Monday, November 10, 2014

A Critique of Crisis Theory- a Socialist day school with Mike Treen

The following is based on talks given by Mike Treen, national director of the New Zealand Unite Union, at the annual conference of the socialist organisation Fightback, held in Wellington, May 31 - June 1, 2014, and a seminar hosted by Socialist Aotearoa in Auckland on October 12. 

The National Business Review reported a comment by our Minister of Finance Bill English on August 15 that he had occasionally pointed out in speeches to business audiences that New Zealand has had post World War Two recessions roughly every 10 years: in 1957-58; 1967-68; the mid 1970s; the mid 1980s; 1997-98 and 2007-8. He would observe laconically: “You'd think we would see them coming”

But of course bourgeois economists, commentators and journalists don't generally see them coming. One problem, however, is that sometimes the Marxist alternative sees them coming a little too often.
But it is a simple fact of life that capitalism has had economic crises on a periodic basis at least since 1825. Every 10 years or so, capitalism goes through a cycle of boom and bust. The following charts for the US economy illustrate this reality.

Capitalism also goes through historical periods where the industrial cycles of boom and bust are more pronounced one way or another. That is, capitalism goes through periods of several decades such as the post-World War II “Long Boom” involving multiple cycles where the upturns are relatively stronger than the downturns.
Similarly there are other periods such as the decades following the crisis of 1873 where the upward phases of the cycle are relatively weak and the downward phases more pronounced.
Understanding these cyclical fluctuations is also closely connected to another element of Marxist theory that is important to explaining what is happening —historical materialism – which is simply a way of viewing and understanding history.
Human societies, ever since we humans began generating a consistent surplus, have been divided into classes where each class is defined by its relationship to the means and mode of production. The legal, political, social, and cultural elements of society arise from this economic foundation.
The relations and modes of production, which determine how the economic system is produced and reproduced, have gone through various stages as technology and the forces of production have advanced. The main stages have been slavery, feudalism, capitalism and the beginning efforts to construct socialism.
Economic systems do not pass away until they have exhausted their progressive functions in terms of increasing society's productive capacity, which in turn enables population growth and cultural development. When the growth of the productive forces reaches a certain limit within the framework of the existing society, the question is posed: Can the fetters of the existing social relations be thrown off and a new society established?

Marx's answers
Marx devoted his life to answering this question in relationship to capitalism. This was THE question from his point of view. Decades of research, decades of writing, decades of reflection—in between throwing himself into labour struggles and the odd revolution when they were happening. But he always returned to this basic task.
The key questions were understanding why capitalism operates the way it does and whether capitalism is a historically limited system—whether it will reach a limit and need to be superseded. Marx's answers are to be found in his writings, especially his great work known as “Capital”.
Our inability, so far, to supersede capitalism on a world scale means that periodic crises return again and again, each one causing great hardship while giving a powerful impetus to the centralisation of capital and the growth of monopoly domination.

The system's dependence on relentless expansion over time and its inherent drive to maximise profit rather than meet human needs means that we now face the incompatibility of this system with our coexistence with mother Earth.
That has become an element of crisis theory in the broader sense—demonstrating the increasing incompatibility between a livable environment and the way the system is organised through private property and ownership.

The crises, therefore, tend to get bigger, more prolonged, and more socially destabilising. I think we have entered with the 2007-08 world recession a new period like that.

But there is no final crisis in this system—other than a descent into nuclear war, or barbarism arising from the sort of ecological winter or runaway ecological collapse that capitalism appears to be preparing for us. Short of such a disastrous outcome, the system will continue to carry on with its booms and busts until it is overthrown and replaced.
That can only be carried out by a conscious social and political force, by a class that is not bound to the system by material interest. That is why the working class is the only class that can overthrow this system. It is the only class not bound by property and profit to its perpetuation. It is the only class with the numbers and social power, if organised, if conscious enough, to effect this outcome and bring about real majority rule.

Marx's challenge
The problem faced by Marx was that the challenge he took on in his writing of “Capital” was so daunting that all we got during his lifetime was the first part of a planned six-part work.
Marx published a Volume 1 which was part of his planned first volume in several editions. Engels, using Marx's notebooks, produced what we know of as Volumes 2 and 3 after Marx's death. Then there was the “Theories of Surplus Value”—a part of a rough draft of a history of economic thought. All of that was originally going to be the first volume of the planned six-part project.

There were to be additional volumes on wage labour, the state, the world market and competition. The entire work was to culminate in the volume on the world market. It was there logically that crises were to be dealt with in a systematic way. Marx does not deal with crises except in scattered references, mostly in Volume 3 of “Capital” and in his correspondence.

Marx's method was to begin at the most abstract level before moving progressively to the more concrete. In “Capital” he begins with the abstract categories of the commodity and value and moves through to the formation of prices and the role of money and the market.
He goes on to explain the origin of profit in surplus value and ties this all in with the origin of capitalism in what he called “primitive accumulation”. Systematic treatment of things like exchange rates, world trade and so on were to come later.
There was an added problem with what we know as Volume 2, published after Marx's death. Volume 2 is actually more a volume about how capitalism works rather than how it doesn't. Marx explains how capitalism must be a system of expanded reproduction and he presents formulas to prove that is how it must exist and in a sense how it can exist.
There was a certain consternation and debate inside the socialist movement when Volume 2 was published. The revolutionary ideas of Marx and Engels were already under attack within German Social Democracy, the German workers party at the time, which was led by followers of Marx and Engels. Volume 2 was used by critics of these revolutionary ideas to “prove” that capitalism worked and could last indefinitely—in support of the views of the reformist wing of German Social Democracy led by Eduard Bernstein.
Because the cause of crises wasn't fully spelt out in Marx and Engels' work, revolutionaries like Rosa Luxemburg started to look for explanations for why crises happen that didn't quite fit in with the logic of what Marx and Engels had written. She looked at the exhaustion of the world market. Others looked at things like the tendency of the rate of profit to fall, which was viewed as a long-term historical tendency by Marx.
This logic can be deduced not only from their major economic works but also from their journalism and correspondence where they wrote about and analysed actual crises until Marx's death in 1883 and Engels' in 1895.
Capitalism has also changed significantly since Marx and Engels wrote. These changes need to be incorporated into our understanding of crises. The system has evolved from industrial capitalism based on free competition to monopoly capitalism.

We have been through the Great Depression of the 1930s. We have had the experience of the “Keynesian revolution”. We have had the Friedmanite counter-revolution and the debates in economic theory around that.
We have had an end of the international gold standard, a very important event. We had the stagflation of the 1970s, and the neoliberal turn in the 1980s, which continues.
Most recently, we have had the global “Great Recession” of 2007-2009, followed by an unprecedentedly weak recovery, anaemic at best for most of the world.

We can expect to be going into a new downturn in a few years' time, which could turn out to be even worse than the last crisis.

Conflicting crisis theories
Marx had identified the essence of the periodic crises of capitalism as crises of overproduction very early on, even in the Communist Manifesto in 1848.

I am emphasising this because there has been a retreat from this analysis including among followers of Marx. In fact the two main schools of Marxist crisis theory today are not schools based on periodic overproduction crises.
One school is based around the primacy of the tendency of the rate of profit to fall (TROPF). Marx introduced this idea in Volume 3 of “Capital” as an important long-term historical tendency in capitalism. Marx also pointed out many counter tendencies, but over long periods the tendency is true. Many Marxist economists use that important theory as the primary explanation for why capitalism has crises.
This school of thought is associated with the US academic Andrew Kliman, and British theorists from the Trotskyist tradition including the British SWP leader Alex Callinicos and the prolific blogger Michael Roberts. All three writers deserve to be read, and there is much to learn from their writings.
But the almost monomaniacal attachment to the TROPF to explain crises leads them astray.
Michael Roberts even tries to explain the 10-year cycle under capitalism as a result of the fall in the rate of profit. It is of course true that every crisis is associated with a fall in the rate of profit, but that temporary decline is a result of the crisis not the cause.

Callinicos seems to deny the real growth of capitalism since the 1980s. Because the early 1980s crisis must have been the result of the TROPF, and since there has been no counter tendency big enough to overcome the falling rate of profit sufficiently, the crisis must be permanent. However, the world economy has more than doubled in size in that period, and we have seen an explosive growth in capitalist production in China.
The other significant school of thought is associated with the US Monthly Review magazine and its editor John Bellamy Foster. Foster is an important writer on economic matters for the magazine as well as being a leading theorist on the relevance of Marxism to understanding the ecological challenges of today. The Monthly Review school is very influenced by Keynesian ideas. John Maynard Keynes was a pro-capitalist economist who became very influential in the wake of the Great Depression of the 1930s.
Traditional bourgeois economic theory denied that capitalism could have crises. Keynes, looking at the crisis of the 1930s was forced to acknowledge the reality staring him in the face – that capitalism can have crises and in fact it seemed to him to have a tendency towards stagnation But he believed the state could intervene to greatly alleviate crises if not eliminate them altogether.
So from a Keynesian point of view you do not have a crisis of overproduction relative to monetarily effective demand, determined ultimately by the existing size and rate of growth of the global hoard of the money commodity—gold.

Rather, with Keynes you have a crisis of under-consumption that can be resolved by the state stepping in to purchase goods directly or printing money to give people to spend themselves and/or using government deficit spending to put more money into the economy. Part of the reason Keynes favoured ending he gold standard was to allow this to happen more easily.
Overproduction as the underlying cause of crisis which is based on Marx's concept of money as the universal equivalent has been, especially since the end of what remained of the international gold standard in 1971, all but forgotten including by most of those claiming to be Marxist.

System requires measure of value that is itself a commodity
A central part of Marx's perfected labour theory of value was that it requires—as does commodity production as a system—a measure of value that is itself a commodity.

Ultimately, gold emerged as the main money commodity because it is durable, contains significant value (amount of abstract human labour measured in units of time) in a small quantity, and is easily divisible. It can only be a measure of value, however, because it has value as a product of labour itself, measured by its monetary use value in units of weight.
The pro-capitalist alternative to that theory, as well as to Keynesian under-consumptionism, is dubbed Say's Law—an economic principle of early “vulgar” economics named after the French businessman and economist Jean-Baptiste Say (1767–1832). Marx dubbed them “vulgar” economists because they had ceased to seek a scientific explanation for what was happening and instead provided simple apologies for capitalism and its laws.
Say stated that production creates its own demand. Commodities are bought with commodities. Money plays no particular role except as an intermediary.

This idea, combined with marginalism—the theory that commodities have exchange value because of their scarcity relative to human needs—tries to banish the labour theory of value by claiming things have value due to their marginal utility and that generalised overproduction of commodities is impossible.
Essentially, this is a subjective rather than objective theory of value. Marginalism, which assumes Say's Law either explicitly or implicitly, was the end of bourgeois economics as any form of science. All bourgeois economics today is built on these two theories and can't escape them.
The abolition of the gold standard has created very real problems with the modern US dollar-based international monetary system, with permanent inflation, regular exchange rate crises and so on. Following the Bretton Woods monetary conference in 1944 up to 1971 when Nixon took the dollar off the gold standard money in everyday use nearly always had a legally fixed relationship to gold via the US dollar.
You could go to a central bank and demand a certain amount of dollars for your currency, which in turn would represent a specific amount of gold, backed by the bullion hoard in Fort Knox.
Prior to 1933, individuals as well as countries could demand gold for their paper U.S. dollars. After 1933, up to 1971, foreign governments and their central banks—but not individuals—could do the same.

But after the gold standard was completely abandoned, there was an assumption on the part of many Marxist economists that maybe Keynes was right on one point. Maybe now you could just create money at will. The state had the power not just to create tokens representing gold but create currency at will with no relationship to gold—now supposedly “just another commodity” like all others with no special role..

A big mistake
I think that is a big mistake. Ultimately, all non-commodity money—that is, token money and credit money—must have a relationship to a real money commodity like gold. This is true whether a formal gold standard exists or not. This lawful economic relationship still exists and therefore continues to be the underlying cause of crises of overproduction.
When they started to print money at will, in the 1970s, when Nixon said, “We are all Keynesians now”, what you ended up with was a severe bout of inflation as printed money lost value and lost its fixed relationship to the money commodity, which remained gold.
The “price” of gold surged—that is, it took more and more tokens to represent the same amount of gold. Monetary tokens were being devalued, and inflation was the inevitable result.

Engels (and Marx) on overproduction crises
The nature of a crisis as an overproduction crisis was spelt out by Engels in 1873.
Engels was a remarkable man. He worked managing his family business in Manchester for some decades operating as a capitalist in the textile trade. He did that so he could keep his friend and intellectual partner free to work on “Capital”. He hated what he did.
Engels was a brilliant man but he knew there was one person—Karl Marx—who alone at that time was both willing and able to carry through the critique of bourgeois political economy. Engels was willing to do whatever was necessary to enable Marx to work. The correspondence of Marx and Engels is extraordinarily rich in political and economic analysis.

Engels begged Marx to get on with the task of writing the book. Marx promised again and again that it was just around the corner. There came a certain point in his life when Engels could give the business up, and there is a wonderful letter where he expressed his joy at being liberated from his role as an industrial capitalist.
Engels did a lot of writing in defence of the joint views of Marx and Engels. On of his major works was a polemical work in 1877 called “Anti-Duhring” against a then fashionable but now obscure German professor that became an exposition of the mature views of Marx and Engels on a broad range of political, historical, philosophical, and economic ideas.
By this time, all of Marx's major economic concepts had been developed. He even wrote a chapter of “Anti-Duhring” himself. For those attached to the TROPF it is not mentioned once as a cause of crisis. However they did write an important paragraph summarising their joint views on the origin of crises under capitalism. It reads:
We have seen that the ever-increasing perfectibility of modern machinery is, by the anarchy of social production, turned into a compulsory law that forces the individual industrial capitalist always to improve his machinery, always to increase its productive force.
The bare possibility of extending the field of production is transformed for him into a similarly compulsory law.
The enormous expansive force of modern industry, compared with which that of gases is mere child’s play, appears to us now as a necessity for expansion, both qualitative and quantitative, that laughs at all resistance.
Such resistance is offered by consumption, by sales, by the markets for the products of modern industry.
But the capacity for extension, extensive and intensive, of the markets is primarily governed by quite different laws that work much less energetically. (Emphasis added)
The extension of the markets cannot keep pace with the extension of production.
The collision becomes inevitable, and as this cannot produce any real solution so long as it does not break in pieces the capitalist mode of production, the collisions become periodic.
Capitalist production has begotten another ‘vicious circle’.
The problem is Engels didn't spell out what these laws are that govern the capacity for growth of the markets and why they work much less energetically.

But he spells out that he see the cycles of capitalism and the crises they produce as a periodic collision of two counterposed forces—the physical ability of capitalism to use modern science and technology to expand production without limit, and the different, less energetic laws governing the growth of the markets.

Laws governing growth of markets
The laws that govern the growth of markets are connected to the role of the money commodity as a measure of value and periodic changes in the relative profitability of gold production versus the production of other commodities.

Gold is both the universal equivalent, the measure of value, and a commodity in its own right. Therefore its production remains key to understanding the laws of capitalism that determine value, price and profit.
But if you look at the history of capitalism there is a peculiarity about gold, because it is the ultimate measure of value, that production of gold tends to move counter cyclically to overall commodity production. So when there is an overall boom in production in society gold production tends to decline and during overall depressions in society, gold production tends to increase. This is an important mechanism for regulating capitalism.
As prices in gold terms (in weights of gold) rise during the rising phase of the industrial cycle, gold's purchasing power falls, gold production becomes relatively less profitable, and capital flows out of that sector, gold production slows, interest rates rise as money becomes tight, and the boom ends in a crash.
When prices in gold terms fall sharply in a crisis, gold's purchasing power rises, gold production becomes relatively more profitable, and capital flows into the sector causing gold production to rise, adding to the growing idle money hoard resulting from the crisis itself, pushing down interest rates, and the economy recovers.
The capitalist system seeks to escape the limits of monetarily effective demand by, as Marx explained some 150 years ago, expanding credit. But credit cannot, even with all the miracles performed by modern computers today, expand forever. In the end, the debt must be serviced—interest and principle paid—and eventually the game is up. Interest rates rise during the boom (overproduction) phase of the industrial cycle, credit collapses and another crisis is born.

'Critique of Crisis Theory' blog
In the last two years or so, I have been working with a small group of Marxists in North America who are doing a blog focused on economics that I highly recommend. It is called “A Critique of Crisis Theory”. What I have been explaining are essentially their ideas.
The first 40 or so posts of the blog are being turned into the draft of a book. The author of the blog, Sam Williams, and his collaborators have been working on their economic ideas for some decades. The creation of the Internet has allowed these ideas to be shared with a much wider audience than was possible before.
More recently, Williams has been responding to new developments and discussing with others who have engaged or critiqued his ideas.
I tried to critique his views on an aspect of economic theory I thought I had some familiarity with—productive and unproductive labour.
Classical economists and Marx recognised that not all labour performed was productive of value and surplus value. We can see this easily when we look at the “labour” of a policeman, priest or soldier versus the labour of a miner or factory worker. I think we can identify who is a productive worker in that picture.
It gets a more complicated when we look at the labour of bank workers and retail workers whose labour may or may not be necessary for production to occur. It gets even more complicated when we look at workers in health and education who may be employed in a private business producing a profit for the capitalist. Anyway that is the area I wanted to discuss.
Sam was patient in his responses and took the time to respond to my first questions in a very pedagogical way.
Then when I wrote back still disagreeing, he wrote an even longer and more thorough response that included a reference to Einstein, who, he said, proved that matter and energy are different forms of the same thing, just as physical goods and “non-material” services can both be commodities embodying labour value. That sealed the issue for me and I conceded that they had a far better understanding on this issue.

What I found by following the blog was that it appeared to answer many of the questions and doubts I had from my own reading of Marxist economic theory which has been an interest of mine though I am no “expert” which I will come back to. From a young age I had been very interested in Marxist economic theory. Initially I had been quite strongly influenced by a prominent Belgian Marxist economist by the name of Ernest Mandel. Much of what he wrote remains useful.
Mandel hints at the continuing importance of the role of gold as the money commodity in some things he wrote in the 1970s. He played an important role in analysing the “long waves” of 40 or 50 years' duration that appear to be a feature of capitalism, which I believe is correct.
The Critique blog author also believes long waves play an important role and provides an explanation for a long cycle based on long-term swings in gold production, which makes the argument for its importance even more powerful.
Another fine economist (Anwar Shaikh) who knows his Marx and supports an understanding of the history of capitalism involving long waves has produced a graph that supports the Critique of crisis theory on this point. He follows the long term movement of wholesale prices in the Us and the UK.

He shows in his graph that there is a movement in wholesale prices upwards during a period of the long wave that is dominated by strong upturns in the business cycles and trend downward in prices during a period of the long wave where business cycles are dominated by the downward phase of the cycle. The decline in wholesale prices is associated with a period of stagnation or long depression under capitalism. So we have the 1873-1893 decline, the Great Depression of 1929-1939, the Great Stagflation of 1967-1982 and a similar decline which he argues indicates a new Great Depression beginning in 2008.
To produce an accurate version of the graph he needed to measure the prices in terms of gold since in the period since the abolition of the gold standard there has been a permanent inflation in paper money prices that hides the real movement of prices in gold terms
This fits very closely with the Critique of Crisis Theory blogs view. This is summarised well in a recent blog which argues that:

As the production of money material declines, the quantity of money grows at an increasingly slow rate relative to real capital—productive and commodity capital. As a result, credit increasingly replaces money, eventually stretching the credit system to its limits.
Money becomes tight and interest rates rise. This situation, assuming capitalist production is retained, can only be resolved by a crash or a series of crises and associated depressions of greater than average intensity, duration, or both.
One result of a crisis or series of crises of greater than usual violence or duration is a lowering of the general price level—measured in terms of the use value of gold bullion—once again to below the value of commodities. This makes gold production and refining industries more profitable than most other industries.
Capital once again flows into gold mining and refining, causing the production of gold bullion to rise once again. The quantity of money then expands with low interest rates and “easy money.”
As the process of liquidating the previous overproduction goes on, especially of those commodities that serve as means of production, the accumulation of (real) capital stagnates. As a result, for a period of time, money capital is accumulated at a faster rate than real capital.
But once the accumulated overproduction—especially in the form of surplus productive capacity—is liquidated, a new “sudden expansion of the market” occurs leading to a series of industrial cycles dominated by the boom phases rather than the crisis or depression phases.
This “long cycle” is built into the commodity foundation of capitalist production and is the inevitable result of the commodity form itself once it is fully developed.
But this cycle is also affected by accidental events such as discoveries of rich new gold mines and technological improvements in gold mining or refining that can either weaken or reinforce it depending on circumstances, as well as by such “accidents” as wars and revolutions.

So history is not an automatic repetition of cycles but a complex process involving both chance and necessity.
Williams and his collaborators are very orthodox in demanding a return to Marx on the nature of capitalist crises as crises of the general overproduction of commodities, as well as incorporating major developments of the capitalist system in the 150 years since Marx and Engels wrote and incorporating it into a better way of explaining what is happening today.

An important contribution
The Critique of Crisis Theory blog is making an important contribution to Marxist economic theory today. The blog is getting thousands of page views a month and becoming influential in Marxist economic debates. It is getting the recognition and respect it deserves.
The world reality we face today is conforming to the central theses of the blog. The 2007-2009 crisis more than any since the 1930s was clearly a global crisis of overproduction. There were simply too many houses, too many cars and so on. Of course “too many” from the point of view of being “too many” to be sold for a profit not in terms of human need.

Can't leave it to 'experts'
I think we all should pay respect to the founders of scientific socialism and give this issue of crisis theory the attention and importance it deserves. We cannot leave it to others, to so-called experts.

I am not an “expert” on this stuff. It has been a continuing interest of mine, because it is important that we understand it and because it is important we understand who we are, what our role is, what we expect will happen to this system, who the agent of social change is going to be, and what the prospects are for making that happen in the world today. Those are all issues we can begin to address.

Wednesday, November 05, 2014

TPPA, bad for your health?

Is the Trans Pacific Partnership Agreement (TPPA) the biggest threat to our democracy in a generation, or is it really going to be everything the government says it will be? As a nurse working in the New Zealand health care system, this is an issue that will impact on the way healthcare will be delivered for New Zealanders. It's important to look at the issues the TPPA raises with a critical eye so we can confront the corporate agenda with an informed argument.

The Trans Pacific Partnership Agreement (TPPA) is a regional trade agreement currently being negotiated by 11 Pacific Rim countries, excluding China. To put it in context, the countries involved include 10% of the worlds population and their economies account for 30% of global gross domestic product (GDP). The negotiations are now in their 10th year and while the negotiations are being conducted under a veil of secrecy, substantive leaks over the past 4 years have revealed a broad view of the proposed content. Citizens of the involved countries are actively excluded from the negotiation, although many senior corporate executives and their representatives are active participants. Even the US congress; the elected officials of the most powerful country on the planet, have only recently been given limited access to the interim proceedings of the TPPA. This is not acceptable. We have the right to know about significant changes for New Zealand, and to have a say about it.

The stated goals of the TPPA are to improve the exchange of goods and services, enhance global industrial vertical integration and enlarge the scope of intellectual property protection. However from the leaks that have been made available, it is clearly much more than this. The dictates of the agreement, in all but name a treaty, could, for the most part, override national guidelines and regulations in the corporate arena that pertain to health. The regulatory structure embedded in the TPPA withdraws jurisdiction from national judicial systems and puts it in extraterritorial tribunals designed to favor trade/corporate interests.

The fact that this agreement is being negotiated in secret should raise alarm bells. Its content will not be disclosed to the people of New Zealand and the New Zealand Parliament until after it has been signed, by which time the terms will have been agreed among the twelve participating countries. In addition, it is understood that the United States of America claims the right to decide whether New Zealand has altered its laws to comply with the Trans-Pacific Partnership Agreement and to require further changes to our laws if they have a different interpretation of New Zealand’s obligations.

It is difficult to accept assurances from the former Minister of Health that health is high on the agenda of TPPA negotiators when there has been so little public health representation in the negotiation process. Whereas hundreds of US corporate advisors have been granted access to negotiation drafts of the TPPA. Independent health advisors, including representatives from the WHO, have effectively been excluded. But the muzzling of health policy is probably even more concerning. Under the TPPA, foreign investors would be able to sue the Government if changes to health policy affect an investment, say significantly reducing expected profits. The TPPA would for the first time expose the NZ Government to possible Investor State Dispute Settlement (ISDS) lawsuits from transnational corporations based in the USA. US companies have an extensive track record of aggressively pursuing claims under existing trade agreements. The director general of the World Health Organisation Dr. Margaret Chan calls this "handcuffing". In practice, even the threat of action can have a handcuffing effect. She goes on to say;

"One particularly disturbing trend is the use of foreign investment agreements to handcuff governments and restrict their policy space... In my view, something is fundamentally wrong in this world when a corporation can challenge government policies introduced to protect the public from a product that kills."

In Canada, where they are subject to the terms and conditions of NAFTA and other 'free trade' deals, all new health laws must be screened to make sure they are compatible with trade agreements. In New Zealand, action on plain packaging of cigarettes has already been delayed; we're waiting because a tobacco company is suing Australia.

As it stands the TPPA poses serious risks to global public health, particularly chronic, non-communicable diseases. At greatest risk are national tobacco regulations (such as plain packaging), regulations governing the emergence of generic drugs and controls over food imports by transnational corporations.

The way in which the TPPA will affect generic drugs are through greater corporate access to Pharmac. Pharmac is very successful in doing what it was set up to do: making medicines more affordable. Pharmac is the national medicines purchasing agency that has achieved the greatest success anywhere in the world in balancing the health interests of people and communities against the business interests of big medicines companies. Pharmac is under attack by the pharmaceutical industry because it is successful, and the ‘Pharmac model’ is being adopted by other countries needing a better balance between business and health interests. Pharmac purchases medicines for New Zealanders at prices around half those achieved by Australia’s medicines purchasing agency and around a third the price demanded in the US. Yes, this is painful to the medicines industry but it means huge savings for the New Zealand health sector.

With greater access to Pharmac, pressure on the nation's health budget would escalate because of delayed introduction of generic medicines, longer exclusive protections for expensive new cancer and immunosuppressant medicines and weakening of Pharmac. Medicines would become less affordable overall.

Under the TPPA, we could effectively forfeit our right to make sensible laws. Instead, foreign investors would be given a powerful new lever to delay sound new health regulations for their own commercial interests. Good public health policy should respond to new evidence. Lead paint was used for many years before the health risks to young children became undeniable; until recently synthetic cannabis-like drugs were sold over the counter in NZ; and thalidomide was initially sold without prescription to thousands of pregnant women before leading to death and serious deformity in thousands of children. As evidence of harm accumulated, governments brought in controls. 

These examples illustrate why New Zealand's freedom to modify regulation based on the ‘precautionary principle' must not be undermined by the TPP. Indeed, even when the evidence of harm is substantial, industries such as Tobacco have a long and consistent history of systematically undermining and legally contesting the available scientific evidence, aiming to ensure that the benefit of any doubt is given to their own commercial interests rather than health.

Concern about the TPPA is not just a fringe Left concern, warnings are being sounded across the spectrum. This was expressed succinctly by the Nobel Prize winning economist, and former Chief Economist of The World Bank, Joseph Stiglitz, in the New York Times earlier this year:

“There is a real risk that it (the TPP) will benefit the wealthiest sliver of the American and global elite at the expense of everyone else”

“Corporations may profit (from the TPP), and it is even possible, though far from assured, that gross domestic product as conventionally measured will increase. But the well-being of ordinary citizens is likely to take a hit.”

The TPPA represents the biggest corporate power grab in a generation and its implications for health will be widely felt. Resistance to the TPPA needs to come from all angles before it's too late. Talk to your workmates, inform yourself, attend one of the many protest actions, organise one yourself. The fight isn't over.

Organise, Agitate, Resist.

See you in the streets.
Nico, SA.

Look for events happening nationwide this saturday as part of the international day of action here

Monday, November 03, 2014

Privatisation of HNZ housing

I'm not opposed to house owners wanting to sell their homes, but I do oppose any sale of state owned houses, being sold against the support of the majority. These are assets that have been built up over generations and belong to us, the people of NZ.
When the Government decides that they no longer wish to hold the responsibility of housing its constituents that are in need of this very necessity, then we have a problem that can very quickly turn into a major disaster, for many of the most vulnerable in our society who have been the tenant/s and in some cases the tenant for many years in these houses, which they have come to consider as their home.
Along with this decision to sell comes the stress, strain, and unbearable pressure put on the most needy. Their families to have to cope with this upheaval and with no thought given to the consequences of such a decision. Eviction notices, moving away from your community, children changing schools, sports clubs, churches are but a few of the major changes being heaped on these tenants affected. For some like our elderly it has proven to have been just too much to bare and who have sadly passed on since being moved from their home in Glen Innes where this very unjust action is taking place right now.
As a home owner who has lived in this vibrant community for over 35 years I am saddened by what is taking place here and I stand firm in my commitment to support the HNZ tenants in this community and their struggle to try and stay in their homes. 
The National government relieving itself of its responsibility to house those in need and the selling of our state homes is effectively privatising state housing. Where is the protection for not just the present HNZ tenants but all future tenants. Passing this responsibility onto other social housing providers whether they be churches, Iwi groups, or the Salvation Army leaves little or no real safe guard for anyone who may need help when it comes to housing. Privatising the housing sector just means yet another avenue for the filthy rich to get richer yet again at the expense of the most vulnerable.
We the people of NZ need to stop this in its tracks before it becomes the catalyst for all of this governments duty of care for its citizens.
Lisa Gibson

Tuesday, October 21, 2014

2014 Elections and the Revolutionary left.

The latest round of New Zealand parliamentary elections (2014) have smashed all hopes of a centre left government in New Zealand, with Labour polling it's lowest result in nearly 100 years. Worse, Internet MANA has only very slightly increased it's party vote and is left with no parliamentary representation after the defeat of Hone Harawera at the hands of a "grand coalition of the willing". This defeat throws up some serious questions about why the left was unable to convince the mass of workers to vote, and more importantly for revolutionary socialists, why Internet MANA performed so poorly.

A recurring theme to the defeat of Internet MANA within the mainstream media (MSM) and within  many left circles, is that Kim Dotcom was the kiss of death to the nascent MANA. That for all it's good intentions, MANA, courting a sort of political kryptonite, lacked the power or initiative to overcome this theme, and was irredeemably corrupted. This narrative however is just that, a narrative, and one driven by a bourgeois MSM exclusively directed by the morals of the ruling class. It makes no attempt to explain the underlying material conditions which; 
1. Drove the working class to vote according to the interest of the bourgeoisie.
2. The historical events which propelled MANA and Dotcom into an unlikely alliance.

I will deal with the second first as it will be most familiar to those who are up to date with current affairs.

Kim Dotcom and MANA.

Kim Dotcom arrived in Aotearoa under the guise of an 'investor', despite the objections of state agencies involved in the vetting of prospective new migrants, his residency was approved.
Immediately after this period Dotcom set about ingratiating himself with the most radical parliamentary representatives of the capitalists, primarily the Act party. However under significant pressure from U.S monopoly capitalists, whom Dotcom threatened through his file sharing business. The New Zealand government launched an illegal raid under the supervision of U.S authorities. Dotcom was arrested and his property confiscated, threatened with extradition and a very long prison sentence in the U.S. Dotcom appealed to his political allies, but they were not interested in launching a struggle for the independence of New Zealand capital from U.S imperialism which had benefited them so well.

As legal proceedings began, to fight the extradition process, Dotcom found that support could be gained from the far ­left; Progressives, who argue the "rule of law" must be upheld; Maori and other political activists due to the experiences of the Ureweras and; Revolutionary socialists, in opposition to all oppression as 'tribunes of the people' offered Dotcom wary support. Dotcom revelled in the celebrity his money had been unable to buy, even if it was more so notoriety. The various but shared experiences of the factions allowed for a connection between Dotcom's oppression, as well as that endured by the governments political opponents, workers, Maori and beneficiaries; groups heavily associated with MANA.

In due course a more formal alliance was proposed between Dotcom and MANA, one which would couple Dotcom's still significant wealth with MANA's militancy. This was a tumultuous process in itself and caused several prominent activists to depart in protest at the prospect of this alliance. Many socialists including myself were deeply sceptical of the proposed benefits of an alliance. However revolutionaries must not shirk from using the capitalists own tools against them, and once an alliance became obvious, most quickly ditched sectarianism to best aid the struggle, though not without ongoing criticisms. The alliance consisted of two party’s, which in practice continued to develop separate policy and candidates, though with a shared party list. MANA would undertake much of the activism and provide the crucial Te tai tokerau seat, allowing both parties to circumvent the 5% party vote threshold.The Internet party brought a 'broader' appeal as well as significant funding for joint advertising and within Hone's crucial electorate seat.

Initially this alliance proceeded smoothly and Internet MANA's position in the mainstream polls rose. A number of capitalist representatives, notably John Armstrong, began to panic fearing that the significant 5% point may be reached. The bourgeois media rapidly assembled a counter­campaign, one which drew on many of the productive villanies of capital, notably whipping up racist anti german sentiment. Dotcom's character was relentlessly assaulted, his political aims were described as driven by nothing more than the basic desire for vengeance. However these were never qualified as stemming from his prior treatment by the government. The media were also careful to conflate at every opportunity Dotcom and the MANA leadership, despite Dotcom holding no position within the MANA movement. Dotcom became in their description, a "puppet master" manipulating parliamentary politics for personal purpose, though what this purpose was other than promoting MANA's policies of full employment and social housing, the media never qualified. When the media's opinion of the parliamentary process is so low, that it believes it able to be manipulated by a wealthy individual is an irony not lost on socialists.

MANA for it's part was denounced as a compromised sellout, having committed the treachery of selling the poor for 30 pieces of silver, to be crucified upon Dotcom's ambition. The facts however remain, MANA changed none of it's policies, and was clear about the nature of it's relationship with Dotcom, which was spoken of in detail at Internet MANA road shows up and down the country. Other political parties hid their donors in the darkness, refusing to discuss them or their influence on party policy. Those who did surface were often revealed to be embroiled in scandal of favouritism and jobism; Judith Collins and Orivida being prime examples. The hypocrisy of this situation was  razorsharp, MANA candidate John Minto noted;

'Objecting to big money donations for political parties has never been such an issue until a left­wing party got big­ money backing with no strings attached. No mention of the critical diet of business donations which keep Labour and National afloat – just outrage that a group prepared to challenge corporate rule might be well funded for an election campaign to do so'.

This is of course true, for the bourgeois media to cast the light into the dark dealings of party ­donor relations, would have revealed connections between donations and advertising spending as originating from the same sources. The corrupt nature of the political parties would have been revealed to be the same conditions for the corruption of the mainstream media; the buying of opinion and the silencing of scrutiny, bought and sold like any other commodity, profit being the basis for the bankruptcy of the media. Internet MANA's clear relationship with Dotcom threatened the necessity of their own secrecy.

Internet MANA's alliance, despite moral arguments, was one clearly within the material interests of both parties. Just as the donor ­party relationships of other parties are in their self interest. The intolerance of MANA came from their ability to remain committed to their anti­capitalist programme, where other parties, under pressure from wealthy donors, would have "reformed" their policies to oblivion.

Where have all the voters gone?

But why did voters not turnout for Internet MANA or the left in general? This is a most complex question but must be answered in an objective manner. Petty interpersonal relationships though important are adrift on powerful historic forces. The last global financial crisis (GFC, 2008) and it's lasting impacts have had a titanic influence. The recovery from the GFC has been torturous for capitalist society, the normal rapid recovery and restoration of profitability historically experienced by capital, have instead been weak, crisis prone and localised. One of those locations where  performance has been stronger than average is New Zealand. The apparent strength of the recovery has lent credence to the ruling National party’s claims to be "the best managers of capital".

However, relative strength of the recovery is also leading to the relative strength of contradictions underlying crisis, which will lead to the next crisis being far more pronounced in New Zealand. This relative stability of New Zealand capitalism has meant that while neo­liberalism still reigns supreme, the conditions of austerity imposed elsewhere have been avoided. Largely funded by government borrowing, made possible by a tsunami of quantitative easing in the U.S.A etc, the National party has even increased the minimum wage. Thus they have been able to portray themselves as 'relatively moderate' while pursuing policies of privatisation and environmental degradation. This has also allowed the media and the National party to frame a narrative of looming economic catastrophe if ever their "slightly" left opponents were to come to power. It could be worse, is essentially their argument, even as they help lay the groundwork for a new and larger crisis.

Their primary opponent on the left, Labour, is meanwhile still racked with internal contradictions the GFC brought to maturity. Gordon Campbell pointed out; 
'On first becoming leader Cunliffe had talked of how the GFC had made Third Way economic policy passé – which was a dog whistle that under his leadership, Labour would make a definitive break from the economic policies that have devastated Labour’s core constituencies from 1984 onwards. That change in policy direction didn’t eventuate.'

Labour, now primarily a party serving the interests of a bureaucratic elite competes with National as capitals "best manager". However the GFC has opened up a new awareness and language on the nature of capital within the working class. Labour hoping to harness this and under pressure from a emboldened membership. Elected a more left­wing leader than was the course, but no substantial changes to the actual members of caucus which constitute the party were made. The result has been paralysis and dysfunction, revealing that third way politics have only ever been a fig leaf to disguise the naked slavering horror of capital. Unable to deal with it's own internal contradictions and with a policy platform which reflected this; i.e. raise the minimum wage as well as raise the retirement age, the party was pointed to as an example of the dysfunction of the "Left".

Internet MANA however presented a more unified front, even if they had interpersonal differences, the candidates of both parties interacted well and made few mistakes. The movements rank and file also excelled in both leading and supporting protest action. Notably during the protests against the Israeli attack on Palestine (the biggest in New Zealand history), MANA leadership supported this action and the party appeared unified. The weakest link was Kim Dotcom. Newly exiled from the capitalist class and dipping his toes into the lake of working class politics, he was Internet MANA's Achilles heel. Politically inexperienced and due to his contradictory position between bourgeoisie and proletarian ideas, and engaged in a popularity contest with John Key. Dotcom was prone to mistakes of the same sort evident in Labour. Combined with the other mistakes made in the forming of the internet party, his prominent role, a lack of democracy, etc., this cast doubts on the cohesiveness and resolve of Internet MANA, and conflated them with the dysfunction in Labour.

These problems, although serious, were not the death blow to Internet MANA. This came in the form of a "grand coalition of the willing", in which all political parties co­operated in order to instruct voters not to vote for Internet MANA. It is important to not diminish the importance of this sole act of co­operation amongst the political parties, media and business during the election campaign. This opposition positioned the combined forces of capital against Internet MANA. The warning was clear, Internet MANA in parliament would have to fight the combined forces of the bourgeoisie. The New Zealand Heralds, "The mood of the boardroom" even described Internet MANA as "Dangerous radicals". The proposition to the voting public was clear, voting Internet MANA would be a declaration of war on capital and threatened the relative stability of capitalism in New Zealand. Were voters so sure Internet MANA and it's programme could prove staunch enough to challenge capital in parliament? No, they were not, and Internet MANA's vote collapsed.

This act of cooperation by the major parties cannot be overlooked. You only need to look at the unified mobilisation of the ruling elite in the UK at the threat of scottish independence to understand that when faced with a threat to their economic rule, the ruling capitalist parties will put aside their differences and fight the threat to this rule. But while this act of cooperation unified the different political parties in New Zealand, it was the only act of cooperation the NZ left could muster in the lead up to the election. Blame must be placed at the feet of the main opposition parties, namely Labour and the Greens, for their inability to provide a united alternative to the National Government. Constant bickering and undermining of each others position poisoned the idea of these parties working together post election in the minds of New Zealanders. If they were unable to work together in the lead up to the election, what evidence could they provide that they were ready to form a government. The Key government as an alternative, offered to work with their support partners on their differences, rather than using them as a point of difference.
National's depiction of the New Zealand Left in the lead up to the election.
What must be done?

In many ways the failures of MANA were not due to what was done, but what was not. MANA was ultimately unable to convey to a great mass of the working class a programme, a viable alternative to capitalism. Nor was it able to convince them of it's commitment to that programme or that it was in possession of forces adequate for the realisation of this programme. Neither was the working class yet in a situation desperate enough for MANA to lead in that project. Relative prosperity in New Zealand, as well as acts of unity from the ruling class, show that there is still a material basis for bourgeois dominance currently. However this material basis continues to decline, with growing inequality despite growing global wealth, environmental degradation despite new technologies and oppression despite protest. It is only a matter of time until there is a situation which brings all of these growing contradictions to the fore anew, as with the last crisis. If the Labour party is relied upon to lead in this next crisis the result can only be the same; Paralysis, as the party turns on itself once more.

Mike Treen from Unite union advocates;
'At the same time a more radical critique of capitalism which is beginning to be advanced by the MANA Movement has yet to to win a hearing from a significant percentage of the voting public. That doesn’t mean that radical voice should be silenced or moderated. I am confident that the continued failure of this system, and the parties that defend this system, will eventually open the eyes of many more people to what is needed. That is also reflected in the willingness of growing numbers to take action around issues like climate change, child poverty, deep sea oil drilling in just the last few weeks. Ultimately real change will come from a combination of action in the streets and at the ballot box. If MANA remains true to itself as a movement of both the streets and parliament they can be confident of future victories.'

MANA must be the focus for constructing a resolute, unified and broad mass working class party. It needs a clear anti­capitalist programme as an alternative to capitalism, a mass organisation of activists to lead struggle for the programme, and a mass membership to struggle for and implement their programme. Socialist Aotearoa reaffirms its support for the MANA movement and calls for the following reforms.

Without parliamentary representation to distract or provide a basis for opportunism, which is now at a low within the party. There is a clear opportunity to build the MANA movement, through activism, argument, and solidarity. MANA must now be at the forefront of all struggles against oppression, climate change and inequality for the next three years. It will take a high level of co­ordination within MANA and with other activists. By being the most organised, consistent and democratic, we can win these activists to MANA. By winning these activists, we can win the most advanced sections of the working class to MANA.

A sold publication from MANA must be produced. This is a traditional method to communicate with sections of the working classes and is sorely missing from the left. This is vital in order to organise MANA effectively, but also to develop ideas creating a greater degree of consensus within the movement, avoiding delays and internal strife, while promoting movement democracy. It can be used to advocate for an anti­capitalist programme to the working class and promoting MANA's actions to win new members.

Funding for activities, campaigns and publications must be gathered from the membership. It is necessary for MANA to collect dues from their members in order to fund the movements activities. The national aspect of MANA provides opportunities for national funding in order to support vital struggles with resources previously inaccessible. This is also a vital source of non parliamentary resources which will help to strengthen MANA's independence.

Revolutionary socialists must work within the MANA movement to be the most active leaders, with the most advanced strategies, tactics and politics, we must win our arguments through their strength. We must continue to fight against racism, sexism and nationalism within the MANA movement, and call upon the movement to be the first to oppose these injustices wherever they present. We must also work to win the most advanced section of the MANA movement over to revolutionary socialism and promote socialist ideas in general. Only then will we be ready for the looming crisis.

Dave. SA