France : Mobilising Islamophobia to mask the deepening authoritarian state

Lisbeth Latham

Since the brutal murder of Samuel Paty in October, there has been a ramping up of rhetoric from the French government against the Muslim community in France. This rhetoric came to a head with the announcement of draft legislation to prevent “Islamic Separatism” by French Interior Minister Gérald Darmanin which makes more explicit the state's vision of the Muslim community as a threat to the Government’s vision of Republican values. This attack on the Muslim community, and any critics of racism, islamophobia, or colonialism within French society – is paired with the introduction of new security laws that would further protect France’s repressive state apparatus from scrutiny for violence against France’s social movements -repression which has been dramatically escalating since the declaration of a state of emergency following the terror attacks in Paris in November 2015.

On October 16, Paty, a history teacher, was murdered in Paris, he was publicly beheaded by Abdullakh Anzorov, an 18-year-old Chechen refugee from Russia. The brutal murder had been motivated by Paty’s sharing with students, in a class on freedom of expression, satirical images of the Prophet Mohammed published by Charlie Hedbo in 2015, which had provoked a terror attack on the office of that publication and across Paris. Paty’s display of the images caused significant anger not only within France’s Muslim community, but globally, and followed a familiar pattern of anger at the previous publication of similar images globally. This included the sharing of a video by Abdelhakim Sefrioui an Imam describing the Paty as a thug and denouncing him for displaying the pictures and arguing he should be disciplined.

In the wake of the murder, President Emmanuel Macron described the attack as “a typical Islamist terrorist attack”, whilst describing the motivation of Paty’s murder as being “for teaching children freedom of speech”. Seven people were quickly arrested. This included students who had pointed the teacher out to the killer, Sefrioui, and Brahim Chnina a parent of a student at the school who had protested outside the school and sought a meeting with the school’s principal with Sefrioui’s support. Darmanin made a public statement indicating that up to 51 institutions faced dissolution including BarrakaCity and Collectif contre l'islamophobie en France (Collective Against Islamaphobia in France – CCFI) which he described as being “enemies of the Republic”, and threatened to move to dissolve them. This was despite the fact that there was no evidence that the CCIF, which was formed in 2003 to monitor and combat Islamophobia in France, making any statement supporting the attacks. Darmanin went further arguing that it was an “Islamist dispensary”. French Minister of Education, Jean-Michel Blanquer, also argued that indigenist, racialist, and “decolonial” ideologies,’ imported from North America, were responsible for ‘conditioning’ the violent extremist who assassinated school teacher – a position endorsed by a manifesto of 100 academics published in Le Monde on November 1. This attack on anti-racist academics has prompted a counter open letter against the threat of "threat of academic authoritarianism"

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On November 9, Darmanin announced the final draft of the “law confirming republican principles”. This legislation contained the following proposals: 

• An extension France’s public school student ID system to students enrolled in private schools; Make it an offence to share online information which allows an individual to be identified; 
• Provision for summary trials of individuals accused of “online hate speech”; 
• Make it illegal to intimidate public officials, including teachers; 
• Will allow judges to bar individuals convicted of certain offences, such as provocation of acts of terrorism, or incitement of discrimination, hatred, or violence – from entering places of worship; 
• Requiring associations seeking public funding to agree to "respect the principles and values of the republic" and return the money if found to have flouted the rules; 
• All foreign donations above €10,000 must be declared.

While not stipulated in the bill, the government has requested that France’s Muslim federations form a national council of imams. This council will be in charge of proclaiming new imams. The council must also draft a charter of "republican values", which will stipulate that Islam is a religion and not a political movement in France.

While on the face of it some aspects of this legislation could be seen as necessary protections or limitations, the reality is they are both very vague and open to abuse. This combined with the fact that they are aimed at France’s marginalized Muslim community specifically, rather than France’s Catholic-inspired far-right and neo-fascist organisations reflects a racist vision, shared throughout many western countries, that Muslim communities are the real threat rather than far-right extremist groups.

Coinciding with this assault on the rights of France’s Muslim community. Has been the release of the draft legislation of the “Global Security Law”. This law:

• authorizes the police and gendarmes to film their interventions by "mobile cameras", to access the images they have recorded and to transmit them in real-time to the command post; 
• authorizes the deployment of drones to monitor public space; 
• prohibits the public from disseminating "the image of the face or any other element of identification of an official of the national police or of a soldier of the national gendarmerie when acting within the framework of "a police operation" and when this dissemination is made "with the aim of harming his physical or mental integrity”.

This new legislation has created considerable anger in the context here over the past five years, there have been escalating levels of repression against France’s social movements, most notably the Yellow Jackets, labour and students movements – with “non-lethal” weapons being regularly deployed at protests resulting in injuries, most notably the maiming and death of protestors – with riot squad units in both the CRS (Republican Security Companies) within the National Police and gendarmerie (France’s national police force which is part of the military) acting with impunity against the social movements.

While releasing two such anti-democratic and repressive pieces of legislation would normally be a tactical error, as it would provide an opportunity to unite an even more diverse array of social forces against the bills, in this case, it is likely to have the opposite effect. This is because like the rest of French society, much of the French left and other progressive forces hold deeply Islamophobic outlooks, which are justified on the basis on the need to defend laïcité (the French concept of secularism) and women’s rights. However, these actions, particularly the bans on the wearing of the veil and attempts to control the Muslim community, are premised on anti-secular, racist, and sexist ideas about the right of the state to control not just how people practice their religions, but its right to control the lives of women within the Muslim community.

In the past sections of the French left have supported the ban on the wearing of the hijab in public schools, bans on the burqa and niqab, and participated in attacks on other left parties, like the Nouveau parti anticapitaliste (New Anti-Capitalist Party – NPA), who have stood candidates who wore the hijab. There have also been broader problems of the left being slow or inconsistent in their response to attacks on the Muslim community in France. While some of the left have been very clear regarding their rejection of this attack on the Muslim community, most notably the NPA, other parties have not been so explicit, the Communist Party and France Insoumise however have both argued that while they argue that the law fails to address the marginalization of significant sections of French society and instead seeks to hide the social crisis behind the stigmatization of Muslim communities.

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France: Support for the Collective Against Islamophobia in France in the face of the attacks of Macron and Darmanin!

Nouveau Parti Anticapitaliste
November 20, 2020

Last night, we learned that the Ministry of the Interior had just notified, by mail, the Collective Against Islamophobia in France (Collectif contre l’islamophobie en France - CCIF) of its intention to initiate a plan to dissolve. Gerald Darmanin[1] thus carried out his threatened action and claimed to be acting "in accordance with the instructions of the President of the Republic and the Prime Minister".

By attacking this organization whose role is to combat Islamophobic violence and discrimination, especially including through the support of victims and the publication of an annual report on Islamophobia in France, the government is taking a further step in its authoritarian state policy.

While the content of the pre-bill "separatism" (renamed "strengthening republican principles") has just been made public, confirming that the government continues its headlong authoritarian and Islamophobic rush, the desire to silence the CCIF and, through it, those who stand up against stigmatisation and discrimination against Muslims, is revolting.

Thus, the Minister of the Interior who wants to ban the denunciation of police violence also wants to prohibit the denunciation of Islamophobia. Everyone should understand that these are two sides of the same policy, whose aim is to silence any criticism of their "republican order", at a time when the government's bankrupt failure to manage the health crisis makes it fear social explosions.

The NPA condemns this attack on the CCIF and assures its facilitators and volunteers of all its support in their indispensable action against Islamophobia. It is the whole of the social movement and the labour movement that should now stand against this new authoritarian measure: the future of the anti-racist struggle and, more generally, all the struggles of our social camp are at stake.

[1] Minister of the Interior in the government of Prime Minister Jean Castex

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Capitalist Class Fractions and Socialist Tactics and Strategy

Lisbeth Latham

The last decade has seen the growth in significant differences within the capitalist class, both globally and within individual countries. The open intra-class hostilities reflect the increasing instability and uncertainty within the capitalist system. The uncertainty which is both the result of external factors, such the climate crisis and the COVID pandemic, and also within the system with the ongoing long-run crisis in capitalist accumulation of the past five decades since the end of the long post-war boom.

Within capitalist societies the capitalist class act in the interests of the class and the system as a whole these include: 

• Achieving constant growth in profits; 
•  Achieving a stable environment in which capital accumulation can occur; 
• Stability for the system as a whole;

However, despite these shared interests, conflicts between sections of the ruling class can occur. These different segments of the capitalist class, or class fractions, can develop on both the different needs of the fractions for the accumulation of capital in their specific sector of the economy. This can be a simple as the interests of finance capital versus industrial capital, or export-focused industries versus industries primarily focused on selling within the domestic markets (a conflict that has given rise to historic tensions between pro-free trade versus pro-protectionism wings of the capitalist class) or on differences in subjective political outlook as to how best achieve the interests of a specific class fraction or the capitalist class as a whole. These differences also articulate themselves as conservative versus more liberal wings of the capitalist class, which in itself can have further differentiations.

The primary mechanism via which intra-class conflict within the ruling class has been mediated is through the state and governmental structures. During the early period of parliamentary democracy, when the franchise was more limited in terms of ownership of capital in some form, parliaments held greater power over the state, however as the franchise expanded, and parties emerged that represented the interests of the subaltern classes emerged and there was a danger of these parties gaining control of or having significant influence over the government, the state in many countries became more independent from the government with the creation of career bureaucracies, primarily loyal to the state, and thus the ruling class.

While some sections of the bureaucracy are drawn from the capitalist class, the vast majority of the bureaucracy are drawn from other classes and as the bureaucracy has gotten ever larger and the working class more educated, increasingly from the working class. Whilst this could be seen as a threat, the processes of education and reward tends to build an outlook within the bureaucracy, particularly its leadership (which is overwhelming drawn from sections of the ruling class and increasingly moves freely between capital and the state), that it views its interests with that of the capitalist class.

This relative autonomy, although primarily aimed at mediating and protecting the interests of capitalism, also creates space for these state actors to shift directions and support between fractions of the ruling class, based on either their judgements as to the best interests of capitalism, for a class fraction, or their own interests as a bureaucratic caste. This can also give rise to conflicts within the bureaucracy and between the bureaucracy and the capitalist class fractions most clearly reflected in their more extreme forms in young officer movements and military coups.

Whilst the capitalist class has interests that tend to converge as outlined above, there are periods of time where the interests of individual capitalists or groups of capitalists can diverge from those of other capitalists. Whilst, this can be an objective divergence of interests, it can simply be subjective, i.e. that they believe what they need for their interests to be advanced are different from what other capitalists or the state are advocating or pursuing. This can particularly be the case during periods of crisis, or where new technologies are emerging casting into the question the survival of sections of capital. 

Because the world is complicated, and no one is omniscient, divisions can open up as to how to respond to this uncertainty. These differences may be in relation to the focus re industries to be supported, but it can also be in relation to the level of aggression that should be deployed in responding to challenges to capitalist power. Repression or undermining of rights, whilst they can cement the position of capital and reinforce capitalist accumulation, can also result in unintended consequences. Most notably, rather than forcing the popular classes into retreat, repression can instead intensify class antagonisms and force subaltern groups to defend themselves resolutely, resulting in further destabilisation of the state, the system, or both. It is for this reason that sections of the ruling class, or at least their mouthpieces in the mainstream media, may publicly oppose actions by the government or state which on the face it might appear to be in their immediate interests because those sections of capital have made a judgement that course of action is too dangerous, and ultimately against their interests.

The convergence of interests between subordinate classes and ruling class fractions As conflict occurs between the ruling class and subaltern classes, the intraclass conflicts within the capitalist class can bring into alignment, at least partially and for a limited period, the interests of subaltern class(es) with those of a capitalist class fraction. In these circumstances, it is possible to build alliances with these capitalist class fractions in order to strengthen the position of the subaltern class forces. Doing so is important. Not just because we cannot be indifferent or ambivalent about intra-class conflict within the capitalist class - those conflicts can have dire consequences for the rest of society - but because they can create new opportunities for challenging the system and shattering the class unity which the capitalist system relies so heavily on to reproduce and maintain itself. The classic example of this includes alliances within national liberation struggles which include sections of the national capitalist class which have been in revolt against colonial powers.

Whilst such alliances can be important in bolstering the position of the working class and its allies, any such alliance should only be of a tactical nature, around specific demands where interests converge, and not be strategic in character, most notably this means that the working class and its allies must seek to maintain their independence from the “progressive wing” of the capitalist class fractions and resist efforts by these sections to co-opt the movement, and instead seek to maintain the leadership of the movement. This is not a question political class purity, but a recognition that as conflict escalates, there is a danger that the “progressive-wing” of the capitalist class will move to defend capitalism and support escalating repression against radical forces as these forces become a greater threat to their class interests than other wings of the capitalist class or the course of action which they had been proposing.

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For Green Universities: Insurgent campuses for sustainability

Lisbeth Latham

Climate Strike Berlin

The events of the past few years have repeatedly demonstrated that our planet faces an existential crisis generated by the way our currently existing social systems, dominated by capitalism, have sought to maximise economic growth at the expense of human need and the capacity of the planet to sustain and maintain the biosphere. Urgent action is needed now. This is a reality which has driven millions of people to mobilise to demand action to correct course. However, this action has been slow at best, as capital and its representatives in government continue to prioritise ever-expanding profits over existence itself, in the delusion that they can save themselves whilst destroying the planet. There has never been a more pressing need to transform our societies in order to save both ourselves and the planet. The question is, how can we turn back the neoliberal and capitalist offensive of the past five decades which has seen defeat after defeat of social movements? The reality is, there are no simple solutions, but we are seeing glimpses of what is possible based on the heroic mobilisations of students globally via the Fridays for Future actions initiated by Greta Thunberg in 2018 combined with a broad range of environmental action, and the rapid efforts to transition away from a carbon-based economy.

Urgent need for climate action and capitals continue resistance

The past few years have seen the acceleration of the climate crisis, with record temperatures, record averages, mass melting events, and ever more frequent extreme weather events. This acceleration has highlighted the urgency of heeding the dire warnings outlined in repeated international climate reports that we are fast running out of time to halt or reverse runaway climate change that will threaten the existence of not just human life, but all life on the planet. Despite this, wide sections of capital and their representatives in governments have refused to take sufficient action to address this crisis, but actively seek to deny the necessity for such action.   

Greta Thunberg outside the Riksdag

Student Strikes for Climate

In response to this inaction, beginning in August 2018, Greta Thunberg began an individual strike outside the Swedish Riksdag calling for concrete action to address the climate crisis. This action quickly inspired hundreds, then thousands, and ultimately millions of young people and their supporters to regularly not attend school/work and participate in protests on an ongoing weekly basis punctuated by truly massive internationally coordinated student strikes. This movement has been so inspiring that it has helped to give impetus to calls for, and in some cases actual, workers strikes in support of concrete action to address climate under a range of slogans such as a “Just Transition”, a “Green New Deal”, and a “Green Industrial Revolution”. This dynamic of student mobilisation inspiring and sparking the mobilisation of other sections of the working class is not surprising, indeed it is a long-term continuation of a pattern of mobilisation going back decades. As has been observed, due to their economic position and lived experience, young people tend to be more receptive to radical ideas than older people and are better positioned for extended participation in political actions and mobilisations.

Climate Strike Santiago, Chile

Limits of student strikes
As important as the student strikes have been in building and renewing the strength and confidence of the climate movement in the face of the very real dangers we face - student strikes at both high school and university level have serious limitations which have been repeatedly demonstrated in the experience of student mobilisations internationally is that as student mobilisation increase in size, frequency, and intensity of action particularly if and when they progress to an extended strike, the student strike tactic tends to act to weaken rather than strengthen the power of the student movement. This is because student organisation tends to be centred on their places of study. In extended strikes, students are no longer at school or university, and the mobilisations will tend to dissipate over time as a consequence of students being separated from the institution.

1968 Student Protests Belgrade, Paris, Rio 

Drawing on this observation, and the concrete experience of the global student radicalisation most notably in Yugoslavia, Western Europe, and the Americas, the United Secretariat of the Fourth International (an international Trotskyist organisation) developed a political strategy based not just on student strikes, but on the occupation and transformation of schools and universities into centres of political struggle and organisation through which the struggle can be transmitted and built in the broader community. They dubbed this strategy the “Red University Strategy” - drawing inspiration for the name from the Yugoslav Students’ demand for red universities.

Central to the strategy is not just about students operating individually and collectively as tribunes for an alternative vision of society but also transforming the character of their institutions of learning and their role within society, making them the centres for societal transformation. This is not just about enabling students to protest, or using art studios (and now IT facilities and studios) create campaign material to build the movement - but transforming the curriculum itself to support the envisioning and construction of an alternative society. In our current context this means the development of technology and production practices that will enable us to respond to the challenges of saving the planet.

In seeking this transformation we need to recognise that such a transformation represented a significant break in power relations and class character of learning institutions in capitalist societies, this has become all the more the case in the context of neoliberal late capitalism. Schools and universities operate as transmission belts of pro-capitalist ideas, but more importantly, they reproduce capitalist notions of control and capitalist reproduction. While this is most immediately recognisable in the role they play in the preparation of students to take their place in the workforce of the capitalist economy, but equally importantly the commodification of not just education but also research. This has seen universities as operating in ever-increasing corporatised ways. This has disempowered and alienated both students and university workers. This has occurred as Universities have both massified to provide an ever-increasing number degree qualified workers as governments have sought to shift the cost of education onto students

In order for students to be able to engage in the political struggle in an ongoing way, it is necessary to transform education from a system aimed at achieving “job-ready” graduates but instead encourages the capacity of students to engage critically not just in their chosen fields but in broader society. In doing so, we must break the disciplinary power of university administrations. An objective which is also in the interest of university workers, enabling them to break key components of discipline and control over their working lives.

In addition, transforming universities requires a fundamental transformation of the funding processes in Universities along two key lines. The first is a shift in the conception of education from a commodified individual good, which individual students pay for, which is central to the neoliberal conception of education, and back into a social good supported collectively by society via the payment of taxes, particularly the taxing of the rich and corporations.

Equally important is the reconception of the role of university research both within institutions and within the broader society. Within Australia, government funding priorities have sought to emphasise the role of research to find and develop ideas, technologies, techniques which “boost our comparative advantages and our Boosting the commercial returns from research”. This has led not only a shift away from pure research for the sake of benefiting our understanding and may lead to yet unknown practical applications, but also in developing prioritising funding relationships between universities and businesses - which means research and other university work will prioritise the direct making of corporate profits and maintaining these relationships. While problematic at the best of times, when the majority of major corporations are intimately connected with environmental destruction it is particularly problematic.

General Assembly, University of Grenoble 2019

So what would a “Green University” look like? 
The first thing is that it would need to be controlled by students and staff in sharp contrast to the current dynamics which places power primarily in the hands of unelected senior administrators and university councils/senates dominated by senior executives drawn from the corporate world. This student/staff control should be exercised via mass popular assemblies of staff and students which are a common feature of mass student and staff mobilisations in much of the world, most notably France. Such a body is not simply seeking to be given a say by university management, but instead an assertion of power against university management and the right of staff and students to control and direct the university and an assertion of the right of working people to guide society more broadly.

A Green University would see its obligation not just to make itself more sustainable as an institution, but to help transform society to meet the challenge of the climate crisis. In practical terms, this means seeking to infuse the curriculums with a full understanding of the challenges facing us and prioritising critical engagement with these problems where the addressing of these problems is prioritised over profit. It also means prioritising and supporting research aimed at addressing the climate crisis both within and between institutions - not with the aim of commodifying or monetising that research but instead enabling humanity to respond to the crisis so we can collectively save the planet.

Campus Blockade, University of Strasbourg, 1999

How do we get there?
The reality is that we do not have a movement with the confidence and organisational capacity to currently conduct this struggle with confidence - and we have not had such a movement for decades. Such a movement will not just materialise based on us wishing it into existence. The challenge is to expand and build the capacity of the movement as it exists today. This includes normalising and expanding the existing movement based on building not just concern about the depth and extent of the climate crisis, but by building people’s confidence that via a combination of social mobilisation and practical social action we can address and effectively respond to the current crisis. That such action will require both a change in individual and community consumption but more importantly will require placing pressure on both governments and corporations to act in our collective interests rather than private profit and if they will not do so force them to do so via collective action. A central aspect of this would include:

• Promote at every opportunity organising opportunities that build the capacity and confidence of people to mobilise and that we could win;
• Concentrate on specific demands leading to greater demand, which may currently feel achievable, as the more limited demands are achieved and the movement grows in confidence;
• Build the organs of popular power within institutions based on general assemblies of students and staff;
• Social security payments at a liveable level to support students studying;
• Free universal access to university education, with no time limit or age limit to access;

While the movement that is necessary seems distant from where we are at, the need for such a movement has never been greater and it is only by starting to build such a movement now that it can be achieved.

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Is increasing the superannuation gaurantee the solution to poverty in retirement?

Lisbeth Latham

In 2021 workers are scheduled to receive a point five per cent increase in the superannuation guarantee paid by employers, this increase has become the centre of a new struggle as the government is widely expected to again delay this increase. In response unions, particularly unions representing predominantly feminised workforces, have been trying to build public pressure on the government to not postpone the increase based on the need to combat the problem of retirement poverty particularly amongst women. Largely absent from this discussion has been the question of whether the superannuation system operating within Australia is an effective or appropriate mechanism for providing economic security for in their retirement.

Prior to the 1980s, superannuation schemes were primarily part of industry awards negotiated by unions, and they applied to only a minority of the workforce, predominantly men. The current compulsory employer superannuation contribution scheme was first established as part of the Prices and Incomes Accord under the Hawke Labor government in 1986. The initial employer contribution was set at 3%, this was funded as a deferred pay rise for workers, and thus whilst nominally “paid for” by employers was actually paid for by working people. The idea was the superannuation scheme would help provide a better standard of living for workers in retirement based on three pillars: 

• a safety net consisting of a means-tested government-funded age pension; 
• compulsory employer contributions to superannuation funds; and 
• further contributions to superannuation funds and other investments.

As the scheme was envisioned not as a supplement to the aged pension, but a replacement for it, it was a mechanism by which the cost of supporting retired workers off of the state (and therefore capital), and back onto working people themselves. Moreover, with the majority of workers not expecting to be reliant on the pension, it was politically easier for successive governments to let the aged pension decline as a proportion of the median wage, albeit not by as much as other welfare payments, as a consequence those retirees who were unable to build up a sufficient superannuation fund, and who were forced to rely to rely on the aged pension face a retirement in poverty, highlighted by Australia having the second-highest poverty rates in the OECD amongst people aged over 65, with 35% per cent living in poverty against an OECD average of 14%.

In response to this growing problem of poverty of old age, the Rudd Labor government in 2012 legislated for a stepped increase in the compulsory employer contribution by point two-five of a per cent every year until it reached a super contribution of 12%. However, only the first two increases were made, as following the ALP losing government, the Abbot Coalition government postponed the remaining increases, and they won’t begin until July 2021. As we have gotten closer to the next increase pressure has been building for a further delay, now justified by the COVID pandemic, as a way for businesses to instead use the money to boost the economy by instead using the money earmarked for the increased super guarantee money for wage growth to boost the economy.

Of course, there is no reason to expect a further postponement of the superannuation payment will result in a boost to any part of the economy other than company profits. The previous postponement occurred during a period of record-low wage growth in Australia. Whilst companies will have been factoring the scheduled increase into their bargaining positions, there is no mechanism via which companies can be made to shift the expenditure into higher wages - they would more than likely just pocket it as profits.

However, while the logic for business and the LNP’s opposition to boosting the employer contribution is flawed and deeply cynical, this does not mean that increasing the contribution is an effective way to address poverty in old age amongst working people.

Increasing the employer superannuation contribution will not eliminate inequality in retirement, it is more likely to increase it. This is not to say it won’t boost the potential balances of retirees with projected lower balances, it will, but the primary beneficiaries of any boost in super contributions will be those workers who already have the largest balances. This is because the whole superannuation system is built on an unequal system, where women on average have lower incomes and are more likely to have breaks in their employment. Moreover, it does nothing for those members of the working class who are entirely excluded from the labour market due to injury, disability, illness, or caring responsibilities whose marginalisation from the labour market and resultant poverty extends into retirement.

Average Balances by Age Group 2016

Age	Average Balance - Men	Average Balance - Women
20-24	$5,294	$5,022
25-29	$23,712	$19,107
30-34	$43,583	$33,748
35-39	$64,590	$48,874
40-44	$99.959	$61,922
45-49	$145,076	$87,543
50-54	$172,126	$99,520
55-59	$237,022	$123,642
60-64	$270,710	$157,049

Source: Association of Superannuation Funds of Australia, Superannuation account balances by age and gender 2015-16, October 2017, pg. 9.

Adding to this problem is the fact that whilst Australia’s massive superannuation system is seen as being highly stable due to its size, it is built on and contributes to the instability of the financial markets. At the end of the June 2020 Quarter, the total value of Australian Superannuation assets was $2.9 trillion, approximately 155% of GDP. This massive volume of assets has pumped money into a system driven primarily by speculation - giving the sense superannuation is a guaranteed future income. However,, we have repeatedly seen massive amounts of wealth wiped out of the value of superannuation savings as a consequence of the inherent instability in the domestic and international financial systems - the bulk of which play no productive role in the real economy.

Following the 2008 Global Financial Crisis, the average balanced fund lost 22% of its value. Whilst the average asset value was back at pre GFC balance by 2012, that was just to get back to the level and part of that was based on contributions into the funds not gains in the value of assets. We can expect to see a continued cycle of funds losing huge amounts of wealth and having to rebuild it over time, delivering retirement insecurity and uncertainty to working people.

So what is the solution? While ideally, we would start from scratch with a more equitable pensions system that meets the needs of all working people - such an approach would face significant resistance including from working people, who would see it as a government raid on their retirement savings. In this context, the solution is to maintain the current three-pillar system, but shift the priority onto the old-age pension ensuring that it provides a liveable income to all, so rather than being a safety net is sufficient to provide a comfortable existence and can then be supplemented via other mechanisms. This emphasis would be achieved by generating income by withdrawing the tax-free thresholds from superannuation and instituting a truly progressive taxation system which substantially increases the tax rates on high-income earners, ramps up company tax, and closes the capacity of companies to offshore their tax liabilities.

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Keynesianism Is No long-Term Solution To The Economic Crisis

Lisbeth Latham

The current COVID pandemic has caused massive financial damage to the global economy, damage which has been felt viscerally by working people in the form of dramatically reduced incomes and the loss of millions of jobs. As we progress through the pandemic and look hopefully towards its ending and eventual recovery, minds have begun to look towards what the eventual rebuilding of the economy might look like. Whilst capital, and its representatives in governments, are already looking towards an, even more, deregulated labour market and a general deepening of the neoliberal model, on the other hand, alternative models for recovery are being forward, most particularly that proposed the by the Australian Council of Trade Unions which draws its inspiration from the post-war recovery globally and most particularly in Australia post the Second World War. While this example has understandable appeal, it is well known, it refers to a period of massive and sustained economic growth. It is a deeply problematic model for recovery to the current period of crisis as it fails to understand the roots of the recovery post Second World War which will not be easily replicated but more importantly fails to recognise the broader reality of the global climate crisis that also confronts us, and which should mean we are wary of productivist solutions to this crisis.

The current moment of twin crises of the COVID pandemic and climate change makes it both opportune and vital that progressive forces put forward a vision of a potential course of action. A course which not only facilitates economic recovery but also addresses key questions economic justice. Specifically, this means charting both a course to enable the global transitioning of the economy away from its reliance on fossil fuels and build ever-higher profits. At the same time, this process must also focus on reducing economic inequality both intra- and internationally.

In the wake of the war, the Australian government engaged in a large scale and ongoing social spending which included the building of infrastructure, such as the Snowy River Scheme and helped the Australian economy and society for an extended period of prosperity and helped the Australian economy and society for an extended period of prosperity. This spending and development played a significant part in creating employment in a context which risked mass unemployment. With demobilising armed forces and the waves of refugees that found homes in Australia in the wake of mass displacement caused by the Second World War and reconfiguring of post-war Europe. However, while it is undoubtedly the case that significant government spending was a major factor in this growth; it is not the only story.

It is important to remember that the post-war boom, which was a global phenomenon, occurred in the wake both the destruction and stagnation caused by the great depression and then shattering of the global economy and destruction of capital goods which occurred during the Second World War. This was a period of extended destruction of capital, which resulted in mass immiseration, destruction, and loss of life. This created an opportunity for an extended period of growth - which would not have been possible without this previous destruction. It lay the foundation for extended capital accumulation as countries like Australia were able to profit from the rebuilding much of Europe and East Asia. The ability to experience extended periods of growth was also expanded and extended by the ongoing arms build-up and destruction associated with the Cold War and the imperialist interventions in Korea and Vietnam. In addition, there was an opening up of a wide range of markets to international competition, markets which had previously been closed due to colonial relationships.

The current economic crisis, as devastating and destructive as it is, has not recreated the circumstances of the post-war period in any way. While COVID has unleashed a significant economic crisis as a consequence of a long run over-accumulation of capital, the COVID crisis has primarily stalled the global economy, disrupted in supply chains, and reduced demand and spending power as millions of people have either seen their hours reduced or lost employment entirely. It has not, at least not currently, substantially damaged or reduced the volume of capital goods in the real economy. Particularly not at the level of destruction which would be necessary to enable an extended period of acceleration and growth in profitable investment in the real economy. Which means that it is highly unlikely for the current crisis to reproduce a similar period of growth post the current crisis to that of the post-war boom. 

The significance of this difference can be seen in the what happened to the economies of the advanced capitalist countries at the end of the long-boom, where government stimulus spending was no longer able to smooth the business cycle and enable ongoing growth, but instead resulted in a prolonged period of stagflation, which is characterised by low growth, high unemployment, and high inflation. Any extended attempt at smoothing the business cycle now is likely to result in a similar outcome, particularly, as I will discuss later, as capital is flush with surplus capital.
This is not to say that there should not be an effort to stimulate the economy. Instead, the object of any stimulus should not be modelled on the post-war recovery other than to say it is possible to carry out large scale government spending - just as the government spending of the second world war demonstrated the possibility of massive government spending in the post-war period.

Many small and medium, and some large, businesses will go bankrupt during the current crisis. Any government stimulus should be aimed at supporting these businesses to minimise the impact of any such collapse on the hundreds of thousands of workers employed by them. However, we can see the problem of excess capital in the system even now, where the stock markets globally continue to rise despite being the global economy being in a massive down-turn (admittedly much of this rise isolated to those sections of the stock market that have been seen as a “safe bet”, particularly tech stocks). So government spending in the post-COVID recovery would be best focused on either establishing worker cooperatives or state-run initiatives. Where spending does flow to the private sector it should be tied to the shifting of ownership in part or whole to the state and to establishment and expansion of workplace democracy in those organisations. With a focus then being on a discussion on refocusing these enterprises to meet the needs of society, the workers, their communities rather than achieving private profits.


Chart: All Ordinaries Index 2000 - 2020, source: Market Watch.

Beyond this problem - there is a deeper existential one. Our planet is on the verge of environmental collapse, the biggest threat is climate change, but we have a significantly broader problem, which even if we could achieve a change in the carbon budget, we would be faced with the fact that the planet cannot sustain the need of capitalism to constantly expand and grow. This drive towards growth and expansion is not driven by a commitment to meet human consumption needs - it is entirely disconnected from them and puts human life at risk and threatens to accelerate the metabolic rift being experienced by the planet.

As such while there is space for:

• Expanding manufacturing for transitioning the Australian economy and those of other countries away from fossil fuel-based energy production;
• Growing local manufacturing to reduce our reliance on importing manufactured goods and the associated environmental impact of large scale transport;
• Supporting and funding the transition away from fossil fuels for countries of the global South supporting the development of their local manufacturing and agriculture;
• Construction of public housing with an emphasis on better quality and more sustainable housing stock;
• Expanding recycling industries as part of an effort to reduce our reliance on extractive industries for raw materials;
• Expanding the scope and frequency of public transport;
• Repairing and strengthening of public services, most notably health, education, and research which the crisis has demonstrated have been woefully under-resourced as a consequence of decades of neoliberalism;
• Growth in employment in counteracting the destruction that capitalist development has wrought on the environment;
• Shifting agricultural practices to more sustainable forms;
• Establishment of a conservation body aimed at direct remediation of the environment and ecosystems

There is no space for a drive for an extended period of growth in the output of either capital or consumer goods.

It remains unclear how much work the focuses above would create. Collectively we need to start to re-envision what full-time work is. The focus on a five-day 38-hour workweek has resulted in both problems of unemployment and underemployment which combined was more than 13% prior to the onset of the pandemic in Australia. At the same time, workers in Australia who are employed full-time worked some of the longest hours in the Organisation for Economic Co-operation and Development. This meant that work is extremely unevenly distributed across the labour market. Rather than pushing for full employment based on 38-hour week model, we should be exploring how to more effectively share employment, particularly in socially and environmentally useful ways that will both enable working people to actually benefit from the last three decades growth in labour productivity by evening the spread of working hours, reducing income inequality across the workforce and ensuring those individuals those who are unable to work have their incomes lifted to a liveable level.

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Superwealth: Understanding The Decoupling Of Stock Values From Real Economic Value

Lisbeth Latham

Global wealth inequality is reaching historic highs. Inequalities have been both highlighted and exacerbated by the current crisis. However, while the world’s super-rich are obscenely wealthy, most discourse around this issue fundamentally misunderstands and misrepresents the nature of much of this wealth – which, in turn, can distort our view of what addressing this inequality should look like.

Deindusrialisation and financialisation
As the global, post-war long boom came to an end in the late 1960s and early 1970s, capital began to intensify a range of processes that had been at play in the economies of the advanced capitalist countries. Most notable of these was the process of deindustrialisation, as capital shifted manufacturing from high-wage, heavily organised factories in the metropolitan centres of the Global North to the periphery – initially of the imperialist countries themselves, and then to former colonies and neo-colonies of the Global South.

This shift temporarily boosted profits and provided spaces for these profits to be reinvested, but this was possible only up to a point (though repeatedly, capital shifted from one low-wage country to the next in response to worker organisation and resistance). Capital still faced the problem of what to do with the new profits being generated, and to maintain profit growth the capitalist class sought desperately to find new areas to invest in.

While new technologies have developed and state-owned industries have been pried open through privatisation, the main source for investment and reinvestment of profits was in the financial markets, where new and more bespoke products, with ever more rapid exchanges and turnovers, were developed as mechanisms through which to make money. This process of shifting investment and money out of the real economy and into financial markets is known as financialisation.

The 60 stock exchanges around the world currently have a total capital value of $69 trillion. The growth in financial markets over the 45 years can be seen in the S&P 500 index, which tracks the value of the top 500 stocks and equities on the US New York Stock Exchange, NASDAQ and Cboe BZX Exchange.

The S&P 500 had an average closing price of 21.0 points in 1930. This rose to 86.18 in 1975, and to 3,050.00 in 2020. Similarly, the Irish Overall Index, which has measured the value of stocks on the Irish Stock Exchange since 1989, has grown from a closing price of 1,586 in 1989 to 6,464 on 3 August 2020.

The S&P 500 Index, Historical Chart 1928-2020.

Stock market detached from economic performance
This growth in the value of capitalisation on a stock exchange, while significant, does not necessarily reflect the same level of growth in the real-world performance of the underlying companies and equities. These two factors can be significantly out of step with each other, resulting in financial assets being either significantly over or undervalued.

When they are overvalued, which can occur for a range of reasons, a bubble can form. When the two values come back together, considerable losses, both notional and real, can occur (up until an individual sells their assets all gains and losses are purely notional).

So what does this mean for the wealth of people like Jeff Bezos, Bill Gates and Mark Zuckerberg? These individuals are undoubtedly obscenely wealthy, and they have significant political power based on their wealth and control of large companies that play a central role in the global economy.

However, as impressive as it can sound to say that Bezos is worth $190.6 billion, or that his wealth has increased by $74bn this year, much of this wealth is simply not real. These statements are supposed to sound impressive to build on the myth of these great capitalists ‘creating wealth’.

If we were to seize all of Bezos’s wealth and turn it over to the public good we would not gain $190.6bn. Instead, we would have a – not insubstantial, but far smaller – amount of money, and have a percentage share of a company with an annual revenue of $280.52bn and net profits of $11.588bn, profits that would be sharply reduced as we dismantled Amazon’s super-exploitative employment practices and its parasitic relationship to other businesses.

The reality is that the bulk of the growth in the “value” of Amazon – which has seen its share price increase to a high this year of $3,312.49 compared to an average price of $1,789.19 in 2019 – has not been driven by a significant increase in the performance of the company, but rather by a perception of Amazon and other similar companies as a safe bet by some investors, and by hedge funds looking to make money from speculation based on this perception.

The Financial Times reported on 20 August that we have entered a new renaissance for hedge funds using a macro investment strategy (strategies based on assessment of shifts in geopolitical and macroeconomic trends in countries), saying: “The main fund at Brevan Howard, the firm headed by billionaire Alan Howard, was up over 21 per cent in the first half of 2020; Paul Tudor Jones’s flagship fund at Tudor Investment Corporation has gained 8 per cent through July; and Chris Rokos’s Rokos Capital Management has climbed 24 per cent through to the end of July, according to investor documents and people familiar with the matter.”

It continued: “Caxton Associates has returned 31 per cent this year, according to investors, while a fund run by the firm’s chief executive Andrew Law is up 42 per cent. Meanwhile, Louis Bacon’s Moore Capital, which last year decided to eject the remaining external investors from its flagship funds after a long barren stretch, notched up a 25 per cent gain in seven months through July.”

None of this is to say that we should not aim to nationalise large companies, and put them to the use of meeting the needs of people. But we need to be aware that the amount of real value locked up in these companies is overstated, and has much more to do with stroking the egos of the rich and reinforcing ruling-class myths than it does with the actual potential social good these companies could perform.

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Originally published by the Irish Broad Left.

This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know. 

Top image: Jeff Bezos. Photo by Michael Prince/Forbes.

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