BBC Spotlight and the Housing Executive – what sort of scandal? Part 2

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Belfast Peace Wall (Belfast Telegraph)

Belfast Peace Wall (Belfast Telegraph)

By Belfast Plebian

Episode two commenced after the Assembly was recalled for a one-day public debate on the developing scandal on July 8th..  Once more it was down to Jim Allister to make most of the running, alleging that Red Sky had carried out work on the homes and offices of DUP members and that they even had the gall to charge some of the costs to the Assembly.  He tried to arrange for a motion calling for McCausland’s to be put up for vote but was rebuffed by Sinn Fein who wanted a less severe motion to be voted on.

It was also alleged that Nelson McCausland had an improper relationship with Turkington Holdings, a Portadown based firm that specialises in windows, doors and conservatory installations. The allegation was that he had agreed to delay the ongoing work by other rival firms with a view to favouring Turkington on the grounds of cost.  Before making his suspension order it was alleged that he met with Turkington, the chair of witch is a DUP member. But the heart of the second episode came down to final the motion and vote.

The motion asked that Mr McCausland step aside while the inquiry into the matter by the DSD committee was being carried out.  It also noted that the Minister may have purposely misled both the Assembly and the committee. The motion drawn up by Sinn Fein was supported by the Ulster Unionists, the SDLP and Allaince  plus the Greens and the new Unionist Party NI21. The motion collapsed even though 54 members voted for it and 32 voted against. This outcome was possible due to a safeguard inserted into the Belfast Agreement known as the petition of concern. It allows any 30 members to effectively veto a motion or law they feel is discriminatory, the DUP with 38 MLAs is the only party that can do this without votes from others.   

The reaction to the petition of concern in the press was interesting because for the first time there was a feeling of genuine alarm about the Stormont settlement that had been strongly endorsed from day one of the ‘peace process’. The political analysis in ‘The Irish News’ was pessimistic; the headline banner on the day after the DUP move to block the censure motion read ‘It was a bad day for democracy.’

The writer feared that the clause that was supposed to prevent sectarian majority rule was now being used to further it: ‘ Power sharing may be the concept the devolved institutions are built on but it seems power ultimately resides with the party that can consistently muster 30 signatures and lodge a petition of concern whenever it is unhappy with a particular assembly motion. The upshot is therefore not democracy but an inverted form of majoritarianism. It’s a system that leaves the majority party in a position where it can overrule the rest of the assembly even when outnumbered two-to-one.’

‘The Irish News’ editorial was a little less stark but still pessimistic, the final paragraph read ‘Many observers will have concluded that standards at Stormont have declined to a stage where basic democratic values have been largely abandoned in the interests of expediency. There will be little public confidence that the truth over Red Sky will ever be established property but it is the wider reputation of our key intuitions that is increasingly under the spotlight.’    

As for the ‘Belfast Telegraph’, their next day front page stated; ‘This was a bad day for democracy’ the three sub headings were ‘debate on Red Sky scandal ends with no action’, ‘parties in the pockets of big business-claim’and ‘Assembly rules misused by DUP to stifle debate.’ The editorial was less pessimistic making the argument that the petition of concern could be fixed: ‘Although the motion gained cross-party and cross-community support in the Assembly it was defeated by a petition of concern, a piece of political trickery which is meant to stop minorities being ridden roughshod over, which is increasingly is used by all parties if they find themselves in trouble. It is clear that thisparticular manoeuvre will have to be rethought as it is now being misused.’

The job of expressing the fears and frustrations of the small group of reformers who had hoped for a gradual transformation out of a sectarian conflict was left to Robin Wilson the one time editor of Fortnight Magazine ; ‘The Red Sky  episode is a flashing red light that something is very rotten in the mini-state that is Northern Ireland. It encapsulates a toxic cocktail of conservatism, clientelism and corruption, which, if notaddressed, will further discredit the pursuit of democratic politics as the public service it should be.’

At least Robin Wilson acknowledged in his article that the outrageous behaviour had a lot more to do with sectarian partisanship than with corruption, the last paragraph of his article stated: ‘the minister intends to dismantle the Executive, rolling back that four-decades-old victory of the civil rights movement against the old unionist order. The new one looks dispiritingly similar.’  

We should not pass by the media reaction without mentioning one other perspective on the Red Sky affair; three days after the Stormont travesty the Belfast Telegraph carried an analysis by trade union socialist Eamonn McCann, presumably to get an alternative viewpoint. The banner of his article was ‘Red Sky, red faces and the nightmare of privatisation.’

Mr McCann stated the proposition he was out to prove in his opening paragraph ‘None of the issues which brought MLAs hotfoot back to Stormont on Monday would have arisen if the repair and maintenance of public sector housing hadn’t been privatised. No privatisation, no meeting with Red Sky representatives in Nelson McCausland,s office, no Stephen Brimstone/Jenny Palmer  phone call, no dubiety about the stop-start progress of a double contract, no reason for MLAs to be recalled just days into their nine week summer holiday

Little thought is required to refute Mr McCann’s proposition, having public control over a central Housing Authority is a good thing provided at least one condition is fulfilled, namely that those in control are socialists.  If those in charge are sectarians, racists or state capitalists then if anything it is a worse arrangement than having it in many private hands.  Unfortunately those taking charge in this case are not socialists and may even be sectarian.

Comment and Explanation

We can certainly say that the Red Sky scandal represents something more than a scandal and something less than a political crisis. It is a mini crisis of the peace process, something that is hard to disguise. The first instinct of all of those in thrall to the peace process was to disguise it as a corruption scandal, a case of one party, the DUP seeking to do financial favours for the owners of a couple of small firms that happen to back the party.  The pro-agreement media was therefore content to run behind Jim Allister for he seemed to have enough inside information to make the corruption charge stick. The sectarian substance was reduced to a secondary quality

What might have come out of this allegation was a routine resignation of a wayward politician in an otherwise stable Executive. One small problem was that another DUP minister would have replaced the sacked one and we would have merely carried on from the point we had left i.e. the programme of dismantling the Housing Executive. Then the realisation dawned on some people that the minister had no intention of resigning because his party had no intention of letting little things like democratic norms get in the way of staying in charge of the big spending departments of government. The DUP standpoint was No Surrender to our critics!

The pro-agreement media began to wonder if the current political arrangements might make it impossible to address wrongdoing not only by the odd maniacal politician but entire maniacal political parties. It was kind of expected that an exposed politico would be cut loose by his own party. One step behind the fear of unaccountable financial corruption lurks of course the longer and deeper fear of sectarian competition over the spoils of government

Pro-agreement nationalist political opinion now realised that the safeguards they had long thought they had secured against bad government were not as sound as they had believed. They now had to face up to the fact that it is an anti-power sharing sectarian party they have to deal with in government and not some reformed unionist party. On the other side, the pro-agreement unionists had to confront the fact that you only need 30 votes to carry on like the DUP does when in government and Sinn Fein have 29 votes and destined to get past the magic number in the near future.

Pro-agreement unionists, who are in fact a minority within unionism, have zero confidence in Sinn Fein not doing the same thing as the DUP. Sinn Fein have been less strident about the scandal over procurement contracts than others expected; the party refused to accept an amendment to their own weak motion of censure as phrased by Jim Allistar calling for the resignation of McCausland.  Knowing what one knows about the building trade in nationalist political constituencies it is easy to conclude that they would not be too keen on a thorough going inspection and clean up themselves. They are up for an inquiry all right so all as it is confined to Red Sky.

We predict the two big political parties will continue on much as before, jockeying for position and biting into sectarian patronage and running down the public purse to no good end. The Orange Order, to give one example, is now subsidised like it wasn’t in the halcyon days of one party Orange rule; it receives money for its decorous band uniforms, to buy musical instruments, to pay for music lessons and there are more bands than ever. The local government even funds the bonfires, which used to be stuck up by nothing-to-do summer youths – now they are professional affairs put together by men using heavy machinery,  The mural painting of walls is also funded.

The Orange Order is renovating itself and building up a heritage with European Peace money to the tune of £7 million.  As for the paymaster of sectarianism in London, the real government has so far kept shtum and if things come to a breakdown they will invite in a prominent American to recommend some institutional changes probably along the line suggestion by the Belfast Telegraph i.e. make it harder for the main political parties to draw on a petition of concern to block a cross community majority vote. 

There is a mini crisis of confidence facing many of those well-educated professionals currently staffing the Public Sector. These people like to think of themselves as untouched by low-down sectarian squabbles. The Spotlight programme threw up a number of side issues that point in this direction.

It was pointed out in the programme that the first people to come under pressure was not the Housing Executive Chairman but the housing inspectors who had refused to give a pass to Red Sky’s shoddy work . The group development manager of Red Sky, one Pauline Gazzard, felt confident enough to write a letter to a senior Housing Executive manager with the expectation that the inspectors’ reports against Red Sky, put together by a conscientious district officer Gary Ballentine, an elder in the Presbyterian church, would be brushed aside: ‘It is also considered necessary to re-iterate our deep concern in relation to certain personalities who remain working in the West Belfast District Office and we trust appropriate actions will be taken to address this in the near future.’

The letter is address to a senior Housing Executive manager but was never seen by the Board or the Chairman when they were investigating the matter; the three West Belfast inspectors were in fact removed and sent elsewhere. What is abundantly clear is that senior managers at the Housing Executive were depriving the Board and the chairman of very relevant information.

The report that the chairman commissioned and delivered in 2011 discovered that 80% of the charging made by Red Sky was questionable. The upshot was that 8 managers were disciplined and some others retired early for allowing the overcharging to go on. The question to be pondered – were they in receipt of bribes or were they making a calculation that it would not be wise to rock the sectarian boat

If we next move on to the police, they have been asked three times to investigate matters pertaining to Red Sky.  Once in 2006 when several lesser Housing Executive workers were found to be taking gifts from Red Sky, no charges were preferred then.  The second time when Chairman Rowntree provided them with the evidence of criminal wrong doing in 2011, the evidence that was used to terminate the £7 million annual contract, and again the police sat on their hands.  Finally the Spotlight team asked the police were they thinking of opening up a new investigation; they replied not without evidence.

But if there was no evidence how come the Comptroller and Auditor General Kieran Donnelly says that ‘ a sample of 20 kitchen replacement schemes (out of a total of 242 schemes undertaken to date) found overpayments of £1.3 million out of a total cost for all schemes examined of £6.2 million. The potential total contractor overpayment since 2008 is estimated at around £18 million’

And there was other evidence; it came from Pauline Gazzard who no longer works for Red Sky/Totalis. When the administrator took over the running of Red Sky she wrote a 13-page letter to BDO explaining that she knew for a fact that the company she formerly worked for had bribed at least three procurement officers from the Housing Executive. The Spotlight reporter said ‘We asked the police ifthey had the letter now would they act on it now-they refused to comment.’

The Spotlight reporter then asked the Housing Executive Chairman, who had been keen to have the police involved, about the seeming lethargy of the police investigation and his reply was ‘I am absolutely gobsmacked’.   Then we have the administrators at BDO; Pauline Gazzard told Spotlight that she was surprised BDO showed no interest in her letter or her allegations. Not only that, BDO did not pass the information she gave them on to the Board of the Housing Executive or the police. When asked about the matter BDO claimed client confidentially meant they could not comment.

Here’s the rub. Did one small building firm have so much sway, over senior Housing Executive managers, over the police, over accountants and insolvency professionals, over politicians and then over the Head of the Government because of its economic weight, after all it was hardly BP or Shell Oil or is there another explanation?

The other explanation is a bit crude and may even sound offensive to some ears. The firm’s managers knew how to play the sectarian playbook to make other people quake a little.  The firm was quick to blame the Catholic residents for making false complaints, and then they said the inspectors were bigots even though this was patently untrue.  They then attacked the chairman of the Housing Executive indicating he was a dodgy nationalist, then they encouraged their work force to picket the offices of the Housing Executive, carrying banners with slogans like the Housing Executive is anti-Protestant, and finally they told the DUP that the firm had done no wrong and was being starved of work contracts because it was believed to be Protestant.

All those who stepped aside for Red Sky did so because they were conscious of the sectarian clouds that sit low and heavy over society. The politics is sectarian because the society is sectarian. What is more the sectarian cloud cover is thickening rather than dispersing due to the fact that sectarian politicians are taking over the basic departments of government. As for those working under the new dispensation, things are about to get a bit more complicated and choking.

In the more recent past, if you were a public sector professional you only had to contend with a subdued sectarianism, the police and the Northern Office of course was something different, now it is back and it is naked and outspoken.  What is even more disconcerting, the really green nationalists want you to bend in their direction too, overlook this misdemeanour, override a professional service protocol when instructed to do so by somebody with political connections.  How the hell do you bend in two sectarian directions at once?  Do you decide to bend with the Orange 60 per cent of the time and then bend with the Green the other 40 per cent?

The relationship between the relatively privileged professional classes who number a fair number and the sectarian society is about to get a bit more fraught. We can see clear evidence of this emerging from this case.  McCausland decided to wage a vendetta against the Chairman of the Housing Executive, so he asked for some evidence to get at his target.  Two senior DSD civil servants accompanied him to the infamous meeting with the Red Sky management at Stormont; the minutes of that meeting read like a party political conspiracy.  Is this what civil servants should be doing?

The DSD permanent secretary is busy trying to get Brian Rowntree removed from his other public service job with the civil service commissioners’ according to Spotlight he got his staff to trawl through thousands of e-mails hoping to find incriminating evidence against Rowntree.  What a truly poisonous atmosphere.

If a government department supervised by a political Orangeman hounds a career civil servant out of his post, will a department run by a Nationalist respond in kind, if you take out one of ours we will take out one of yours?  Legal threats are flying about left, right and centre.  No wonder the Spotlight programme began by saying that many people ‘we spoke to were scared to speak on the record.’ Most of these people were of the professional class. Welcome to the future sectarian society!  Mandy McAuley the girl that kicked the hornet’s nest.

BBC Spotlight and the Housing Executive – what sort of scandal?

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Housing Executive 2.jpg

BY Bellfast Plebian 

A little while ago (Jan 2013) this blog singled out Nelson MaCausland, a Minister in the stored Northern Ireland Executive, as a target for criticism.  This was no random selection of a minister in an improbable regional government that we happen to have little respect for. Nelson was a bit of a special case because he was the minister most likely to cause a commotion.

It was asserted that this neo-conservative Orangeman is about the least preferable person you could hope for in charge of managing the socially damaging CON-DEM policy of comprehensive welfare reform. We were sure his approach would be to offer minimum resistance to the drastic changes being proposed.  We were especially worried that he had been given overarching control over the Northern Ireland Housing Executive: the publicly funded organisation specifically mandated to allocate social housing on the basis of objective need rather than community and religious patronage.  The Minister we said was so ardent an evangelic Protestant and a strident Orangeman that he would be inclined to put the interest of promoting his own religious community above the important non-sectarian consideration that pertains to the neutral role required of a housing minister. Well it didn’t take very long for our worries about Nelson to be confirmed – the bomb exploded earlier than we anticipated – and a few days after we posted our account he began his political assault on the very existence of the Housing Executive.

At first Nelson’s spat with the Housing Executive was carefully phrased in the all too familiar neo-liberal one of saving the taxpayer money. The Housing Executive is managed and funded on the model of a department of the British Civil Service and because it is not classified as belonging to the private sector economy it is therefore almost by definition deemed to be inefficient and wasteful of taxpayer money by the major accountancy firms that aspire to set the standards for every social service. The new Housing Executive will work all the better if it is broken up and placed in the hands of Housing Associations that know the realities of private sector finance, so claimed Nelson.

Hardly anyone of influence objected to Nelson’s declared programme of privatisation barring a few union leaders that voiced worries over potential redundancies. To most tender minded folk (folk is the favoured term used by Nelson) the reasoning if not impeccable was at least normative for our current economic condition. More tough-minded types wondered if Nelson’s impeccable reasoning was merely a convenient cover to pursue an old style Orange vendetta against the Housing Executive. In certain quarters the Housing Executive is still thought of as an anti-Orange institution, something that was imposed on Orange society against its interest, a concession made in the past by a nervous Labour government running scared of the Northern Ireland civil rights campaign.

There is a certain type of Orangeman who resents the very existence of the Housing Executive, who would like to see it done too death.  I am certainly one of those dwindling number of suspicious types who still believe that there are plenty of unreformed Orangeman around, dreaming of taking back the little victories of the civil rights movement.  I suspected that Nelson was one of those unreformed Orangeman who was bent on returning to a long standing sectarian battle over the political control of social housing and I was aroused by the fact that Nelson was only into the job a few weeks when he began asking for the religious make up of the workforce, right down to the numbers in individual offices. Was he of the viewpoint that the Housing Executive had a pinko-management and a Catholic majority work force representing an earlier victory for the sectarian enemy?  Was he out to knock it of its previously set course?  I felt that he was one government minister that needed watching.

Last week the BBC Spotlight programme (3/7/2013) provided us with an insight into what Nelson’s real agenda had been since he became the social development minister.  Before the Spotlight programme was broadcast you could see the aura of hubris already taking shape around Nelson’s head.  On June 10 he had given the management of the Housing Executive a real roasting on the floor of the Assembly; all sorts of charges were flung against the former chairman Brian Rowntree.  He accused the Housing Executive of overspending on repair contracts to the tune of £18 MILLION on four contracts. He also said that one contractor Red Sky had been singled out by the Chairman for retribution for overcharging solely because it was perceived to be a Protestant firm. The unionist benches erupted with shouts of shame on the sectarian Housing Executive. What was also striking about Nelson’s performance was the pleasure he took in laying into the management of the Housing Executive and the satisfaction he got from seeing that the non-unionist parties offering only palliative opposition to his new plan to break up and privatise the public housing body.

Just four weeks later Nelson’s confidence took a punishing blow at the hands of a BBC television expose on what he had been doing out of plain sight.  It turns out that almost everything he said in the Assembly that day was so false that it might rightly called the opposite of the truth. He and his political adviser backed by his party leader had it seems been running a hate campaign against the ousted Chairman of the Housing Executive that smacked of venomous sectarianism. The BBC reporters provided more than enough evidence to allow for other Assembly members to demand his immediate resignation.

The story begins in April 2011 and a building maintenance company situated in the constituency of Peter Robinson goes into administration after a Housing Executive investigation into allegations of low standard work and overpayments. The Board of the Housing Executive felt it had no other option but to cancel the contract with Red Sky due to the facts put before them by inspectors pertaining to the poor quality of the work undertaken by the firm and also by the firms fraudulent charging of tasks not undertaken at all, estimated to be about £1.5 million. The decision of the cross community board was unanimous.

The management of Red Sky decided not to go quietly. In the middle of the April 2011 Assembly Election campaign they approached the leader of the DUP and First Minister Peter Robinson and informed him that the Housing Executive held a sectarian i.e. anti-Protestant bias against the company. Peter was furious about what he had been told about the Housing Executive decision and nine days later led a delegation to meet with its chairman Brian Rowntree to lobby on behalf of the firm. The minutes of that meeting record the First Minister stating that the decision to terminate the contract ‘reflected a sectarian bias on behalf of the Housing Executive.’ He also warned the Chairman that he could expect an enquiry into the Housing Executive after the election of May 2011.

After the Assembly election he appointed his own sectarian attack dog Nelson MaCausland to the post of minister in charge of Social Development, which covers supervision over social housing. A strategy meeting was held in Stormont building on 27 June to find out what could be done to get Red Sky back in the contract game. In attendance where the First Minister Peter Robinson, the Minister of DSD Nelson MaCausland, his political adviser Stephen Brimstone and the DUP MLA Robert Newton.  Crucially, neither the Housing Executive nor the Administrator for Red Sky was invited to the meeting. Three days later Nelson McCausland met with the Chairman of the Housing Executive to insist that the termination of the Red Sky contract be suspended for at least six months.

A letter from Housing Executive chairman Mr Rowntree to DSD Permanent Secretary Will Haire dated July 1, expressed ‘serious concerns and misgivings’ about the way Mr McCausland and his department were attempting to overturn the Board’s decision. Expressing the thought that both Mr Robinson and Mr McCausland may have broken the ministerial code of office by lobbying in support of Red Sky, Mr Rowntree added ‘We understand that meetings have taken place with the senior management of Red Sky in administration and the minister, first minister and other DUP representatives…. This raises the question of did these meetings constitute canvassing and lobbying for government contracts and in breach, not only of public procurement principles but basic codes of conduct in public life.’

Nelson McCausland later said that he took the letter to be like a declaration of war. Having failed to pressure the Chairman of the Housing Executive into overturning the Red Sky decision once, the DUP turned to one of its own councillors who sat on the board of the Housing Executive for a second go. The minister’s special political adviser, one Stephen Brimstone, made an eight-minute phone call to DUP councillor Jenny Palmer and more or less commanded her to change her vote at the next Board meeting called in July 2011 to re-examine the Red Sky decision.

Just ahead of the board meeting Jenny Palmer told the Chairman of the Housing Board about the DUP attempt to make her change her vote and he advised her to declare an interest and absent herself from the vote, which she did. When he failed to get the vote overturned Nelson McCausland carried out Peter Robinson’s original threat and ordered a comprehensive review into how the Housing Executive awards contracts to be carried out by chartered accountants ASM Howarth.  Four days before the ASM report is due to be delivered the Chairman of the Housing Executive resigned citing personal stress and a challenging relationship with the DSD and the minister.  At this point Nelson sensed a retreat, and then went on the offensive accusing the Housing Executive of failing its tenants across many fronts. In January 2013 he announced he intended breaking up the Housing Executive and passing on the ownership of the housing stock to privately run Housing Associations.

Public Reaction:

We will cover this in two episodes. In the first episode we got a party political reaction and a media assessment of a similar temper. Sinn Fein was in the best position to drive the questioning of the credibility of Nelson McCausland and his party boss. Their leader at Stormont is Martin McGuiness the joint first minister with Peter Robinson and their senior policy maker Alex Maskey just happens to be the chairman of the Social Development committee that is supposed to make the Minister accountable.  The first thing to note about Sinn Fein is the party did not call for any immediate resignations from the DUP led government. Some starry-eyed pundits in the media praised this restraint as showing their newfound political maturity.

Martin McGuiness made just two points; that the ‘statutory inquiry led by the DSD under Alex Maskey needs to begiven full support in its work’ and that it was necessary for the Parliamentary Standards Commissioner ‘to investigate the relevant matters raised in the programme as a matter of urgency, these allegationshave the potential to undermine public confidence in the public institutions.’ Two days after the Spotlight programme was broadcast Alex Maskey convened his investigative committee and Nelson duly appeared to face the music. It was the failure of the DSD committee to pursue Nelson that provoked the first episode of widespread negative media reaction.

‘The Irish News’, the main morning newspaper read by nationalists, headlined the report on the committee meeting as; Minister shrugged off Teletubbie Mauling. The chief reporter wrote ‘Chairman Alex Maskey seemed at pains to highlight the good relationship the Minister enjoyed with his scrutiny committee and beyond asserting that the public would be demanding answers said little to cause the DUP rep any concern.’ He concluded the report by stating that ‘all round it was an opportunity missed not so much a grilling as a friendly invitation to the minister to come and warm his toes by the fire.’ 

The Belfast Telegraph, a newspaper traditionally supportive of Unionism, was equally dismissive of the DSD questioning of the DUP minister.  The headline it ran on the 5/7/2013 was ‘Watchdog lets McCausland off the hook.’  The Telegraph reporter was struck by the deference shown to McCausland – ‘He spoke for 54 minutes without one interruption’, something that rarely happens in the equivalent British committees.  He suggested the members were discouraged by Nelson’s verbal dexterity in comparison to their own lack of education. Nelson walked away from the committee asserting that the BBC Spotlight broadcast was just a ‘hotchpotch of speculation, insinuation andinnuendo.’ He threatened the BBC with legal action, as did his boss Peter Robinson, and it should be said that we referred to Nelson’s animus against the local BBC news reporting in our previous blog – Nelson reckons it is moved by a strong anti-British bias.

Because of the general negative media reaction, Sinn Fein decided to take another step and asked for a summer recall of the Stormont Assembly for a one day debate.  It looked as if they felt they needed to perform a bit better than they did at the DSD committee meeting.  However there was still no demand for resignations, only for an investigation about standards of conduct.

It is important to note at this stage what the press and assorted pundits were saying was potentially wrong with what the DUP had been doing. One view was that there was a potential ‘corruption charge’ being levelled at the minister.  What this actually amounted to was difficult to pin down, there was no suggestion that Nelson had sought to make any personal financial gain from the Red Sky advocacy.  Then there was the Sinn Fein procedural charge of breaching the ministerial code of office by lobbying on behalf of a private firm for business contracts.  Peter Robinson felt able to dodge the ministerial code charge by a nimble use of procedural semantics.

On the 5th July he gave an interview to the Irish News claiming that he had attended the strategy meeting with Red Sky in his capacity as elected MP for East Belfast and not in his capacity as the First Minister ; ‘Could anybody expect that the elected representative of east Belfast would do anything other than get exercised about the loss of jobs andseek to do something about it’.  He also declared his annoyance at the BBC saying ‘ I’m no longer going to tolerate this kind of accusations that Spotlight throw out in the hope that nobody takes any action against them for it.’

So within two days of the programme the BBC Spotlight team were facing four legal threats, one from the First Minister, one from Social Development minister Nelson McCausland, one from the management of Red Sky and one from special adviser Stephen Brimstone. A couple of media pundits pointed out that the Executive had recently rejected British Government proposals to change the libel and defamation laws to lessen restrictions and now we know why.

The third area for media concern was about bullying – the attempted bullying of Jenny Palmer by male thugs.  Jenny Palmer was talked about in terms of being a whistleblower, a heroine in the making and she became the must have interviewee.  This was the theme of  ‘The Irish News’ political column by Fionnuala O’Connor – ‘DUP’s whistleblower gives cause for cheer’. The opposition Unionist party in particular made the bullying charge the big issue and their Ross Hussey appeared on the original Spotlight programme to decry the bullying.  Then in the DSD committee meeting Michael Copeland, another Unionist Party member, made the terrible treatment of Jenny Palmer the core of the issue.    

What was remarkable at this point was the fact that the elephant in the room of the evidently sectarian inspired onslaught on the Housing Executive went largely unspoken. This was so much the case that the critics of the media elevated the ultra right wing TUV leader Jim Allister to the role of champion of public morals.  Every time the media wanted a quote about the ‘scandal’ they looked first for one from Jim Allister.

‘The Irish News’ ran the next big story on the Red Sky affair on the 9th July under the front-page banner ‘Allister rounds on the DUP’ accompanied with a picture of him.  On the same day the ‘Belfast Telegraph’ ran their lead with ‘Corruption claims rock Assembly.’  Jim Allister had framed the criticism solely in terms of financial corruption and party political favouritism, and for now most of the political class and media were happy to let it all rest at that.  Jim Allister was afforded a guest column in the Telegraph on July 11th to present us with the heart of the matter: ‘while the party ‘s treatment of Jenny Palmer  is shocking, the most  damning portion of the programme was that which dealt with the glazing contracts after representations from a DUP-friendly contractor, Mr McCausland put on hold the glazing contracts.’

He also argued for a judge led inquiry under the 2005 Inquires Act because 10 of the 11 members of the DSD committee belonged to parties of the Executive.  Another media pundit Alec Kane actually found some comfort in the scandal writing in the Telegraph; ‘This is also the first major political story which hasn’t centred on a spat between unionism and republicanism or between the DUP/Sinn Fein and the smaller Executive parties. And again that is what makes it interesting, because it’s as close as we have come to a normal so called scandal.’ (5/7/2013)

to be continued.

Workers’ control of production Part 2

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0425.1974_Portugal-newspapeIn my last post on workers’ control I noted that it inevitably arose as a result of crisis, and crises are by their nature temporary, occasioned by society-wide political upheavals or by threatened closure of a particular workplace that is perhaps producing unnecessary products, is working in an obsolete manner or is otherwise failing to compete successfully in the capitalist market.

In Britain in the 1970s there were more than 260 occupations of workplaces by their work forces including, perhaps most famously, at Upper Clyde Shipbuilders in Glasgow, usually sparked off by closures, layoffs, redundancies, dismissals or threats of closure.  Such occupations were spontaneous, often acts of desperation and with no real planning.  If successful, the numbers occupying would be offered jobs by a new employer although this number would usually be less than when the occupation would have begun.  When no new owners would appear the occupations might attempt to become workers’ cooperatives but the motivation was normally a pragmatic search for a solution rather than something drawn from political commitment and ideology.

The occupations were often built by shop stewards and sometimes at odds with the official trade union movement, a situation we see again and again and a result of factors far from accidental.

The theme of ‘industrial democracy’ was very much alive and in 1974 the Conservative Government called a general election on the issue of “who governs Britain”, in direct reference to the miners who had engaged in successful strike action.  The Tories lost and the new Labour Party Government included Tony Benn, who wanted greater involvement of workers in their workplaces.  He also came into conflict with trade union leaders who opposed his dealings with rank and file groups of workers.  “The whole machine is against you” Benn told one supporter of an occupation at Imperial Typewriters.

Workers’ cooperatives received the support of Benn, who was in a position to do something as Minister at the Department of Industry, but his financial help was relatively small and most industrial aid continued to go towards private industry.  That which did go to the cooperatives was mainly for compensation to previous owners who were paid for obsolete plant.  This left the new cooperatives under-capitalised and without the necessary resources to carry out research and development.  They generally lasted only a short space of time but still sometimes produced radical, innovative and still exemplary struggles.  One such was as at Lucas Aerospace, where workers pioneered conversion plans to socially useful production, again opposed by the union leadership.

By the end of the decade however these types of struggles had declined dramatically.  Few of the experiments in workers’ ownership survived and as history is usually written by the winner the victory of Thatcher, built on the attacks on workers commenced by Labour, left a legacy of disappointment and nostalgia in some old enough to remember.  This has affected the Left up to today in so far as it is suspicious, if not actually hostile, to workers’ cooperatives.  This is a profound mistake as the willingness of workers to fight for ownership and control of their own workplaces is an instinctive impulse to go beyond capitalism.

The history of American workers organisation in the 1930s is perhaps more celebrated than this experience but in some ways was more limited.  Workers and trade union power grew during the decade not just because of the struggle of workers to organise, most famously in Minneapolis, but because of the strong growth of US manufacturing industry.  Between 1936 and 1939 workers occupied 583plants in sit-down strikes in defence of their terms and conditions, protection of wages, achievement of union recognition, or prevention of sell-outs where recognition already existed. These were often successful.

Unfortunately there followed 70 years of union-management collaboration – no strike agreements during the second world war; the witch hunt and expulsion of socialist activists in the McCarthy period; mob penetration of the union movement and the turning of the union bureaucracy into a world-wide vehicle of the US state in its cold war with the Soviet Union.  The US union movement has now declined so much that in most of the private sector it is irrelevant, with unionisation accounting for only 7.5 per cent in the private sector in 2008.  In some workplaces where unions do ‘organise’ workers are not even aware there is a union!

The history of American workers’ militancy drives home a lesson to be  learnt from the British experience of the 1970s and 1980s – that politics are not only determined by workers militancy and their experiments with workers control but that politics can influence decisively the short and long-term success of these experiments.

In the end the question of politics is crucial, which is why Marxists believe that working class conquest of state power – revolution – is decisive.  It is important however not to telescope the path to this destination.  Revolution is decisive only if the material basis for working class rule is present.  This is not simply a question of the level of economic development but of the social and political development of the working class.  Without both of these the question of revolution is not posed practically i.e. in reality, no matter what more general ‘crisis of capitalism’ is evident.

The analysis of workers’ control in these posts is based on the belief that working class conquest of state power is necessary but that the immediate question is how to make that a widely shared goal given the low level of class consciousness and struggle than now pertains.

It is therefore important to attempt to draw lessons from the impact of political developments on workers attempts at independent organisation in the workplace.  In turn we can then look at the role of workers’ organisation in the workplace for its impact on wider political struggle.  This will reveal the limits as well as the strengths of a workplace-based strategy and what political demands should be raised as a result.  Such lessons informs the opposition to calls for nationalisation that have been argued in many earlier posts.

For example in the Spanish revolution in the 1930s it was the Republican state that strangled the workers’ and peasants’ collectives rather than the fascist counterrevolution.  Clearly in this case a call for this government to nationalise such collectives would not have made much sense.  Anarchists believed these collectives were a means of controlling the Republican authorities but clearly what was needed was an alternative Government and state – perhaps built on these bodies.

In Yugoslavia self-management was a means of mobilising the population against economic blockade and potential invasion, boosting production, minimising the power of the trade unions during a labour shortage and hoping that the workers would discipline themselves.  Unfortunately self-management as then practised led to accusations of workers’ neo-capitalism in which the enterprises were seen as the workers property, narrowly conceived, so that they competed with each other in a capitalist-like manner.  Self-management became not a means of workers self-realisation but a trade union-like bargaining system of clientelism and patronage.  Increased enterprise autonomy acted to dissolve wider working class solidarity leaving enterprise loyalty and territorial state loyalty as the alternative, one which ultimately descended into bitter and bloody nationalist war.  On the way to this dénouement it has been argued that enterprise autonomy became a mechanism to insert the Yugoslav economy directly into the capitalist world market.  Increased autonomy became the means of strengthening management power not workers’ autonomy.

Both Spain and Yugoslavia are testament to the fact that without real working class political and state power workers’ control can be subverted and/or crushed.  I have argued that it is the lack of workers’ economic power and experience before revolutionary crises that has weakened the struggle for their class rule thus making revolutionary success less likely in such crises.  But it is also true that such episodic economic power is doomed without a political project.  In Poland workers councils existed in 1945, 1956, 1970 and 1980-81 but revolution there became a restoration of capitalism.

In nationalist revolutions, such as in Indonesia, the most radical actions of workers are betrayed by a backward political consciousness; as when workers control is achieved and defended not as an extension of workers’ power as a class but as the property and achievement of the new independent (still capitalist) state.  This state can indulge in the wildest revolutionary rhetoric but as long as its power is not an extension of that of the workers it is just rhetoric, to be retracted when the new state feels itself more in control.  It succeeds in this as long as workers power is mistakenly seen by its holders as the gift of the newly independent state.  The examples of nationalism trumping the radical actions of workers are legion and proof again that revolutionary action does not automatically generate revolutionary socialist politics and consciousness.

What is clearly decisive is workers’ own consciousness and workers control, self-management or councils are not in themselves decisive in determining it.  This however is not the question and not the argument being put.  There is no ‘magic’ strategy guaranteeing a workers’ victory but there are more or less adequate roads and strategic conceptions.

The argument here is that workers’ control, and in the longer term, workers’ ownership can provide a more solid, permanent and robust material basis for the development of the necessary socialist consciousness than simple trade unionism, no matter how militant.  More realistic than reliance on spontaneous political revolutions to do all the work of consciousness raising in the necessarily short space of time in which they take place and certainly more than demands for nationalisation, which for example were obviously meaningless in both Yugoslavia and Poland.

What workers ownership should do is provide a basis and foundation for a political programme that seeks to extend and deepen this form of ownership and give it a political dimension, to make easier removal of the division between the political and the economic that characterises capitalism.  Workers’ collective control and ownership of the state can be more easily argued for on the basis of their wider ownership in the economy.

The argument is more easily advanced if there exists a successful worker owned and controlled sector of the economy that can be presented as an alternative to the capitalist owned sector or the illusion that a benevolent state can take ownership of the latter in order to benefit workers.  On this basis the socialist project can become a political one for which the ideal form to advance it is a mass workers’ party.  Such a project can begin to win the battle for hegemony within societies which are currently dominated by capitalist ideas despite the objective failures of that system.  A real material basis for an alternative is provided that can focus generalised discontent that now expresses itself in free-floating ethical concerns for justice and can find no more specific or concrete alternative than vague calls that ‘another world is possible.’  Instead through development of workers’ cooperatives and the wider labour movement another world is built in front of our eyes.

The absence of such hegemony of ideas, and its corollary – that no alternative to the capitalist system seems possible – results in the upheavals that returned societies to capitalism in Eastern Europe and the Soviet Union.  This wider and deeper lack of legitimacy of the socialist project weighs heavily on the spontaneous activity of workers even when they have engaged in the most radical activity.

In the Portuguese revolution in 1974 a movement within the army overthrew the dictatorship and between May and October of that year 4,000 workers’ commissions were established following mass meetings.  Not only factories but empty houses and apartments were occupied.

Within these commissions political competition developed between the Portuguese Communist Party and smaller revolutionary currents.  A failed right wing coup shifted events further to the Left.  Workers councils became not just organs of control in the workplace but organisations of struggle that could potentially threaten the power of the capitalist state.

In the end however they proved too weak and were unable to pose a political alternative to the quickly developing normal organisations of capitalist democracy – trade unions, political parties, parliament and the state.  In the end the Portuguese Socialist Party became the mechanism for a stabilisation of capitalist rule and bourgeois democracy.

Short-lived experiments in workers control and ownership were not in themselves capable of establishing hegemony for the project of workers’ state power.  A deeper and wider radicalisation was required.

The point is that this can take time and can only come about through the development of socialist consciousness in the working class over a more or less extended period and this must rest on a material base.  This can only be the development of the power of the workers in existing capitalist society, expressed in democratic trade unions, political parties, cultural organisations and workers cooperatives.

The opposite of this road is reliance on the state, expressed in the demand for nationalisation.  In Spain, Eastern Europe, Indonesia and Portugal it was the State which became the guarantor of capitalist ownership and power.

Today we are in circumstances where workers must not only defend themselves against the depredations of capitalism – battling against austerity – but socialists must also look to ways in which to advance a workers consciousness that seeks permanent expression of their needs and powers.  Not just defending immediate interests but looking and taking care of the future of the movement and workers’ position in society.

But it is not simply about the needs of the present as against the needs of the future because Marxism is the belief, confirmed by nearly two centuries of industrial capitalism, that it is not possible to satisfy the needs of workers today by only fighting today’s battles.  A socialist society is the future only because it is the answer to the challe-nges and problems of the present.  The demands for workers control and ownership express this view and are rejection of the clam that the existing capitalist state, by nationalisation etc, can provide the answer.

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.

DSC_0408

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.

Marx on pre-capitalist societies: review of ‘Marx at the Margins’ part IV

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karl-marx-theoristBy Belfast Plebian

Marx published very little in the last ten years of his life and did not even manage to finish volumes two and three of Capital.  Some historians have said that he ran out of mental capacity. There were only two important documents published, small in size: the Critique of the Gotha Programme of 1875 is a schematic appraisal of the muddled socialism of Germany Social Democracy and the other a revised version of the Communist Manifesto for mainly Russian readers published just a month before Marx died in March 1883

It is the second document that offers a clue to what Marx was researching in his later years.  Marx and Engels state in the preface that they had neglected to say much concerning social developments in the United States of America and also in Russia in the original Manifesto. They then present a brief synopsis of the condition of the small independent farmers in the United States under the duress of expanding capital while turning to conditions in Russia they note the rise of a new revolutionary movement. They then attempt to take stock of the revolutionary potential contained within the primeval communal relations of the Russian society:

‘Can the Russian obshchina, a form , albeit heavily eroded, of the primeval communal ownership of land, pass directly into the higher form of communal ownership? Or must it first go through the same process of dissolution that marks the West’s historical development? Today there is only one possible answer: If the Russian revolution becomes the signal for a proletarian revolution in the Wes , so that the two complement each other , then Russia’s peasant communal land ownership may serve as the point of deparure for a communist development.’(T.Shanin p139)

In 1983 Teodor Shanin published a ground breaking book called ‘Late Marx and the Russian Road: Marx and the peripheries of capitalism’, a collection of Marx’s draft sketches and letters dealing with questions posed by the development of embryonic capitalism in Russia.

In a letter addressed to the Russian populist writer Nikolai Mikhailovsky Marx explained his research: ‘In order to reach an informed judgement on Russia’s economic development, I learned Russian and then for many years studied official and other publications relating to the question’.(Shanin p135)   Marx also says that ‘I have come to the conclusion that if Russia continues along the pathway she has followed since 1861, she will lose the finest chance ever offered by history to a people and undergo all the fateful vicissitudes of the capitalist regime.’ Marx stated his thesis tentatively referring to the now hectic undermining by both Russian and foreign capital of the customs of the usually isolated communal villages.

What Marx seemed most eager to banish in the mind of his Russian populist reader was the idea that he had arrived at a general philosophical account of modern historical developments.  Marx’s letter was a response to a sympathetic review by Mikhailovsky of Capital Volume One, an appraisal that had ascribed to Marx a unilinear account of necessary historical development.

The Russian populist had said in the review that Marx:  ‘In the sixth chapter of Capital, the section called  So called Primitive Accumulation, here, Marx has in view a historical sketch of the first steps of the capitalist process of production, but he gives us something much bigger, a whole philosophical-historical theory. This theory is of great interest in general and especially great interest for us Russians.’

In his reply Marx is determined to say that he has no such general theory of historical development ‘The chapter on primitive accumulation claims no more than to trace the path by which, in Western Europe, the capitalist economic order emerged from the womb of the feudal economic order….Thus events of striking similarity, taking place in different historical contexts, led to totally disparate results.  By studying each of these developments separately, one may easily discover the key to this phenomenon, but this will never be attained with the master key of a general historical-philosophical theory, whose supreme virtue consists in being suprahistorical.’(Shanin 136)

The above is important for it distances the late Marx from some of his own more rigid conceptions as articulated in the German Ideology and from the common ‘historic Marxism’ thesis that what Marx was about was revising the Hegelian philosophy of History in a materialist direction. The idea that Marxism is a failed Universal Theory of History is still the predominant one in social science.

The other equally important point was that Russia and other pre-capitalist societies ought not to be conflated with Western feudalism. Marx was in fact researching various pre-capitalist societies that were not feudal in the European sense.  When he spoke of an Asiatic mode of production he was not using the construction in a geographical sense, for it included most of South America and even parts of North Africa, especially Algeria.  Marx was not even trying to describe the pre-capitalists societies in any historical-anthropological way.  What he was really interested in was how capitalist expansion was penetrating and transforming pre -capitalist societies that had no feudal past, in short the disruption being wrought by the advancing capitalist-colonialism of his own lifetime. (We do not say imperialism for this terminology was not used by Marx.)

Marx conducted his research using his normal method of reading the leading bourgeois authors and compiling excerpts from them with his own added comments.  He made extensive excerpts and notes drawn from authors such as: the pioneering anthropologists  Henry Morgan’s ‘Ancient Society’ 1877; the evolutionist John Lubbock’s ‘The  Origin of Civilisation and the Primitive Conditions of Man’ 1870; Maxim Kovalevsky’s  study of India ‘Communal Landownership, the Causes, Course and Consequences of its Decline’ published in Russian in 1879; the political historian Henry Sumner Maine’s ‘Early History of Institutions’ (1885); notes of sixteen thousand words on John Phear’s ‘The Aryan Village of India and Ceylon’ 1 1880 and Robert Sewell’s ‘Analytical History of India’ 1870.

Much of this material had to do with the communal and clan structures of the still prevailing pre-capitalist societies. Marx appropriated, albeit critically, these works.  He portrays Maine as an ideologue defending capitalism and empire rather than a genuine historical scholar.  He agrees with Kovalevsky’s arguments covering changes to the communal property forms in India but criticises him for sometimes conflating India with European feudalism.

Marx declares one maxim of his method as ‘One has to be on guard when reading the histories of primitive communities written by bourgeois authors. They do not even shrink from falsehoods. Sir Henry Maine, for example, who was an enthusiastic collaborator of the English government in carrying out its violent destruction of the Indian communes, hypocritically assures us that all of the government’s noble efforts to maintain the communes succumbed to the spontaneous power of economic laws!’ (Shanin 107)

Anderson, basing himself on notes by Kovalevsky, argues that, Marx created a typology of communal forms across many societies and made differing assessments of their durability.  The second theme in the notes and drafts is a comparison between Russia and other ‘Asiatic communes’. To be sure he had not worked out a theory of revolution for Russia or for the others he had studied; moreover he was careful to take note of the political independence of Russia as an important difference.

In respect of the potential for social resistance Anderson argues that of the several communal forms that he had studied, Marx thought they were not as resistant to elimination as those that were rooted in Russia. This was due more to the fact that most of the others had already been conquered by colonial capitalism.  Marx’s guess on Russia is best stated in this from a letter quoted in the Shanin collection: ‘What threatens the life of the Russian commune is neither an historical inevitability nor a theory; it is oppression by the State and exploitation by capitalist intruders made powerful, at the expense of the peasants, by this same State.’   

Anderson concludes by saying that he hopes that his journey into Marx’s writings on nationalism, race, ethnicity and non-Western societies has revealed the multidimensional character of his overall intellectual projects, especially in his later years. Marx’s critique of capitalism was far broader than is usually supposed.

Anderson has done this, though he may have talked more about gender relation.  He mentions differences between Marx and Engels on how they each made use of the findings of Morgan’s study of the origins of patriarchy but he does not develop it much.

There are just a few other points I would like to make that Anderson in his restraint refrains from making.

One point about historical materialism that springs to mind after reading Anderson’s book is that it is not a finished theory and has no pretension to be a finished one.  It must be open to new evidence and new experiences.  If it is taken up as a closed system it would only become a sort of repository of past societies, like a great city museum stuffed full of abandoned knowledge and artefacts.

Another point concerns the assessment of the idea of progress that inheres within historical materialism. The bourgeois ideology of progress is rampant and without qualification: capitalism always improves the world through its free production of commodities, its new technologies, its science and its legal and political forms.

In so far as there is an opposition to this bourgeois credo of progress it can take on more than one mask.  In our time the most forceful originates from the mind of the German philosopher F. Nietzche, who declares in his ‘The Anti-Christ’ of 1888 that ‘Progress is merely a modern idea, that is to say a false one.’  Nietzche was much more impressed by the knowledge and art of the ancient world than he was with the modern one, as are his most intelligent followers.

This is not the kind of opposition, said Marx, that the workers and oppressed of the modern world need, the opposition of reactionary modernism.  Yet the socialist movement in the broad sense has been damaged by the full embrace of the capitalist ideology of progress.  In the first instance, with the progressive Germany ideology of Social Democracy and the Second International, revolution was no longer necessary as steady progress was already happening under capitalist conditions.  This steady progress must we remind ourselves included an acceptance of progressive colonialism.

Then there was the progress of actually existing socialism, supervised by the Stalinist bureaucracy and its ideology of State controlled economic progress.  Soviet society was reputed to be one without social contractions

Yet Marx assesses capitalism and its progress under the auspicious of dialectical contradiction; all progress within capitalism is torn by irony, even the breakthroughs of science are bundled with contradiction.  Medicines are withheld by patents and the Internet technologies are distorted by corporations, to cite just a few examples.

When we speak about the dialectic we are in fact using irony rather than a special kind of logic. The use of dialectic was spoken about by Plato in his dialogues.  Socrates was the master of subjective irony.  When Hegel revived the use of the dialectic he tell us that he learned it by studying the dialogue by Plato called the Meno.

Marx is the master of something more than subjective irony, he is the master of objective irony, he found it especially in the capitalism-colonialism of his own time and the quotes I have picked out from Anderson’s study are replete with this objective irony.

Finally something should be said about the controversy over Marx’s occasional referrals to the Asiatic and feudal modes of production.  Marx in fact wrote more words about Asiatic society than he did about Ancient or Feudal society, yet in the official Stalinist literature it went unmentioned.  The Communists spoke of the slave owning, feudal and then capitalist modes of production but not the Asiatic. Why was all talk of Asiatic society covered up by the Stalinist ideologues?

The best known book on this is a tendentious one by Karl Wittfogel called Oriental Despotism published in 1957.  The book is tendentious because Marx stopped speaking about pre-capitalism societies in terms of Oriental Despotism at an early stage, and because it is doubtful Marx had developed an account of such societies to the point that he was confident in naming them as belonging to a separate mode of production; the societies were too various for him to make that mistake.

Finally the Stalinists did not censure the terminology primarily because it sounded more like a description of the despotic Soviet Union under Stalin but because referring to the feudalism of China or India or Vietnam facilitated an international politics of anti-capitalist revolution that conceded revolutionary leadership to a class of supposed ‘progressive capitalists’ who were an integral part of common national and democratic revolution directed against the colonists and a class of reactionary feudal landowners.  It hardly mattered that Marx thought these Asiatic societies were not feudal in the European sense.      

Kevin Anderson has produced an admiral book.

concluded