Fazi vs. Stark on European Deflation

April 24, 2014

Thomas-FaziPluto author and European reform activist, Thomas Fazi, has issued a stern rebuke to views expressed by former European Central Bank (ECB) board member, Jürgen Stark, regarding the threat of deflation in the Eurozone and the prospect of a “lost decade”. Writing for the Financial Times, Stark had derided fears about Eurozone deflation which had surfaced following calls by the International Monetary Fund for the ECB to take action to counter broad deflationary trends. According to Stark there were “no signs of deflation at the Eurozone level” and those claiming otherwise lacked “in-depth analysis”, “a clear distinction between ‘benign disinflation’ and ‘bad deflation’” and even “understanding of the European Central Bank’s approach”. Stark’s analysis shifted the frame of debate to individual member countries rather than the Eurozone as a whole and therefore placed the balance of responsibility with national governments rather than intra-national bodies such as the ECB with calls for further Eurozone-wide action being described by Stark as “misguided and irresponsible” .

There was a sense here of the old guard being enlisted in defence of the status quo but who would challenge this apparently authoritative statement? Enter Fazi. His latest book The Battle for Europe: How an Elite Hijacked a Continent takes aim precisely at institutions such as the European Central Bank whose “monetary orthodoxy” he claims “played a crucial role in the onset, and worsening, of the Euro crisis”. Strong words, but his apparently radical position is now looking significantly more respectable as major institutions such as the IMF, the OECD and the German Institute for Economic Research (DIW) – all traditional supporters of the ECB’s “monetary orthodoxy” have now said “the ECB should act rapidly to avert Japanese-style deflation”. The reference to Japan evokes precisely the “lost decade” which Stark claims Europe is not embarking upon, the term usually being used to described the period between 1991 and 2001, which followed Japan’s own asset bubble crisis, when both the Bank of Japan and the formerly dubbed “Mighty Miti” (Japan’s interventionist Ministry of International Trade and Industry) were apparently unable to restimulate the perpetually ailing Japanese economy.

Having remained ahead of the curve in his analysis on Europe thus far, there is good reason to want to hear what Fazi will have to say on the latest developments and we are excited to reproduce his analysis below, which originally appeared on the website of the Social Europe Journal and we will be sure to keep you updated on any developments in this widening debate:

 


 

In a recent article published in the Financial Times, Jürgen Stark, a former member of the ECB’s executive board, brings the anti-inflation paranoia that the German establishment has accustomed us to since the start of the crisis to a whole new level. In his commentary, he rebuts the need for a more expansionary monetary policy for the monetary union and states that “there are no signs of deflation at the eurozone level”, thus concluding that “no further action by the ECB is required”.

Stark concedes that inflation has been low in the eurozone since late 2013, but asserts that this has been driven solely by “by falling energy and commodity prices, the fading impact of past tax rises in some countries, the appreciation of the euro and relative price adjustments in countries such as Greece, Ireland and Portugal”. Regrettably, he forgets to mention that low inflation (or outright deflation in some countries) is largely a result of the hyper-restrictive and demand-crushing recessionary fiscal policies imposed on European countries – and especially those of the periphery – since the start of the crisis, and now crystallized and institutionalized ad infinitum through the Fiscal Compact.

The IMF’s mea culpa on the recessionary effects of the so-called fiscal multiplier should have shed any lingering doubts about this. Stark acknowledges the deflationary effects of the “relative price adjustments in countries such as Greece, Ireland and Portugal”, but implies that this is a good thing – “benign disinflation” he calls it. The “morality play” underpinning Stark’s assumption is that the huge intra-euro trade imbalances that emerged following the creation of the monetary union are the sole responsibility of the countries of the periphery – which supposedly “lived beyond their means” by letting their wages rise to excessive (inflationary) levels – and that they should thus be the ones to shoulder the burden of readjustment by pursuing internal wage devaluation.

This is only part of the story, though. While it is certainly true that periphery countries overshot the EMU’s commonly agreed inflation target of 2 per cent by letting their unit labour costs (ULCs) rise above that level, it is also true that Germany undershot its target by an even greater degree. If we compare Greece to Germany, for example, we note that in the post-euro years Greece experienced a 2.7 per cent ULC growth rate compared to a rate of just 0.4 per cent in Germany. In other words, Greece (and other periphery countries) violated the rule to a much lesser degree quantitatively than Germany.

As progressive economists Costas Lapavitsas and Heiner Flassbeck write, “in view of this scale, the conclusion about wrongdoers and misbehaviour is obvious: […] given this target and the overriding importance of unit labour costs for inflation, Germany headed towards a clear violation of the common target once its government started putting enormous pressure on wage negotiations to improve the country’s international competitiveness, inside and outside EMU”. And, of course, the reason Germany could afford to “live below its means” is that others in Europe were living beyond them – thus providing the German economy with consumers.

That said, even if one agreed to go along with the myth that the periphery countries are solely responsible for their current uncompetitiveness vis-à-vis Germany, the notion that there is something “benign” about the ongoing – and “unavoidable”, stresses Stark – process of asymmetric readjustment is laughable. As a result of the reduction of ULCs in periphery countries in recent years we have indeed witnessed a drastic rebalancing of intra-euro trade balances, with periphery countries registering a sharp decrease in their pre-crisis intra- and extra-euro trade deficits. This, though, is just as much a consequence of increased exports as it is of decreased imports, because of the drastic reduction in demand.

The benefits of increased exports for these countries are in fact been offset by the devastating effects on the wider economy – exemplified by very low or even negative (Spain, Greece) inflation rates – of stagnating or falling wages, compounded in turn by the effects of austerity at the budgetary level. This is especially so since the export share of periphery economies is rather low, amounting to 27, 32 and 39 per cent of GDP in Greece, Spain and Portugal respectively, compared with 52 per cent in Germany.

In other words, internal deflation is akin to killing the patients in order to cure them. This becomes evident when we look at the data for industrial production, which in most periphery countries is down between 25 and 40 per cent from pre-crisis levels. An even more shocking indicator is the one relating to insolvency rates, which between 2010 and 2011 saw an increase of 7 per cent in Ireland, 17 per cent in Italy and Portugal, 18 per cent in Spain and 27 per cent in Greece, according to the German-based Creditreform.

This points to the fact that the current deflationary policies are reaping devastating long-term effects on the productive capacities of these countries, which far from increasing their competitiveness will hinder it for years to come. And this is not to mention the effects of “lowflation” or even deflation on the public debt of periphery countries: according to a study by the Bruegel Institute, in a “low inflation” (zero per cent) environment countries like Italy and Spain (not to mention Greece) will see their public debt levels explode even if they stick to the Fiscal Compact’s budgetary prescriptions.

According to Stark, though, these war-like numbers are no cause for concern, because “the economic recovery in the eurozone [is] stabilising” and “there are no signs of deflation at the eurozone level”. Even if this were true – which it clearly isn’t, if we are to believe such left-wing bastions as the IMF, the OECD and the German Institute for Economic Research (DIW), all of which have stated that the ECB should act rapidly to avert Japanese-style deflation – one would be justified for considering Stark’s choice to obfuscate the dramatically asymmetric nature of the “recovery” (and the fact that the current policies have hugely benefited the continent’s creditor and surplus countries, first and foremost Germany), by focusing solely on the European average, as more than simple ideological blindness – and as a deliberate attempt to conceal what George Soros has described as the plan to create “a German empire with the periphery as the hinterland”.

Such conspiratorial musings are unwarranted, though. It’s a well-known fact that certain elements of the German establishment have an almost unbound capacity for denial, even in the face of overwhelming evidence – and even for matters that directly concern them. Most historians agree that it was the deflation of the 1930s, and the resulting record-level unemployment rate – a direct result of chancellor Brüning’s austerity and wage compressing policies – that led to the breakdown of democracy and the rise of Nazism, and not the hyper-inflation of the 1920s.

Yet most Germans to this day are still convinced of the contrary. Which helps explain why, eighty years on, Germans such as Stark still insist on other countries pursuing the same deflationary policies pursued by chancellor Brüning at the time. It’s true: we don’t risk the rise of a new Hitler today. But the risk of a prolonged period of economic, political and social regression, leading to a surge of fascist and reactionary movements and to a possible disintegration of the European integration process is real – and is arguably already happening.

Stark writes that “to prevent a lost decade, structural reforms, sound fiscal policies and a strong and well-capitalised banking sector are crucial”. The reality is that Europe has already lost half a decade – and is on the way to lose much more than that – and this is the direct result of the failed policies promoted by ideologues such as Stark.

We are still in time to avert the worst-case scenario – as long as we are capable of challenging the dominant and tragically flawed economic and monetary orthodoxy – but we need to act fast. It would be truly unforgivable if we allowed the German monetary-political establishment that Stark represents (and which even the hawkish Jens Weidmann seems to be distancing himself from) to make again the mistakes of the 1930s. As the former German foreign minister Joschka Fischer stated in 2012: “Germany destroyed itself – and the European order – twice during the 20th century, and then convinced the West that it had drawn the right conclusions. Only in this manner – reflected most vividly in its embrace of the European project – did Germany win consent for its reunification. It would be both tragic and ironic if a restored Germany, by peaceful means and with the best of intentions, brought about the ruin of the European order a third time”.


‘Stitched Up’ on MR Zine

April 24, 2014

Tansy Hoskins’ Stitched Up: The Anti-Capitalist Book of Fashion is becoming a hot commodity here at Pluto, a review from David Wilson over at MR Zine is reproduced below:


Hoskins T02657To say that Tansy E. Hoskins‘ Stitched Up deconstructs the garment industry would be a misrepresentation.  What the British activist and journalist does is more like a controlled demolition, using facts and footnotes to strip away the apparel trade’s decorative exterior and then to dynamite the foundations.

Hoskins’ polemic begins with the title.  In British usage “to stitch up” is “to swindle, to overcharge exorbitantly,” according to the Oxford English Dictionary, and Hoskins’ goal is to show the many ways that fashion swindles us all.  Through its own media outlets and its billions of dollars in advertising, the industry creates a glittery illusion of beauty and sophistication.  The reality is a $1.5 trillion industry as grimy and profit-driven as any, and the glossy pages of Vogue conceal a record of human and environmental damage we might expect from coal mining or oil drilling.

Some of Hoskins’ material is familiar: the torture deaths of animals to produce handbags and fur coats, the starvation wages and intolerable work conditions of the young women who stitch our clothes.  We’re less likely to know that the draining of the Aral Sea to irrigate Uzbekistan’s massive cotton fields has produced what Hoskins calls “a diseased rock-salt desert plagued by winds that blow carcinogenic dust into villages.”

The media covered the deaths of 1,133 Bangladeshi workers in the April 2013 collapse at Rana Plaza, but few people are aware of fashion’s connection to an even greater industrial accident.  At least 3,800 people died in the December 1984 explosion at Union Carbide’s chemical plant in Bhopal, India; tens of thousands were injured, and the health effects continue to this day.  The plant had been producing aldicarb, a pesticide largely used in the cultivation of cotton — “a deadly harvest,” Hoskins writes, “to be turned into disposable clothes and goods.”

From Bhopal to the Catwalk

The industry has its victims in the advanced capitalist world as well.  The exploitation of consumers in New York or London is clearly less horrifying than the treatment of workers in Bangladesh, but it remains exploitation.  Frequently using and reinforcing racist and sexist stereotypes, fashion pressures working people here to consume, and to consume more than they can afford.  Women especially are subjected to “constant messages that [they] must diet, must get cosmetic surgery, buy clothes and feel bad about themselves,” Hoskins writes.  And those of us who can resist the omnipresent pressure to buy are still compelled to “dress for success” if we hope to get and hold most types of job.

The exploitation extends even to the industry’s glamorous façade.  While the media fetishize a handful of Photoshopped top models, the young women on the catwalk actually tend be underage, vulnerable immigrants from Eastern Europe and South America, models’ union president Dunja Knezevic tells Hoskins.  These are “girls for whom not having food available for eight hours is acceptable because their mother works in a factory and doesn’t have any food for 12 hours a day,” Knezevic says.  And models aren’t exempt from industrial accidents: between August 2006 and February 2007 three models died from the effects of self-starvation.

Stitched Up would be invaluable just as a reference book on the devastation fashion has inflicted.  But Hoskins isn’t content to expose fashion on paper; she also wants to take it on in the real world.

Consumers in the Global North are generally aware of the issues; they’ve at least heard about the deaths in Bangladesh.  But what can they do?  The most common reaction is to feel guilty and, at the same time, helpless.

Routinely assaulted by the claim that “the consumer is king,” that shoppers control industrial practices through what economists like Paul Samuelson call “dollar votes,” people here feel they have a responsibility as individuals to change the way they shop.  But “ethical consumerism” isn’t easy to carry out in everyday life.  The products that claim to be nonpolluting or sweatshop-free “are often the most expensive on the market,” Hoskins notes, “so ethical consumption is unfortunately deeply class-based.”  We end up in effect “blam[ing] those with the least individual power in society for the destruction of the planet or the existence of sweatshops.”

And how are consumers to know whether the “ethical” products are what their retailers claim they are?  After all, we’re dealing with an industry that specializes in creating illusions.  Hoskins describes how in 2005 a company named NatureWorks LLC emerged to sell Ingeo, a “miracle fabric” advertised to be biodegradable and free from petroleum.  Ingeo turns out to be made largely from genetically modified (GM) corn, developed in a joint venture by Cargill Inc. and Dow Chemical.  Cargill is the world’s largest corn merchant, and its interest in the project seems to be a desire to increase consumer acceptance of GM products.  Dow is of course the producer of napalm and Agent Orange; in 2001 it merged with Union Carbide, inheriting responsibility for the carnage in Bhopal.

From Guilt to Solidarity

This doesn’t mean that there’s no room for action, according to Hoskins — just that “action must not stop at the checkout.”

The media tend to depict garment workers simply as victims, but as Hoskins points out, for more than a century “predominantly female garment workers” have led “some of the bitterest and hardest fought battles of the international labor movement.”  Workers in places like Haiti and Bangladesh need our solidarity far more than our sympathy.  In recent years consumers from the Global North have helped win meaningful changes in the garment industry, but this has happened only when they acted in collective, organized campaigns coordinated with the workers in the Global South.  Here in the United States, for example, groups like United Students Against Sweatshops (USAS) have used focused consumer boycotts on campuses — sometimes just the threat of boycotts – to force major manufacturers to agree to honor demands from workers in the Caribbean Basin.

There are limitations to this strategy.  Hoskins notes that despite recent victories real wages have continued to fall in the garment sector internationally, and she contends, convincingly, that fashion’s crimes are to a large extent inevitable in a capitalist system.  Still, solidarity campaigns “can unite, engage, educate and inspire people,” she writes.  They “have vital parts to play in changing the world and fashioning a new one.”

Stitched Up is a useful and even attractive aid for people ready to take up this challenge.  Its scope is encyclopedic, but the prose is rarely dull; Hoskins’ writing is powerful when describing the industry’s atrocities and witty when exposing its absurdities.  Nothing with so much content is going to be perfect, of course: too many of the footnotes give URLs without further information; the discussion of surplus value seems overstated; and some of the denunciations of capitalism may be unnecessary after Hoskins has already exposed the system’s fundamental faults.

But these are minor problems that can be resolved in later editions — because this is a book that will need to stay in print for years to come.  It may be too much to hope that Stitched Up will do for fashion what Rachel Carson did for pesticides and Jessica Mitford did for funeral homes; this is one slim book against an industry with a powerful machinery of deception.  But at the very least it will be an indispensable handbook for every labor and environmental activist, and for all consumers who wonder what they can do to prevent future Bhopals and Rana Plazas.


Gonzalez on Márquez

April 23, 2014

ggmMike Gonzalez, author of the recent Hugo Chavez: Socialist for the 21st Century, has paid tribute to another giant of the Latin American left – the writer Gabriel García Márquez who died last Thursday. His obituary, originally published by RS21, is reproduced below in full:


Gabriel García Márquez, who has died aged 87, was a globally recognised name even before he won his Nobel Prize in literature on 8 December 1982. His greatest work One Hundred Years of Solitude was translated into 20 languages within a couple of years of its 1967 publication. His journalism, stories and novels captivated an international audience. Yet he remained unmistakably Latin American – and more specifically and recognisably, Colombian.

It was not simply the settings that made the work of García Márquez so Latin American – the high Andes and the dense rain forests, the chaotic port cities and the coastal plantations. Nor was it just the extravagant cast of characters travelling through his pages, bursting with sexual energy, wise with secret knowledges of the rural indigenous past, bearers of endless stories and boundless herbal cures, bombastic mayors and self-appointed military leaders. Above all it was his reflection of the shared experience of every Latin American, captured in the beautiful title of his greatest novel.

García Márquez’s books form a single story and a single history – the two are not the same. History is the official narrative of that continent, written, printed and imprinted with colonial authority. That continent’s majorities, often unlettered, unacknowledged, hidden behind the grandeur of the Word, enslaved to the official version of events – this history written by colonisers had rendered them invisible.

The majority is not silent

But they were neither foolish nor silent. They had their own story to tell, their own experience to share, and a language to tell it in that could keep it safe. A single story in a single continuous time, where knowledge and suffering were held and passed on: in ritual and myth, in an oral culture all too easily dismissed as superstition by keepers of the Word

In García Márquez’s writing, these two histories, these parallel cultures, meet in a narrative he called magical realism. The notion was picked up enthusiastically by Western writers, “discovering” these silent continents – Africa, Asia, Latin America… for the “first time”.

But they misunderstood magic as Márquez understood it – not as primitive superstition but as popular memory that retains and absorbs its own history, retells it in different frameworks, in which the everyday oppressions are swept aside and history retold in the collective imagination.

6 December 1928. A strike of workers on a banana plantation in Colombia, owned by a multinational, brutally crushed with hundreds murdered. Newspapers reported nothing. The martyrs of the workers cause are simply airbrushed out of history. But the communities from which they came did not forget, and the massacre was told and retold, in songs, in stories. I was in Mexico in 1969, a year after the murder of 500 students at protest rally in the centre of the capital. Deaths denied too, but not left to die by popular memory.

30 April 1970: Mothers of revolutionaries murdered by the military regime march outside the presidential palace wearing photographs of their children around their necks. Their white scarves become a symbol of a continental struggle against impunity: a hope, an affirmation that the course of history can be changed and a different story written.

Endless stories, a different time

Born in 1928, García Márquez grew up in the wonderfully named town of Aracataca (just try saying it) where peasants would come down from the hills to meet the train. He remembers endless stories his grandmother told, watching her concoct herbal remedies that belonged to a different time.

Aracataca became the community of Macondo, an alternate Latin America that is the setting for all his novels. We witness to its foundation in One Hundred Years under the leadership of Colonel José Arcadio Buendía who wants to bring community there from a sort of Garden of Eden.

But where is it? The colonel’s party search east, south, north, west – but there is no route into the wider world. Instead that other world arrives in strange and unexpected ways – ice, false teeth, a train – as unexpected as they are inexplicable. They are products of other histories, other developments, transformations Macondo has never participated in. That is the origin of their solitude, their isolation from the tide of history, and that is why they experience change as magical. It is a source of comedy. It is a source of tragedy.

The banana company arrives in the short novel Leaf Storm, as if from nowhere, builds its fenced camp, exploits the local population, prostitutes its girls, just as suddenly disappears, leaving only devastation in its wake. Modernity has come and gone, leaving nothing. Bananas, oil, tin, gold, silver, copper, jute, nitrates.

Dreams that sustain us

García Márquez’s first novel, published in 1958, is the wonderful short piece No One Writes To The Colonel. The colonel and his wife Ursula live in poverty as he waits for his war pension to arrive. It never does. The practical Ursula insists they sell their fighting cock – their only possession of value – to pay for food. The colonel, always the dreamer, refuses, sure that his cock will win one day.

“You can’t live on dreams,” says Ursula. “No,” the colonel replies, “but they keep you going.” Time and again, dreams sustain his characters – pursuit of love, escape from the prison of solitude, refusal to accept a destiny foretold. That is the material for his beautiful, magical language. As Márquez said in his Nobel speech:

Faced with this awesome reality we, the inventors of tales, who will believe anything, feel entitled to believe that it is not yet too late to engage in the creation of the opposite utopia. A new and sweeping utopia of life, where no one will be able to decide for others how they die, where love will prove true and happiness be possible, and where the races condemned to one hundred years of solitude will have, at last and forever, a second opportunity on earth.


Vandana Shiva, ‘Seeds of Freedom’

April 23, 2014

Shiva picScientist and environmental activist Vandana Shiva has contributed a piece to the latest edition of Delhi’s The Asian Age (known as “India’s global newspaper”), entitled ‘Seeds of Freedom’ in which she discusses the reciprocal relationship between biodiversity and cultural diversity, specifically in the practice of seed planting which she now sees as threatened by the privatising practices of multinational agro-businesses such as Monsanto:

In times of climate change we need the biodiversity of farmers’ varieties to adapt and evolve. … While nature and farmers have evolved the traits of climate resilience in seeds, corporations claim their role of creator; they declare that seeds are their “invention”, hence their patented property. In times of climate change, such monopolies aggravate the disaster by blocking farmers’ rights to seeds they have evolved. Hence, seed as a common good became a commodity of private seed companies, traded on the open market.

Returning to themes which will be familiar to followers of her writing and activism, Shiva frames the discussion in terms of a broader “fight against corporate enclosures of the commons” and argues:

If we have to survive as a species, we need to reclaim our commons — of seed, of climate, of knowledge and resist the privatisation of every aspect of life.

This existential threat of corporate enclosure and the need to return to a harmonious relationship with the natural world is the subject of Shiva’s works such as Soil Not Oil (Zed, 2009) and the more recent Making Peace with the Earth (Pluto, 2013). In the latter of these two, Shiva talks about what she terms “eco-apartheid”, a deliberately evocative phrase to describe a stark situation:

The global corporate economy based on the idea of limitless growth has become a permanent war economy against the planet and people. The means are instruments of war; coercive free trade treaties used to organise economies on the basis of trade wars; and technologies of production based on violence and control, such as toxins, genetic engineering, geo-engineering and nano-technologies. Here we have just another form of ‘weapons of mass destruction’ which kill millions in peace-time by robbing them of food and water and poisoning the web of life.

With such an adroit mixture of vital information and vivid prose, little wonder she has achieved the position described by The Guardian as “one of the world’s most prominent radical scientists”. You can read the entirety of her article for The Asian Age here and pick up a copy of Making Peace with the Earth here.


A comradely response to Mike Gonzalez’s ‘Letters from Venezuela’

April 16, 2014

Gonzalez T02812Dan Gent has written a response to Mike Gonzalez’s recent ‘Letters from Venezuela‘, in which he counters Mike’s perspective on the unfolding political turmoil in Venezuela, arguing that Chavismo and the Bolivarian revolution is not so close to being destroyed as may be apparent.

The article was published on 11th April in LINKS – the International Journal of Socialist Review. We’ve reproduced the first section below. You can read the whole thing on the LINKS website, here. We also sat down with Mike Gonzalez two weeks ago to get his thoughts on the situation in Venezuela. The interview was filmed, and is embedded below. To find out more about his most recent book, Hugo Chavez: Socialist for the Twenty-first Century (Pluto, 2014), click on the cover image.

Dan Gent

Opposition protests have rocked Venezuela for over a month now and in many areas barricades remain. These had already been going on for a while in Merida and being called protests is a loose term as these have mainly involved youths with their faces covered, setting up burning barricades in the street to completely block the road, mostly lacking any political slogans or any message. These started with students from the University of Los Andes, one of Venezuela’s elite universities, who would repeatedly block the main road of Merida (Avenida de Las Americas). Supported by the university management (who have always been anti-Chavista) who would then shut the university down whenever the tyre burning started. These protests only involved a hand full of people who would then run into the university whenever the police arrived, exploiting the fact that the police can’t legally enter the university and that the management would do nothing to help the police arrest them.

These events started to spread throughout the country when on the 22nd of January, Leopold Lopez (one of the signatories to the 2002 coup attempt) and a group of opposition leaders demanded “La Salida” (the exit) of the Chavista government. In Tachira, in early February, opposition supporters attacked the state Governor’s house with Molotov cocktails leading to a string of arrests, and then on the 12th of February, National Youth Day, the opposition marches ended in violence with many public buildings in central Caracas destroyed. Since then the various tyre burnings and blockades in major roads have escalated into permanent barricades closing off entire areas of cities. While these barricades have been responsible for many deaths and caused much disruption across the country, they are only present in a handful of opposition ran municipalities.

 

I have spent the last 6 weeks living in Merida, the capital of Merida state and a stronghold for the opposition, and the middle class area of the main road of Avenida Las Americas has been blocked by barricades resembling a war zone for weeks now. But take a bus for an hour in any direction and you wouldn’t know there was a problem. Recently I went to Elorza in the region “Los Llanos”, a huge flat plain several times the size of the UK, where the place is covered with PSUV propaganda. I took a ride on a mototaxi in solid red with PSUV logos all over it, and a rode in a speedboat with PSUV propaganda covering the engine. The riots in east Caracas and Merida feel as far away as they do in England. It is very important to note that the riots only affect core opposition areas and are not moving into other areas, especially not Chavista areas. As Mike says in his article, he lives in “a middle class dormitory suburb” of Caracas. Now I don’t want to attack him as I’m not about to move to a barrio, but where you live does affect how you view the situation. Presumably this area is in the east of the city, the highest average earnings in Venezuela, solid 80+% vote for the opposition and one of the epicentres of the recent opposition violence.

Click here to read the rest of the article.


Are Corporations Really Hogging Workers’ Wages?

April 10, 2014

Andrew Kliman is the author of The Failure of Capitalist Production. In a new article for truthdig.com he looks at productivity and wages, and dissects the ever expanding gap between them. We’ve reproduced an extract below. You can read the full thing on the truthdig website, here.

Buy The Failure of Capitalist Production with 10% off from Pluto PressWhat if some of the most respected economists in the world told you that as an employee, your pay is 40 percent lower than it would be if it had increased in recent decades at the same rate as your productivity? If you are a typical American worker, that is how large the gap in your pay became by 2011, according to the Economic Policy Institute, one of the most trusted liberal think tanks in the nation.

In its 2012 study, “The State of Working America,” the EPI reported that between 1973 and 2011, the goods and services produced per hour of work (which economists call productivity) in the American economy “grew strongly, especially after 1995, while the typical worker’s compensation was relatively stagnant.” Productivity increased by more than 80 percent in the interim, even after adjusting for inflation, but the hourly compensation of those who held production and nonsupervisory positions increased by less than 11 percent. The EPI contended that this “divergence of pay and productivity has meant that many workers were not benefiting from productivity growth—the economy could afford higher pay but was not providing it.”

The “productivity/compensation gap,” as journalists and academics call it, has become a flashpoint in the debate over income inequality. Equipped with statistics like those produced by the EPI, trusting activists and members of the press point to the supposed gap as proof that corporate profits have been rising at the expense of employees’ compensation—not just since the Great Recession, but throughout the last four decades. (For an example of such a claim, see the piece written by Doug Henwood, editor of the Left Business Observer, in the opinion pages of March 30’s New York Times.)

To read the rest of this article, go to truthdig.com.


‘Black Star’ at Bristol Anarchist Bookfair

April 10, 2014

ARamamurthy T02692s part of this year’s Bristol Anarchist Bookfair, the Bristol Radical History Group will be hosting a series of talks at Hydra Books and we are delighted to announce that Anandi Ramamurthy, author of Black Star: Britain’s Asian Youth Movements (Pluto, 2013), will be one of those invited to speak. The event will be taking place on Sunday 26th April and will be free admission to all who wish to attend. Anandi, a Senior Lecturer in Film and Media at the University of Central Lancashire, will be discussing the issues raised in her book especially the structural and ideological prejudice faced by young Asian people in Britain and their radical political struggles to overcome it.

You can find more information about the event here and why not pick up a copy of the book beforehand so you can come ready to take part in what is sure to be a fruitful and enlightening discussion.


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