that you can see through in the ongoing currency war between them.

It is my contention that there is a strong correspondence between the politics of the G8 and the Mafia politics of the recent past.  When I say correspondence I do not mean identity.

The political gangsters of today are therefore obliged to acknowledge a debt to the late great mafia boss Salvatore Luciano, the mobster who dreamt up the idea of a Mafia Commission to settle intense quarrels over criminal opportunities. Lucky Luciano established the Mafia Commission in 1931, a corporate body to mitigate the violent disagreements among the warring crime gangs.  Luciano wanted to end the chaos that had led to a bloody and self -destructive gang war in New York and Chicago during the 1920s. In 1925 he was grossing over 12 million dollars a year and had a net income of around 4 million dollars after the cost of bribing the politicians, judges and police was deducted.

But his private fortune was put in jeopardy by the intense gang rivalries, which escalated into a fierce street battle known as the Castellammarese War, that raged from 1928 to 1931 and resulted in the deaths of at least 60 top mobsters. So he looked for a way to lessen the strife and violence and found it in the Commission, a corporate body that has endured for over seventy years.

Lucanio did not want to be an Italian- American Caesar. He realised that the best way for him to stay alive and rich was to let the most powerful crime families run there own internal affairs, but establish an administration to settle their differences and to mobilise enough combined muscle to crush any new rivals. He established a mob board of directors known as the Commission to oversee all criminal and business activities and to mediate strife between the contending families. It was to meet every five years and its decisions were non-negotiable.

The Commission officially comprised seven crime families; the heads of the New York five plus, the Chicago Outfit of Al Capone and the Buffalo based crime family led by Stefano Magaddino. The Commission did not stop all gang warfare, but it did reduce the number and scale of them; when one gang transgressed against another it would often find itself at war with all the rest. There was no single ruler of the Commission, but there was a nominated chairman who was oath honoured to stand for the common good.

The Commission largely succeeded, for what we find is that while the personnel of the ‘FAMILIES’ frequently changed, over time the same crime families stayed on top of the underworld from then until today: The Bonanno crime family, the Colombo crime family, the Gambino crime family, the Genovese crime family, the Lucchese crime family, the Philadelphia crime family and finally Al Capone’s Chicago outfit.  They established a better capitalist crime model for themselves than the current rather shaky G8 one and it is the reason why Time Magazine once called Lucky Luciano one of the most influential Americans of the twentieth century.

“I learned too late that you need just a good brain to make a crooked million as an honest million. These days you just apply for a license to steal from the public. If I had my time again I’d make sure I got my license first.”  Lucky Luciano.

The G8 – the people who got  the licence first.

If you succeed in politics you can usually surpass anything a Crime Family Boss can do in almost every division of life including killing and enriching yourself at the cost of others. Take Tony Blair for example.  Everyone knows about his illegal and immoral acts of killing, but what of his wealth? Here is a report just picked up from reading yesterday’s newspaper (Daily Mail Saturday 15, 2013). Depending on how you cut it Blair is now worth £60 million or £80 million.  He has set up a Byzantine network of inter-related companies to funnel his vast tribute for being a useful Prime Minister. Useful for whom you might ask, well useful for the Banksters.

His first tribute after leaving office came from the world’s leading investment bank JP Morgan Chase.  He has been a senior adviser for the last five years on a £2.5 million salary and his preferred mode of transport these days is a rented Gulf Stream V private jet. He says he was able to facilitate the bank’s clients due to high-level political contacts made with the Rwanda government when he was Prime Minister. The former PM has also done a deal to promote the dodgy government of Kazakhstan, he apparently gives it advice on good governance and this has already netted him £16 million

He has been receiving £1 million a year for advising the Abu Dhabi sovereign wealth fund where it is safe to invest their oil money. He is said to be as thick as thieves with the super rich Sheikh Hamad bin Jassim bin Jaber al Thani, the PM of Qatar. One of his other rewards for once holding political office came from the Kingdom of Kuwait – this netted him a swell £27million and his think tank was asked to produce a report on the future of the Kingdom called Kuwait Vision 2035.

There is plenty more of that sort of stuff in the newspaper article. Tony Blair is an example of a political mobster of the very successful type. The thing that makes these ‘democrats’ different is that they have to wait to leave political office before collecting the readies rather than taking it while they are in office, say like ‘oligarchs’ like President Putin, another of the G8 stars.

President Putin officially lists his salary at 5.8 million rubles, about $190,000  a good deal less than Obama’s official salary of $400,000.  He also claims that he has very little personal wealth.  During his election campaign he claimed he had $180.000 in his bank account, owned three Russian made cars and a small apartment in Moscow, so a lot less than Obama’s personal wealth estimate of $12million.

Here is an independent assessment of his personal wealth made by a celebrity magazine:

‘So what evidence is there of Putin’s secret obscene fortune? Let’s start with the small stuff. Putin is known to sport a $150,000 Patek Philippe watch on most occasions and his total collection has been valued at at $700,000.  He also has full access to a $40 million ultra luxury yacht that features a wine cellar, Jacuzzi, helipad and outdoor barbecue area   In terms of living accommodations, Putin has access to 20 mansions throughout the world including a lavish ski lodge and Medieval castle.  The crown jewel of his property portfolio is a $1 billion palace overlooking the Black Sea that he allegedly owns through an anonymous trust.  Furthermore, Putin makes frequent use of 15 Presidential helicopters and more than 40 private jets, many of which feature gold plated interiors . If Vladimir Putin’s net worth truly sits at $70 billion, that would be enough to make him the second richest person on the planet right behind Carlos Slim Helu. It would likely also represent one of the largest personal fortunes ever accumulated by a sitting President. The only other world leader who possibly looted more cash from his country was Muammar Gaddafi who after 40 years of power stashed away a reported $200 billion in ill-gotten oil money.’

It might of course be argued that Tony Blair is a rogue politician, that the Heads of States of our Democracies are usually very different from him and therefore different from the Bosses of the Mafia Families. Yet ex-President Clinton has trousered a lot more tribute than Tony Blair and Obama will certainly get filthy rich when he finally hangs his coat up on the White House door.

Some of our more notorious mobsters believe they have a good handle on the entire thing. Here are a few quotes from Al Capone about living in the world’s purest democracy.  Al didn’t ever get too caught up in the whole democracy thing ‘capitalism is just the legitimate racket of the ruling class’. . . ‘This American system ofours, call it what you will, gives each and every one of us a great opportunity if only we seize it withboth hands and make the most it’. The mobsters can never fathom how they are doing anything different from the politicians and that often is their weakness, the bankers and lawyers of the democracies get the law on their side before they commit the crimes, or if they do the crime without the assistance of the law they get the politicians to amend the law to make sure they avoid the normal consequences of the law.

In every episode of the Max Keiser show on Russia Today evidence is produced to demonstrate how the law is broken and amended to help the financial criminal elite of Wall Street and the City of London. In March of this year a US Senate committee compiled a 300 page report documenting the fraudulent and criminal practices sanctioned by Mr Blair’s favourite bank and the largest dealer in derivatives trading in the world.  Despite all the evidence, no legal action was deemed appropriate, and the CEO Jamie Dimon remains a Consigliere to the President concerning the financial markets.

The late John Gotti was once the Boss of the powerful Gambino family.  is advice to the young included the following: ‘be nice to the bankers. Always be nice to the pension fund managers. Always be nice to the media. In that particular order.’  The Mafia ‘philosophy of self enrichment without conscience’ is perfectly suited to the present condition of finance-dominated capitalism.  It is certainly difficult to spot the difference between what the law calls loan sharking and current legal lending.

The loan shark figures a lot in Mafia books and films, the person or business that offers loans at extremely high interest rates and the smaller the loan the more onerous the repayments. In the early days of Mafia loan sharking it was confined to payday lending on potential wages with most of the customers being office clerks and factory workers. The 1952 film ‘Loan Shark’, featuring mobster favourite George Raft, depicts the whole payday loan racket.

In the 1960s the Mob shifted their loansharking to small businesses as they had assets that could be confiscated if payment was overdue. The irony is that the Mafia historians tell us that payday lending to workers largely disappeared by the 1970s.  Now of course they are back with the sanction of the law and the backing of the politicians. In Britain the Campaign group Debt on our Doorstep campaigns against the practice, if you are interested go to their web site for some horrific stories.

One of the big players in the payday loan racket is Wonga, the sponsor of Blackpool football club.  Last year it declared £45million in profit, by advancing over 4million loans. The annual interest rate on its payday loan is 4,214 percent.  One of Wonga’s main stockholders is Dawn Capital, whose chairman is called Adrian Beecroft who is a donor to the Conservative party.  The Prime Minister David Cameron asked his friend Mr Beecroft to prepare a report on the future of employment law and he recommended that employers be given the right under the law to sack workers at will and without explanation.  The oily rag PM liked the idea but the Liberals thought it was a bit strong for now so it did not become law. Once again the immoral activities of the Mafia mobsters have been superseded by the legal activities of the political gangsters.

Lets move on to tax. The Mafia bosses never like to pay tax, they are very much in the low tax political camp. This brings us to Al Capone; in 1927 it is estimated he made about $100 million, the equivalent of about $1.2 BILLION today.  Despite his profession the authorities could never pin a serious crime on him with the Treasury Department attributing this to his ‘natural Italian secretiveness.’  He was maybe helped by the fact that no witnesses would testify against him, but the main reason was he was generous with his money.  It is estimated he spent over $30 million in 1927 on gifts to politicians, judges and police chiefs.

Al Capone was eventually convicted and sent down because he was a tax evader, yet how was this conviction lawful?  Capone had this to say: ‘the income tax law is a load of bunk. Thegovernment can’t collect legal taxes from illegal money.’  When he was sent down it was the toughest sentence ever imposed on a tax evader. Capone told the newspaper guys: ‘I’ve been made an issue, I guess I’m not complaining. But why don’t they go after all of those bankers who stole the savings of thousands of poor people and lost them in bank failures? How about that?  Isn’t it a lot worse to take the last few dollars some family has saved-perhaps to live on while the head of the family is out of a job-than to sell a little beer.’ 

This of course is an example of trying to get the victims of the capitalist system on to your side when you have just become undone and disgraced politicians frequently play this populist card, nevertheless we appreciate the point. Many respectable people got rich during the prohibition era by selling alcohol as a legal medicine.  The fine novel ‘The Great Gatsby’ is a fictional account of a legal medicinal bootlegger. The father of the Kennedy political dynasty held such a licence and he used it to stock his warehouses in the period just before the end of prohibition.

But what about tax evasion and tax avoidance?  Davis Cameron says this is to be one of the big-ticket items on the agenda of the G8 summit. He claims he wants to see companies pay their fair share in tax but he doesn’t try to define fair. One can just imagine him raising the matter at the G8 to the annoyance of the French President.  Here is what he had to say one year ago to the very day: “If the French go ahead with a 75% top rate of tax we will roll out the red carpet and welcome more French businesses to Britain and they will pay taxes in Britain and that will pay for our health service, and our schools and everything else.”

Let’s now add a little bit more beef to his speech from the G20 meeting in Mexico 2012: “Every country sets its own tax rates, but I think in a world of global capital, in a world where we’re competing with each other, in a world where we want to send a message that we want you to build businesses, grow businesses and invest, I think it’s wrong to have completely uncompetitive top rates of tax.”  The oily rag PM is just playing with the public over tax.

Consider this snippet from a recent white paper covering the status of the UK oversees territories: the UK’s parliament has “unlimited power to legislate for all its overseas territories and crown dependencies”.  He is putting on a show as if to say all he can do is try to persuade Bermuda, Cayman Islands and the Channel Islands etc to play fair on tax, when he could command them to do so.  They will of course carry on as before and Cameron will stand back and shrug his shoulders. You should not be fooled into thinking that the British government is responding to the campaigns of the NGO’s to make tax on companies into a social issue.  What he is defending Britain from is criticism from the other G8 political leaders, especially that coming out of the Congress in Washington who think the political class in Britain have effectively turned the country into one big Tax Haven to the detriment of Uncle Sam and others. 

The G8 comes to Northern Ireland

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DSC_0394The leaders of the G8 group of the wealthiest countries are meeting this week in rural County Fermanagh.  That some of the most powerful political leaders on the planet are visiting us is yet again another opportunity to demand of the local population the most obsequious and embarrassing homage to our betters.  Deference normally required only for royalty.  A columnist in a local paper reported that claims had been made that the visit would boost the local economy by something like £700 million, a figure so outlandish it does not even deserve ridicule.  More sober estimates have come in at less than £100 million but if the experience of Scotland is any guide the costs will easily exceed this and today I saw first-hand evidence that this will indeed be the case.

As is usual the media have been on overdrive to sell how wonderful this all is, normally in some vague and unspecified way, for example ‘it puts us on the map’, as if we weren’t already on it, and it gives us the opportunity to sell Northern Ireland. How often can you sell something that never gets bought?  It was the occasion for yet another economic package, announced by David Cameron, Peter Robinson and Martin McGuinness.  But again it was déjà vu all over again.

The local Executive, it was announced, will be able to borrow an additional £100m for capital projects for shared housing for example.  But the Executive has just confirmed that it is incapable of providing shared housing through its handling of the old Girdwood British Army base in North Belfast.

And no one will be able to tell you what golden opportunities were being missed until now by absence of this money .

More measures to boost lending to business was promised but it has been reported in the financial press that the ConDem coalition has totally failed in its attempts to achieve this goal with its own schemes in Britain.  Borrowing just when bond yields are rising across the globe, even after countries have printed money like never before – heralding an end the recent era of low interest rates and an interest rate rise that may have devastating economic consequences – does not look the cleverest policy in terms of timing.  Projects to be financially profitable will have a higher hurdle to jump over than before.

More peace money is promised while the local paper’s front page reported this week that there had been  a 25 per cent increase in paramilitary intimidation; sanctioned by the local police who have approved the loyalist UVF’s marking of territory in East Belfast by their flying of their paramilitary flags on anything that doesn’t move.  Meanwhile the DUP and Sinn Fein leaders hatch an £80m slush fund for these same paramilitaries.

We are promised yet another investment conference while having witnessed the utter failure of previous ones and most recently been treated to the farce of Peter Robinson and Martin McGuinness’s ‘investment-promoting’ visits to China and Brazil. Again we are promised another look at devolution of powers to reduce corporation tax as if a different result might be expected.  The example of the Republic across the border should demonstrate even to the terminally stupid that low corporation tax is perfectly compatible with bankruptcy.

It is simply impossible for anyone with any appreciation of recent events not to be cynical because no matter how jaundiced a view one takes of this event it is exceeded by the malignant contempt shown by the visiting leaders and their local satraps.

Obama has sanctioned spying powers that make George Orwell’s 1984 look like a photograph of the future and he approves drone attacks that murder dozens if not hundreds of civilians.  We have Russia’s Vladimir Putin whose wars in the Caucuses have involved utter devastation on an enormous scale. Then we have the Japanese, attempting to lay the foundation for a new nationalist militarism by rewriting its murderous imperial history. These are the leaders we are asked to welcome as if we are blessed to breathe the same air.

But reality intrudes and the real character of their visit is revealed by the security clamp-down that looks like and feels like a police state. Roads in Fermanagh have been blocked for a month, causing problems for small businesses in the area, while young people doing their year-end exams have been told to get to school at an unearthly hour to do them.  Fences have been built and thousands of security personnel brought in.  Belfast city centre on Monday morning looks like it is to be closed down.  Sixteen miles of the M2 motorway into the city is also to be closed so that Obama can speak at the Waterfront Hall in praise of the peace process that never ends and never ends promising the end of strife.  Government workers have been told by email that they may have difficulty getting to work but should therefore plan to travel longer, get in earlier and leave later – section 3.11 of Annex 2 paragraph 4.1 of the HR policy is referenced.  With no hint of irony the responsibility to maintain services to the public is repeated.

The reality of the visit is revealed by the fresh painting over of empty shops in the county town of Enniskillen to make them look like they are open and full of people. Oh, and the hotel complex the meeting is in isn’t really in administration, not being a casualty of the Irish property boom.  The plan is obviously that the hype will cover up the reality and, well, if it doesn’t, we’ll be outa here soon anyway.

Holding the G8 in Northern Ireland was seen as a bold step.  Wasn’t this the scene of decades of trouble and didn’t the G8 risk occasioning more?  Hadn’t previous summits been the cause of widespread protest wherever they were held?

Well today, Saturday, was to be evidence of the scale of the opposition to the G8 leaders and their crimes.  A demonstration had been called by trade union leaders and assorted NGOs.

Unfortunately this opposition proved that it wanted to show, not that a different world was possible, but that a slightly different world would be nice.  The hype of the G8 cheerleaders was replicated in the ICTU Northern Ireland Committee’s leaflet, which promised ‘what is sure to be one of the largest mass mobilisations of peoplepower Belfast has seen.’   The demo was in fact no more than 2,000 people – maximum – and not much different than the usual May Day demonstration.  The annual 12 July Orange bigot-fest is many times larger.  The slogan of the demonstration that ‘they are G8 – we are 7 billion’ looked very hollow. Belfast City centre was unusually quiet.  The alternative of having the demonstration through some working class areas would never have crossed anyone’s mind, certainly not that of the trade union leaders.

As I walked the less than half mile to the demonstration starting point through Belfast city centre I must have passed about 70 police land rovers, and that was just on the route that I took.  Most of the coppers were English – they looked like they weren’t natives and were very much more po-faced than the local cops, despite the overtime.  There were hundreds of them.  A bigger case of over-kill it would be hard to imagine.  It might even be embarrassing for their top brass, were the media to make anything of this OTT display of the state’s repressive power.  This was a demo called by ICTU for god’s sake!

This is the same ICTU that has for years either been in partnership with the state, as in the South, or seeking partnership, in the North.  Its leader was a member of the Southern State’s Central Bank, the Regulator that allowed the ‘wild west’ financial system to accumulate so much debt it bankrupted the country.  This is the trade union movement responsible for the Irish being renowned throughout Europe for their ability to accept austerity that has caused riots in Greece, Spain and Portugal.  It wants a ‘better and fairer way’ to inflict the pain of austerity.  It doesn’t actually want to overthrow capitalism and socialism was not a word I heard at the rally at the end of the demonstration.

DSC_0416 Instead the speeches were declarations of opposition to bad things and support for good things and appeals to moral values such as fairness and justice.  Unfortunately the world is only as fair and a just as we can make it and in the meantime it is as just and as fair as the capitalist class considers it should be based on how it defines both.

What was missing was any strategy to change this situation and any agency that could enact this strategy.  What we were left with were appeals to the governments against whom we were actually demonstrating; appeals to the same states whose job it is to defend the system, not change it – the same state that put on show such a massive show of force to justify its hyping up of dire threats of violence.

As I and my friend left the rally and went into Boots for a short cut my friend was told to take down his hood – it had been pouring down for hours.  An older woman with grey hair was also told to take down her hood although she demanded to know why?  Was she hiding her identity so she could trash capitalism and then run into the street and avoid the hundreds of cops outside?  (Most of the bigger shops had massively increased security on their doors, another example of the hype surrounding the visit of the leaders of the ‘free’ world.)

One footnote: the rally outside the City Hall at the end of the demonstration was jeered and heckled by a group of perhaps 50 loyalists from the Shankill Road who were continuing their own protest against the butchers’ apron no longer being flown 365 days a year.  Ironically it was flying today, it being a ‘designated day’ because it was the Queen’s birthday – she has two don’t you know. These reactionary bigots sang sectarian songs including the ‘Billy Boys’, i.e. they were ‘up to their necks in fenian blood’ – a favourite of supporters of the now deceased football club Glasgow Rangers.  They waved the Israeli flag when the Palestinian cause was mentioned, booed loudly when the ‘Irish trade union movement’ was referenced and jeered when Derry was called Derry.

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For some on the left being anti-sectarian means pretending that Irish nationalism is just as sectarian as loyalism and there exists by definition a sectarian equals sign between the political expressions of the catholic population and the Protestant one.  That, in my 35 years of political demonstrations, I have never come across contingents of loyalists on trade union and socialist demonstrations while republican contingents, just as they were today, are commonplace and unremarkable, might therefore seem strange.  If I believed what some of the Left do this fact would be inexplicable. The loyalists however know they are reactionary and today they knew that they hated those on the demonstration.  They felt safe in the knowledge that the demonstrators were either ‘fenians’ or, even worse, ‘rotten prods’.

One other footnote:  there was no Sinn Fein contingent on the demonstration.  Even a few years ago they would have sent a youth contingent to keep up pretence of some radical credentials.  Now instead they parade the hope of corporation tax cuts and multinational investment beside the DUP and a British Tory prime minister announcing imperialist intervention in yet another country, this time Syria.  Their non-participation is one welcome clarification of what was otherwise unfortunately not much more than an exhibition of weakness before power.

Workers’ control of production

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rr06[1]In my review of the programme put forward by the left in Ireland, generally no different from other countries across Europe and further afield, I have argued that while it may be better for workers than the current austerity policies it is not socialist.  By this I mean that it does not involve a class alternative, an alternative to capitalism, one that involves ownership of the means of production moving to the working class.

Only in one area is this not the case: the Left’s occasional demand for workers’ control.  Even in these cases I have argued that the proposals are not put forward within any real practical perspective but put forward in such a way that they must assume a near revolutionary situation.  Demands for widespread workers’ control are only a practical proposition in such circumstances.

In current conditions demands for workers’ control simply demonstrate a lack of seriousness by those proposing them.  In the article by Trotsky previously quoted, he states that “before this highly responsible fighting slogan is raised, the situation must be read well and the ground prepared. We must begin from below, from the factory, from the workshop.”

This is to be done by revolutionaries gauging the moods of other workers – “to what extent they would be ready to accept the demand to abrogate business secrecy and to establish workers’ control of production. . . . Only in the course of this preparatory work, that is the degree of success, can (we) show at what moment the party can pass over from propaganda to further agitation and to direct practical action under the slogan of workers’ control.”

“It is a question in the first period of propaganda for the correct principled way of putting the question and at the same time of the study of the concrete conditions of the struggle for workers’ control.”

One small means of doing this recently was, when the banking crisis erupted, members of Socialist Democracy leafleted bank workers in Dublin asking them to let other workers know what was going on in the banks through leaking internal emails etc.  This small step abrogating business secrecy is a first step to workers’ control.  The poor response showed that the preparatory work described by Trotsky had yet to begin.

In this post I want to look at what is meant by workers’ control and how this is a result of the working class’s historical experience of this means of struggle.  The experience shows that it inevitably arises as a result of a crisis, and crises are by their nature temporary, occasioned by a society-wide political crisis or by the threatened closure of a particular factory that is producing unnecessary products, is working in an obsolete manner or is otherwise failing to compete successfully in the capitalist market.

How to institutionalise such control in periods of relative calm is a central problem we will look at in future. Relying on temporary crises to quickly provide workers with answers to the problems posed by their taking control has not resulted in success.  Revolutions of themselves do not give all the answers to the problems posed by revolution, at least not unless they are prepared for and prepared for well.  Since revolution is the task of workers themselves we are talking about how they can be prepared to take on the tasks of control.  Such preparation involves convincing at least some of them them that they should want to control or manage their own places of work as well as how they might be able to do so.  Only in this way can the superiority of worker owned and managed production be demonstrated.

The historical understanding of what workers’ control means derives mainly from the experience of the Russian revolution in 1917; the only successful workers led revolution.  Yet the goal of this revolution was initially a democratic republic, not a workers’ state, with the result that only a ‘transitional’ social and economic programme was on the agenda.  A decision to seize power by the Bolshevik Party could not change the level of economic and social development in itself.  We can see from an earlier post that this informed Lenin’s view that the immediate economic programme was one more akin to state capitalism than complete working class ownership and  power over the economy.

This is decisive in understanding the development of the revolution.  The workers could seize state power in order to stop the war, support distribution of land to the peasantry and attempt to put some organisation on production but workers could not by an act of will develop the Russian economy under  their own control and management, at least not outside of a successful international revolution, and this never came.

Workers’ control in such a situation did not, and at least initially could not, equate to complete management.  In Russian ‘kontrol’ means oversight; a “very timid and modest” socialism, as the left Menshevik Sukhanov put it.  The Bolsheviks understood that workers’ control was not socialism but a transitional measure towards it.  Capitalists would and did continue to manage their enterprises.  (The historian E H Carr reported that in some towns workers who had driven out their bosses were forced to seek their return.)

This approach was supported by the factory committees created by the workers during the revolution.  These committees initially hardly went beyond militant trade unionism but did not accept management prerogatives as inevitable and, as the bosses increasingly sabotaged production, they increased their interventions to take more radical measures of control.

The workers nevertheless saw the solution to their problems as soviet power and state regulation, evidence by their acceptance of a purely consultative voice in state-owned (as opposed to privately owned)enterprises.  This reflected the worker’s weakness, expressed by one shipyard worker on the eve of the October revolution at a factory committee conference: “often the factory committees turn out to be helpless . . . Only a reorganisation of state power can make it possible to develop our activity.”  Thus much of the activity of the factory committees was attempting to find fuel, raw materials and money simply to keep factories going and real management was sometimes consciously avoided.

Trade union leaders criticised the factory committees for only looking after the interests of their own plants and for not being independent of the capitalists who owned them. The workers in the committees were themselves keenly aware of being compromised by the capitalist owners, of being given responsibility without effective power.

While the revolution was supposed to have a transitional character in economic terms, workers were faced with greater and greater sabotage and recognised that the worsening crisis required a solution that could only come from the state, which would provide the centralised control that would combat economic dislocation. The weakness of the workers themselves can be quantified by the decline in their number.  In 1917 the industrial workforce in Petrograd was 406,312 but fell to 339,641 by the start of 1918 and only 143,915 by May of that year.

Although more active forms of workers’ control were sanctioned after the revolution, it had been increasing anyway, the steps towards the central state regulation that had been championed were constrained by the lack of an “organised technical apparatus, corresponding to the interests of the proletariat”, as the resolution unanimously adopted by the January 1918 Factory Committee conference put it.  Nevertheless the conference called for the immediate nationalisation of factories in a good physical and financial situation.

The economic situation however was desperate as the new state faced immediate armed attack.  The Factory Committee conference noted that: “Every one of us knows that our industrial life is coming to a standstill and that the moment is fast approaching when it will die.  We are now living through its death spasms.  Here the question of control is no longer relevant. You can control only when you have something to control.”

Widespread nationalisation was introduced but it was viewed as a necessity compelled by circumstances, not a positive choice and not one driven by socialist ideology.  Alongside this nationalisation was increasing centralisation of economic decision making, which was imposed on the factories.

But of course if the workers were unable to run the factories how could they run the state?  Complaining that the factory committees were ignoring everything but their own local interests and themselves disorganising production one section of the state’s economic organisation stated that reorganisation would not happen “without a struggle of the worker’s government against the workers’ organisations.”

All these quotes are taken from the article by David Mandel in the collection of articles on workers’ control in the book ‘Ours to Master and to Own: Workers control from the Commune to the Present.’  In this he states that the contradiction between planning and workers self-management can be resolved if there are conditions allowing for significant limitations on central control and these conditions also provide workers with security and a decent standard of living.  Both, he says, were absent in Russia.  More important for the argument here is his view that there must be a working class capable of defending self-management.

This too did not exist in Russia and our very brief review shows this.  The Bolsheviks were acutely aware of the low cultural development of Russian workers, evidenced through their lack of education, high levels of illiteracy, lack of technical skills and lack of experience in the tasks of economic administration and management.  That their numbers declined dramatically, not least because of the demands of the Red Army, leaves no grounds for surprise that this experiment in workers’ control did not prove successful.

The limited character of the initial steps in control and the awareness workers had of their lack of skills were revealed in their calls for the state to reorganise production.  While certain centralised controls over the economy are a necessity, and this is doubly so in order to destroy the power of the ruling classes, the socialist revolution is not about workers looking to any separate body of people to complete tasks that it must carry out.

If workers could not control production they could not be expected to control state power.  This was to turn out to be the experience of the revolution and in its destruction by Stalinism the state turned into the ideal personification of socialism.

This identification of socialism with the state in the minds of millions of workers across the world continues, a product of Stalinism and of social democracy but gleefully seized on by the right.  Since the state is organised on a national basis this also entailed socialism’s corruption by nationalism.

The path required to developing and deepening a genuine workers’ revolution lay not in seeking salvation in the state but in workers creation of this state themselves out of their own activity in the factory committees and soviets.  The coordination, centralisation and extension of the functions of these bodies would ideally have been the means to build a new state power that could destroy and replace the old.  It would also have been the organisation that would have combatted economic dislocation and provided the means for cooperative planning of production and trade with the independent peasantry.

In this sense the Russian revolution is not a model for today.  While workers control came to the fore in this revolution its limitations must be recognised and a way looked to that would overcome them in future.

It might be argued that the backward cultural level of the Russian working class, while acknowledging its high class consciousness, is not a problem today.  After all the working class in Ireland, Britain and further afield is literate, educated and with a large number educated to third level education.  The working class is the vast majority of society, which it was not in Russia in 1917.  Many workers are now highly skilled albeit specialised.  This however is a one sided way of looking at things. 

Firstly on the technical side the very specialisation that makes some workers skilled reflects an increased division of labour that in so far as it is deep, widespread and reflected also in a division of social roles militates against the widespread accumulation of the skills and experience of management and control.

Many workers reflect their specialisation in a narrowing of outlook but illustrates that the increased division of labour is foremost a question of political class consciousness which is at least in part a reflection of social and economic stratification of the class.  Thus some workers see themselves as professionals – engineers, accountants, managers etc. and regard themselves as middle class.  Just like white collar workers and state civil servants in the Russian revolution they do not identify themselves as workers with separate political interests along with other workers slightly below them in the social hierarchy.  They do not identify with socialism.

Modern society in this way reflects early twentieth century Russia: the working class does not rule society, even at the behest of the capitalist class, but there are numerous social layers (the middle classes) who help the capitalist class to do so, and they imbue into themselves and others the political outlook of their masters.

Because the division of labour is increasingly an international phenomenon the road of revolution at initially the national level poses even bigger problems for workers management of production than existed in Russia in 1917.  Especially in Ireland production is often a minor part of an internationally dispersed process so that control of the whole is exercised elsewhere.  How then do workers take control of such production in any one country especially one lower down the value chain?

For these reasons revolution needs to be prepared.  It needs prepared in the sense that workers must be won to a fully conscious commitment to their becoming the ruling class of society; a rule based on their ownership and management of the forces of production.  In order to achieve this, the force of example rather than simply the power of argument is necessary.  In other words workers must have seen and experienced ownership and management.  This can provide many with the experience and knowledge necessary to lead the whole class to own and manage the whole economy when such control is the basis for their own state power, after capitalist state power has been destroyed.

The best, in fact only way, to prepare for socialism is through practice, practice in asserting the interests of the working class as the potential new dominant class of society.  Demands for nationalisation are demands that someone else, the state – because the state is a group of people – create the good society.  And when anyone is asked to create the good society it is always what is good for them.

Such dominance is more than simple resistance to the exploitation of the old society but must in some way herald the new.  Opposition to austerity for example can only ameliorate the effects of capitalism and does not provide panaceas – not even ‘taxing the rich.’  The real importance of fighting austerity therefore lies in the building of the organisation and class consciousness of the working class. This is what Marx meant when he wrote in ‘The Communist Manifesto that:

“the Communists fight for the attainment of the immediate aims, for the enforcement of the momentary interests of the working class; but in the movement of the present, they also represent and take care of the future of that movement.”  The future is that in its “support (for) every revolutionary movement against the existing social and political order of things” communists “in all these movements, (they) bring to the front, as the leading question in each, the property question, no matter what its degree of development at the time.”

This then is the importance of workers’ control and workers ownership.  It is the question of the future of the movement of the working class because it brings to the fore “the property question.” 

I shall look at it some more in future posts.