The Spark November 2009 Philip Ferguson

One of the issues that has arisen with the current recession is the responsibility of banks for the partial meltdown in the financial sphere.  Sections of both the left and the right had traditionally targeted banks, a practice that has become more pronounced with the new recession.  For instance, on January 19 this year the Financial Times in Britain even ran a headline saying “Shoot the bankers, nationalise the banks.”  In New Zealand, Federated Farmers has accused banks of “profit-gauging” – rather rich when you consider the amount of profit made by Fonterra!  Traditionally, in New Zealand, right-wing nationalists such as Social Credit targeted the banks, a reaction to the fact that the social base of that movement – small farmers and small businessmen – were often squeezed by banks in terms of credit, mortgages, loans and so on. 

 Right-wing nationalism in New Zealand also targeted foreign ownership, preferring New Zealand workers to be exploited by good old ‘Kiwi capitalists’ rather than Australian, British, American and – especially – Asian ones.

 It’s therefore rather disturbing, to say the least, to see a section of the far left, in the form of the Socialist Worker group, take up the cudgels against the banks as some unique evil and then wed this to NZ nationalism by targeting only Australian-owned banks in New Zealand through their launching of their “Bad Banks” campaign.  At the same time these socialists have decided to target Australian-owned banks, Kiwibank is playing on NZ nationalism to drum up customers, with a massive, politically ultra-nationalist publicity campaign against Australian banks. 

 The Australian banks have actually weathered the global financial woes relatively well.  This is partly due to the loss of tens of billions of dollars by Australian banks following the deregulation of banking there by the Labour government in the early-mid 1980s.  Deregulation led to banks making incredible loans to cowboy corporates, most of which collapsed.  That experience led to a new era of managers and greater fiscal caution.  Four of the top 11 banks in the world, in terms of credit ratings, are now Australian and Australia’s eight biggest banks are all in the top 20 banks globally.

 An increase in funding from Australian banks to their NZ subsidiaries is also a factor in the stability of the NZ banking sector.  Another factor in NZ is that the functions of different types of banks have been less combined here, and in Australia, than in the US.  Thus in New Zealand, finance companies carried out activities which have become increasingly prevalent among banks in the United States and elsewhere, and so it has tended to be finance companies which have collapsed here, not banks.

 Moreover, what exactly is the difference between Kiwibank and the Australian banks?  The basic fact about banks is that they are businesses and Kiwibank is certainly that.  Government-owned it may be but, like much else that is owned by the NZ government, it is run to make a profit, not to perform a public service.  This would help explain why Kiwibank, and not any of the NZ subsidiaries of Australian banks, had the highest net interest margin in the June-December 2008 half-year.  Kiwibank, like all other banks, pays low rates of interest to small depositors – workers, especially poorer workers – and much larger rates of interest to middle and upper class depositors.  Like all other banks, it lends out money at higher rates than it pays depositors.  Moreover, since it’s not dependent on foreign funding it escapes the higher costs associated with such funding in a period of credit crunch, while the fact that it is based almost entirely on deposits meant that when interest rates on term deposits and the Official Cash Rate fell it had more potential for profit-making.

 In any case, the fundamental cause of the global recession has little to do with banks.  At a time when the market is clearly not working and governments are being forced to intervene, there are expanded opportunities for socialists to explain to a wider audience the fundamental failings of the capitalist system – why go off at a tangent and scapegoat banks, let alone do so on an economic nationalist platform which obscures the exploitation of NZ workers by NZ capitalists?

 The fundamental cause of the current global recession is the stagnation of the real economy – the economy where new value is produced in the form of commodities, goods and services produced to be sold on the market to realise a profit.  It is the stagnation of the real economy, the sphere of production, that leads to the massive flow of capital into the artificial economy, which is where financial services, currency trading, stocks and share buying and selling etc are located. 

 The stagnation in the real economy is the product of the law of the tendency of the rate of profit to fall.  What happens is that workers’ labour-power (capacity to work) creates new value, since workers can produce more in a working week than what they are paid for in wages.  This is the basis of profit.  The other factors in production – eg machinery, raw materials – simply transfer their own existing value into the value of the new products.  So far, so good.  However, capitalists are forced to compete against each other, to produce more goods more cheaply in order to gain more market share.  This means their capital invested in new machinery, plant, technology (constant capital) etc grows in proportion to the capital they have invested in labour-power (variable capital), the source of new, expanded value.  They can produce a bigger mass of profits, but the rate of profit falls, because it is measured over the combination of variable capital and a substantially expanding constant capital.  Eventually the rate of profit falls to a level at which they can either no longer fund a major new round of investment in industry and manufacturing and therefore invest in the artificial economy or simply decide that since profit rates are, at this stage, higher in the artificial economy they will invest there, regardless of their ability to invest in the productive sphere. 

 Essentially, this process led to the end of the long postwar boom (late 1940s to early 1970s) and the onset of a massive global economic breakdown of the early-mid 1970s, a far more serious crisis than the current recession.  Since that crisis, there has been no new protracted boom in the real economy.  There have been mini-booms, usually in some sphere of the artificial economy, such as the boom in share trading in the mid-1980s which ended with the crash of October 1987.  What essentially happens with each of these mini-booms is that the paper values of whatever is being traded become vastly inflated; eventually someone can’t or won’t pay the vastly inflated price and the balloon is burst.  However, all these mini-booms in the artificial economy – whether around buying and selling shares, speculating in currency and property, dealing in subprime mortgages and bundling them up into toxic securities packages – are the product of the stagnation in the real economy and, ultimately, the contradiction between the stagnation of the real economy and the booming of some part of the artificial economy brings each house-of-cards boom to a dramatic end.

 Where you locate the most important problem in capitalism also dictates what you will argue is the solution.  For instance, if the banks – or even the wider financial sphere – is the most important problem then the logical answer is greater government regulation.  And if the problem is foreign-owned banks, then the solution, logically, is economic nationalism.  In neither case is the overthrow of capitalism necessary or desirable.

 If, however, the key problem is the capitalist mode of production itself, and the cause of crisis is ultimately located there, then regulation and economic nationalism make no sense but are dangerous diversions, leading people up a political blind alley.  If the key problem is the capitalist mode of production, then only the abolition of that mode of production can put an end to the boom-bust cycle of the system, to the grind of daily exploitation, and to the poverty and misery that capitalism inflicts globally on the mass of humanity.  It’s the job of serious Marxists to clarify, not obscure, the core problem and the solution.

The Spark November 2009
Mike Kay

 The disappearance of two year old Aisling Symes in the west Auckland suburb of Henderson on 5 October dominated the headlines over the next few days. There was mounting speculation that the toddler had been abducted. TVNZ sent their Sensing Murder “medium” Deb Webber to “assist” the Symes, a move that drew widespread criticism. In reply, the TV station stated: “We’re not trying to push a psychic message to make money and get ratings.” The British aristocrat Lord Ashcroft offered a $50,000 reward for her safe return (considerably less than the $200,000 he’d put up for the return of the stolen Victoria Cross medals)

 Aisling’s body was found a week after her disappearance in a storm water drain on a property adjoining the one from where she went missing. The police officer heading the investigation told the press that he believed the cause of death to be misadventure.

 But while the media focused mainly on the family’s heart-wrenching grief, some members of the public have started asking questions about storm water services in their local communities.

 The Spark spoke to two drivers, Jim* and Charlie*, recently made redundant from a firm specialising in vacuum loading about the state of the council contracting business.

 “We were laid off because our company was losing out to other contractors undercutting us on price,” says Jim. “The reason they were able to do so is that they are continually cutting corners. The storm water cesspits are up to 2.5 metres deep and need to be cleaned every three, six or 12 months. There are pits in Waitakere that are full of rubbish. The contractor paints a dot on the kerbside to indicate it’s been checked, but you’re lucky if they open the grates and suck out the dirt in one out of four occasions. They’re claiming off the council for work that is not being done.”

 Long term build up of refuse in the drain system increases the hydraulic pressure of storm water that can cause grates to pop off, which is what is suspected to have happened in the Aisling Symes case.

 “A good example is Whangarei a couple of years ago,” continues Jim. “There was severe flooding in the main streets. When I got sent up there, I found out why – there were pits so full that grass was growing out through the grates! I was taking two to three loads to the landfill every day at 4 tonnes each… about six times the usual volume.”

  “They’ve been getting away with murder for years,” said Charlie of such contractors, “and now they’ve got away with it literally.”

*not their real names

The Spark November 2009
Jared Phillips

The lockout of Talleys-owned Open Country Cheese workers came to an end in late October 2009 after a legal and industrial struggle waged by the Dairy Workers Union (DWU) and its members.

 The Open Country Cheese site is a self-contained dairy factory in Waharoa, a few minutes drive north of Matamata in the Waikato. The lock-out came after strike notification by the DWU. In other words, the employer issued the lock-out notice before the strike had officially begun, and marched workers off the site in mid-late September.

 The Dairy Workers Union has previously been characterised by a reluctance to take industrial actions or to engage in media releases against individual employers. This is because of a number of factors such as the skilled and semi-skilled nature of workers under its coverage, and broad partnerships with some employers. In fact, the union had not engaged in major strike activity for over 20 years. However, no other path except industrial action combined with gaining solidarity from the public was available to make any improvements for the employees at Open Country Cheese.

 From the beginning of the unionisation drive in Open Country Cheese, the employer put up as many barriers to unionisation as possible. Some of the workers in the plant were previously members of the Dairy Workers Union at other jobs and acted initially as a kind of organising cell. When they were ready to go beyond this the DWU was blocked from formal access to the site. This had to be dealt with legally in a case that was successfully taken to the Employment Relations Authority.

 When the bargaining process commenced the company ruled-out pay claims and the negotiations were refocused on secure hours of work and work scheduling, as well as redundancy processes. Further, the company extended itself with anti-worker practices by setting up what has been referred to as a ‘bogus employment agency’ to further casualise workers and exclude them from the collective bargaining process. The employer still made no significant offer through mediation on September 9. These were the factors which determined that the union had to take industrial action.

 The lock-out and use of scab labour was challenged in the Employment Relations Authority. This was seen by the wider union movement to be an important case because its result would give signals to other employers as to how far they could test employment legislation. The lock-out itself was ruled illegal on the basis that the company was not engaging properly in the bargaining process. Decision was reserved on the use of scab labour due to ownership structures and considerations around the nature of the employment relationship between the company and the scabs. Effectively the ruling changed the situation so that the locked-out workers received some level of pay while scab labour kept them out of working their jobs.

 The company had used extremely dishonest tactics such as accusing the workers, who practiced discipline, of sabotaging the plant. A union delegate at the plant was sacked on the basis of false allegations that he broke the window of a company work van that is said to have been transporting scabs. Throughout the dispute the company’s activities were met with solidarity from other workers, unions, and the community.

The dispute was ended in mediation on Wednesday October 24. In terms of the direct result for these workers the outcome is mixed but has strong positives. Acting cynically again, the company announced restructuring during the dispute. Some workers took redundancy in confidential settlements. On the positive side there is now a collective agreement in place, which the union can build on in the future. 

Aside from the direct results for the workers, there are important implications for the wider dairy sector and for the rest of the working class. Talley’s has been shown that if it wishes to extend its anti-union behaviour with its encroachments into the dairy industry it will be met with resistance. The rest of the employing class has been shown that a small number of workers (approximately 35 were involved) can and will stand up to anti-union activities and win the right to collective representation. Their resistance took place at a very important time, showing other workers that it’s possible to engage the boss in smaller set-piece battles. The workers – and very importantly, the families who had sacrificed – successfully made a heroic stand against the odds.

The Spark November 2009
Jared Phillips

 The revolutionary movement in India, under the leadership of the Communist Party of India (Maoist), has expanded its base over the last three to four years through regroupment of the movement and also through consolidation of its support in urban centers. Consequently, the Indian state has extended its ban on the party. Previously the political ban was imposed on the party in several states mainly in the east of the country. Now there is an ‘all-India’ ban on the CPI(M). The party has established peoples’ committees in three states, and has done so in-part in other states.

  The armed apparatus of the party – the People’s Liberation Guerrilla Army

- is active in 15 states throughout India, and is engaged in more intense insurgency fighting in several of those states.

  As well as being outlawed, the movement – with its base mainly amongst poor or landless peasants, is facing a new wave of repression from the government military forces. The central Government has announced ‘Operation Green Hunt’, which is a five year offensive starting in November 2009 with the objective of wiping out the revolutionary movement. The plan for the offensive consists of a seven-phase strategy, with each of the seven phases focused on a different guerrilla ‘area of operation’, building towards the eventual encirclement of the guerrilla forces.

 What this means is that the central government has been forced to centralise counter-insurgency strategies, rather than rely on state-by-state counter-insurgency methods.

 The central government’s offensive, approved by the United Progressive Alliance

(UPA) government’s Cabinet Committee on Security, will be based on the creation of a new Special Forces School, a new Special Forces Unit, and a new military headquarters at which they will be based. The physical base granted for this plan is 1,800 acres of land, which shows that the government is making significant structural changes to its military infrastructure in order to fight the insurgency.

 The offensive will also consist of the deployment of 27 battalions (approximately 800-1000 soldiers each) of the Border Security Force, and the movement of Indo-Tibetan Border Police into guerrilla strongholds.

  There will also be an increased presence of Indian Air force helicopters. Ostensibly these are to be used for ’search and rescue’ activities. But the air force has been authorised to use force where necessary. The counter-revolutionary forces in India have a long history, documented by human rights organisations, of creating ‘false encounters’, which are massacres disguised as firefights. So in the context of a general offensive, the deployment of helicopters with the ability to use force ‘where necessary’ spells bloodbaths.

 Advisors to the military and the government have warned the government of the dangers of pursuing such an open counter-insurgency strategy. They protested that such open statements about strategy may give the guerrilla forces the upper hand, both in terms of military information and public sympathy. The government response was that the openness about the offensive was part of conducting psychological warfare against the guerrillas. The factions which oppose open statements on the offensive have responded to this by pointing out that if the efforts fail they will look like bigger losers and lose any psychological advantage.

  With regard to previous counter-insurgency operations, a revolutionary leader, Gonapathy, has said that despite some severe losses, the movement has continued to grow, including by region, and has continued to gain victories and influence. Getting to the centre of the matter, he pointed out that fighting against and withstanding government-military offensives is simply a part of guerrilla strategy. The truth is that over the last year government forces have sustained more casualties than the movement.

  Separate to this offensive, but potentially impacting on the people’s war in general, the U.S and Indian governments announced Exercise ‘Cope India-09′ in October. It is a joint military exercise conducted by the air forces of both countries. Further joint exercises of their regular armies are taking place, involving 1,000 military personnel. Speaking to these joint exercises, the U.S ambassador to India said that military co-operation is a core part of the U.S-India relationship.

PRESS RELEASE:

Invercargill mayor and 1960s protest figure Tim Shadbolt and distinguished NZ film-maker Gaylene Preston have added their names to the list of those calling for the administration at Victoria University to lift the two-year trespass ban it imposed recently on Wellington workers’ rights activists Joel Cosgrove and Heleyni Pratley.

Cosgrove, a former students association president, and Pratley, a former student executive member, were trespassed for taking part in a protest against fee increases by the University Council. At the protest Cosgrove threw one egg, which he later cleaned up, and Pratley held a sign calling for free education.

The pair were then arrested and charged with trespass when they tried to deliver a petition signed by academics and trade union figures calling for the trespass order to be lifted.

“It seems that Victoria is keeping up its reputation as the most uptight University in New Zealand. I remember in the late 60s we had a University Arts Festival there and a small group of us went to sleep in the Common Room and were all arrested for trespass. Universities should be the last bastion of free speech and democracy,” said Mayor Shadbolt, in a message of support to the campaign to get the trespass orders lifted.

Cosgrove and Pratley have welcomed the support, saying that the longer the administration maintain the trespass order the more draconian and silly it makes the University appear. END

The SPARK interviews long serving anti-imperialist activist and Workers Party secretary Daphna Whitmore

Spark: It’s been 8 years since New Zealand troops were sent to Afghanistan – why did the Labour-Alliance government send them in the first place?

It needs to be understood in the context of New Zealand’s involvement with US and British imperialism. New Zealand is a partner in this bloc, and Labour enthusiastically signed up to the so-called War on Terror. When it comes to involvement in military adventures Labour governments have been just as warmongering as National.

Daphna Whitmore (left)at May Day march 2009

The Alliance Party split over the issue of support for the invasion of Afghanistan, with the majority of its members rejecting the war. It highlighted the problem of being in government with an outright capitalist party like Labour.

Spark: New Zealand companies aren’t trying to make major sales in Afghanistan – why all the risk and expense over such a long period of time?

 In its last term the Labour government did scale back the involvement, recalling the SAS and sending instead “reconstruction” forces. This tended to obscure the reality – that these are military forces, participating in an occupation. It dressed it up to look like it was simply a humanitarian mission.

Now Obama, facing a humiliating defeat in Afghanistan, is sending in more troops. His call has been heeded by the National government. As you point out, there are no major sales in Afghanistan; it is much more a case of being on board with the strategic goal of subjugating the region. It’s tricky for the NZ ruling class, because while they are aligned with US interests, there are also interests they have with European powers. Having a foot in both imperialist camps was something that Helen Clark was a master at.

Spark: why have successive governments kept up involvement in the war?

To withdraw and accept the Taliban’s resumption of power would be a major climb down for the US, Britain and its allies. They invaded for strategic reasons, and to show who was boss in the world, and to demonstrate the US had gotten over the Vietnam complex. It was important for them to beat the guerrilla forces on the ground. Of course, they have shown again how the world’s most powerful army can be tied up for years by a determined guerrilla resistance. That the Western powers are being beaten by the Taliban and other local forces in Afghanistan is humiliating for them.

Spark: What about the argument that these troop deployments are helping make the world a safer place by slowing down the terrorists?

The Taliban were never a force outside of Afghanistan, just as there were no weapons of mass destruction in Iraq. All wars of aggression have their pretexts.

When you see pictures of villages bombed, and whole families killed by the occupying forces in Afghanistan it’s clear who are the terrorists.

Spark : New Zealand has a name for being anti nuclear warships – how does that sit with your description of it as “imperialist”?

There was a mass movement in New Zealand, which was part of an international movement, for disarmament. The movement succeeded in New Zealand in banning nuclear warships; and it is such a popular position that no government has dared to revoke it since. However, it proved to be a concession that the ruling class (in NZ and the US) could live with. There was no blockade, no US led coup or any response that you’d typically see when an oppressed nation stands up to the US. And the reason was that New Zealand was an imperialist partner – not an oppressed country.

The same government that banned the visit of nuclear warships carried out a harsh neo-liberal programme, selling off state assets, privatizing services and slashing the living standard of working people. That Labour government was one that Margaret Thatcher would have felt at home in.

Spark: Labour is saying that it was right to send NZ troops 8 years ago, but its not appropriate today – has something changed?

They are in opposition, and words are cheap. If they wanted to get out of Afghanistan they had 9 years to do so.

Spark: If it’s so wrong for NZ troops to be in Afghanistan why aren’t more people protesting about it?

It seems a world away to most people. The Taliban and the various war lords in Afghanistan do not inspire people in the West, understandably. While the Taliban and the Afghan resistance are playing a positive role resisting the invasion, they are not a socially progressive movement. Also, the way the invasion has been dressed up as a humanitarian effort, and one that claimed to be about modernizing society and liberating women, concealed the true character of the war. In New Zealand the minimal troop involvement has meant that most people are barely conscious of this country’s involvement.

Spark: What does the Workers Party think should be done about NZ overseas troop commitments? What about the deployments of peace keeping troops?

Imperialism uses both the carrot and the stick. In the seventies and eighties Washington wielded power by backing military dictatorships throughout Asia and Latin America. When these became thoroughly discredited it adopted a humanitarian face and conducted invasions under the banner of “democratization”.

New Zealand has no business invading and occupying other countries, even under the guise of peace keeping. We need to consistently oppose all these military adventures, whether they are “legal” or “illegal”; sanctioned by the UN or not. They are unjust wars and are not liberating.

Spark: You’ve been agitating against NZ imperialism for two decades. That’s a long time and some would say not a lot has changed. What keeps you motivated and what changes do you expect to see in the future?

Vietnam showed that the US – the biggest power in the world – could be beaten. The resistance in Iraq and Afghanistan have again shown that military might is not invincible.

The decline in of the secular, progressive and Marxist movements in the world is a challenge facing us today, but there are some promising signs. In Nepal, and in Venezuela there is something like dual power where the old rulers are being overthrown. In the Philippines, and in parts of India communist movements have held their own and are growing.

The resistance of oppressed people is a constant source of inspiration.

The Workers in New Zealand Campaign of Solidarity with the Popular Front for the Liberation of Palestine (PFLP) expresses outrage at the ongoing ethnic cleansing perpetrated by the Israeli state against the people of Palestine. The campaign provides an opportunity for New Zealanders to support the PFLP in resisting the racist state of Israel and its policy of house demolitions and settlement building in East Jerusalem and the West Bank.

The “Peace Process” which has seen the conditions for the Palestinian population in the occupied territories deteriorate dramatically, while ignoring the right of return of 5 million Palestinian refugees and the plight of Palestinians living within the racist state of Israel. The “Peace Process” has seen them forced into Bantustans, oppressed by the Palestinian Authority’s co-operation with the occupier, enclosed behind an annexation wall and the continuing lose of land via colonisation through settlement building and forced population transfer.

In New Zealand we are raising political awareness of the Palestinian struggle and raising funds for the PFLP through a t-shirt campaign. Since the National Campaign Launch there has been local launches in Wellington, Christchurch and Auckland. These launches have been followed up by street stalls, university campus meetings and film showings. These events have seen a demand for the t-shirts including international interest from Germany, Malaysia, Denmark and the United States.

All profits raised by the campaign go directly to the PFLP to help fund all aspects of their struggle against the Zionist state of Israel both politically and militarily. The PFLP sees the path to liberation and an end to the conflict, as a single secular state in all of Palestine, with the right of return for Palestinian refugees and where all people regardless of race or religion have equal rights.

Our campaign supports PFLP calls for:

1.    The demand for the immediate lifting of the PFLP from the so called “terrorist list “in the EU and North America. This is an important and historical task for all progressive movements, for their resistance and it is a battle that we must win against capitalism and imperialism.

2.    The demand for the immediate release of comrade Ahmad Sa’adat, General Secretary of the PFLP. Comrade Sa’adat is being has been held in Israeli prisons since March 14, 2006 and he was transferred to Al Majdal (Asqlan) prison where he is in solitary confinement.

Aid as imperialism: the role of NGOs in global capitalism

Tuesday November 10th, 5:30pm, Southern Cross.

Discussion, biscuits and tea afterwards.

Solidarity.

On the eve of Halloween there was a carnival atmosphere as people marched up Queen Street Auckland.

The march was part of Unite’s campaign to get 300,000 signatures on our petition for the minimum wage to be raised to $15 an hour. If that target is reached by May next year the government will have to hold a referendum on the question of whether the minimum wage should be lifted to $15 an hour.

A vampire boss effigy was burnt at the stake, to cap off the night.