Campaign against War on People

The Indian government intends to deploy 100,000 troops – ostensibly against Maoist insurgents – in 7 states in central and eastern India, including Maharashtra, Chhattisgarh, Orissa, Jharkhand and Andhra Pradesh, a vast area inhabited by tribal groups. Forces withdrawn from Jammu and Kashmir (e.g. Rashtriya Rifles) and the Northeast are joining battalions of CRPF commandos, the ITBP, the CoBRA and the BSF, equipped with bomb trucks, bomb blankets, bomb baskets, and sophisticated new weaponry. Six IAF Mi-17 helicopters will provide air support to these ground forces, in which the IAF’s own special force, the Garuds, will participate. The actual strength of the intended targets of this massive action – the Maoist cadre – is believed to be no more than 20,000. Besides the dangers of any state offensive against any section of the people, the scale of the offensive suggests that the state is unable to distinguish the millions of tribals in this area from the Maoists, and has chosen the quick solution of war on the entire region. Several groups which are not Maoist – like the Vanvasi Chetna Ashram in Dantewada – have been clubbed with them and are being targeted. The basic question is, why is the state planning war against its most deprived, oppressed and impoverished populations?

Central India is rich in mineral wealth that is already being auctioned: Till September 2009, Rs 6,69,388 crore of investment had been pledged toward industry in the troubled areas—14 per cent of the total pledged investments in the country. All that stands between politicians/ big money bags and this wealth is the tribal people and their refusal to consent to their designs. Even constituent bodies of Indian state machinery acknowledge the gross failure of state in the tribal areas of the country in no uncertain terms. The Planning Commission Report on Social Discontent and Extremism, has clearly identified equity and justice issues relating to land, forced displacement and evictions, extreme poverty and social oppression, livelihood, malgovernance and police brutality as widespread in the region. The Approach Paper for the 11th Plan states:

Our practices regarding rehabilitation of those displaced from their land because of development projects are seriously deficient and are responsible for a growing perception of exclusion and marginalisation. The costs of displacement borne by our tribal population have been unduly high, and compensation has been tardy and inadequate, leading to serious unrest in many tribal regions. This discontent is likely to grow exponentially if the benefits from enforced land acquisition are seen accruing to private interests, or even to the state, at the cost of those displaced.

The Fifth Schedule of the Constitution grants tribals complete rights over their traditional land and forests and prohibits private companies from mining on their land. In spite of all this, in the name of fighting the Maoists the state – in blatant violation of Constitutional rights and against the recommendations of its own committees – is all set to evacuate the entire area of the tribals and ghettoise them by forcing them into ‘relief camps’, to allow free rein to big business. Instead of addressing the basic rights and needs of the tribals, the impatience of the state/big business in the face of the stiff resistance from them, is leading it to a full-scale war on people who are already fighting an everyday battle for livelihood and survival.

In the past as well the state has tried to crush all popular resistance, armed or not. It has repeatedly ignored and/or suppressed non-violent resistance, be it in Bhopal gas-victims or the ‘Narmada Bachao’ Andolan. Various human rights activists who have spoken out against its policies have also been targeted through draconian instruments like the Chhatisgarh Special Public Safety Act, 2005. It has also brutally assaulted protesters in Singur, Nandigram, Lalgarh and Khammam and conducted military offensives in Chhattisgarh, Jharkhand, Orissa, West Bengal and Andhra Pradesh that have been seriously questioned. Now, along with an increasingly uncritical, elitist and complicit media, it is set on drumming up war hysteria to legitimise its own extra-Constitutional programs. The fact that it has either rejected or dismissed offers of talks and mediations – while hypocritically calling for them – indicates the extent to which it is invested in this war. The Central Government’s military offensive further dilutes the federal character of Indian democracy as it covertly shifts the maintenance of law and order off the state onto the centre list.

This war on the people also entails a further shrinking of already limited spaces for democratic dissent and articulation of pro people development paradigms. It opens the way for the state to act with force against any form of dissent or struggle. Any individual or organization protesting against the policies of the state can be labelled as a threat to ‘internal security’. To understand the politics and economics of the current state offensive, we urge people to look beyond the current hype being built by the government and pliable sections of the media. This indicates the emergence of a dangerous consensus towards a police state that will render the people and resources pliable to the demands of global capitalism and authoritarianism.

We call upon all progressive forces – students, teachers and workers – to resist the latest plan of the Indian government. Stop state violence against people.

Join our demand for a peaceful, egalitarian and secular society.,
Ph: 9899523722, 9910455993, 9718259201, 9818728298

Militarist Obama and Corporate Nobel: Peaceful Partnership

Saswat Pattanayak

There simply need not be any elements of surprise or shock at Barack Obama receiving Nobel Peace Prize. Almost every year, this award has been granted to neoliberal policy brokers otherwise known as liberals, social democrats, or simply the firm believers in Eurocentric democratic ethos that can be ruthlessly applied on lesser countries via doublespeaks. Obama joins Ahtisaari, Gore, Dae-jung, Trimble, Belo, Walesa, Robles, Esquivel, Begin, Sakharov, Sato, Cassin, Kissinger, Wilson, etc., as the latest torchbearer of the most overrated award in the human history.

Liberal media are attributing his win to moments in anticipation, while conservatives are yet to get over the shock. However, Obama is absolutely worthy of winning the prize and he must be congratulated for the same as a regular recipient of this insipid achievement. Even a cursory look at past few winners should indicate that Obama’s prize perfectly fits.

Last year’s winner, Martti Ahtisaari was almost a NATO agent who worked tirelessly as an anti-communist and aspired to end Finland’s neutrality through his fetishized versions of a corporate Finland as a prosperous Finland.

The year before, Al Gore – a dubious champion of environmental hanky-panky that has no pragmatic basis but plenty of populist boasts with an ability to marry corporate america with Zionist media lobby received the award. Gore’s multi-billion dollar campaigners have been chiefly free market champions who “reformed” Soviet Union and infamous money launderers such as Howard Glicken, Nate Landow and terrorist Rabbi Meir Kahane.

When Kim Dae-jung won the award, he was known as a firmly indoctrinated champion of capitalism, and a tireless communicator in the process of introducing “democracy” in North Korea, the kind of diplomatic talks which can bring down socialistic systems rather smoothly.

David Trimble, a Protestant leader from Ireland hell bent to punish Sinn Fein, the left-wing political wing of the IRA has also been an obvious choice. Comparable to him was a previous winner Carlos Filipe Ximenes Belo, a Roman Catholic bishop appointed to rid East Timor of the last of its radical strands. As though Portuguese occupation was not enough, an illegal encroachment of the country via NATO-backed Indonesia was to be done to eliminate the communists. After its successful atrocities, Belo and Jose Ramos-Horta have become the human face to the “peaceful” interventions in the lives of indigenous peoples through religious pacifications. The peoples can no more demand for reparations in a religious colony.

Lech Walesa, a pronounced reactionary leader in Poland organizing trade unions against the communists, received Nobel merely for such attempts. Alfonso García Robles collaborated with the nuclear powers in order to promote a non-nuclear zone for Latin America without demanding nuclear dismantling of the West. Nobel Peace Prize has traditionally been conferred upon non-agitating peaceniks who like much of social democrats, do not wish to alter the equation of the privileged while ensuring limitations for the oppressed. Dangerous tools are safe in the hands of the mafia, and very dangerous in the hands of the commoners. Nobel prize committees have year after year acknowledged this colonial notion.

Adolfo Pérez Esquivel, another product of Christian missionary position of effecting changes without revolutions- changes as feeble as conversion to a dogmatic religion, was an illustrious winner. Even as vocally opposed to wars and policies led down by the kinds of Bush, the Nobel Peace winners are not the ones who even address the root causes of wars – class conflicts – and have acutely selective memories when it comes to linking the Church with perpetuation of bourgeois wars.

Menachem Begin, a zionist militarist who launched massive attacks against Iraq and Lebanon even before anyone witnessed Gulf Wars was another perfect winner. One of the biggest war maniacs in recent history, he was the architect of Begin Doctrine, way more vicious than any unofficial Bush doctrines the peaceniks have resented.

Andrei Sakharov, an exaggerated dissident who in the peak of cold war was perhaps so oblivious of American expansions that he created a stir through his advocacy in support of the imperialistic intentions; and immediately was conferred Nobel Peace Prize.

Yet another winner was Eisaku Sato, a reactionary conservative collaborator of Japanese-American interests, the principal opponent to Communist China’s recognition as a UN member, and a prime donor to Taiwanese causes. Here was another classic example of a liberal crony of the routine violators of international sovereign policies.

In previous years, René Cassin, chief legal advisor to Charles de Gaulle has won this coveted award, as has George Marshall. Marshall, the post-war propagandist was instrumental in implanting market economies in communist Europe through bribing, investing and coercing.

Albert Schweitzer’s racist stances on African peoples were well known when he won the Nobel Peace for his White Man’s burdens. So was Woodrow Wilson, a racist, segregationist president whose life was marked by pursuance of the American doctrine of imperialism and global hegemony.

Lesser said the better it is about Henry Kissinger, his pronounced hatred for Third World solidarity movements and his war-mongering. If Cold War achieved demise of Communistic alliances globally, it was done through the only weapons the capitalists know of: money, diplomacy and religion. The role of Nobel Peace Committee in converting the interventionists to heroes and legitimizing their methods of covert propaganda operations is unparalleled.

If Dalai Lama through soothing words of peace and spirituality attempted to undermine a peoples’ republic and won the awards through relegating Tibet into ancient conservative times, then it should not surprise anyone why F.W. de Klerk also won on behalf of South Africa. “Non-violence” in our times of global capitalism translates to unconditional surrender on part of the agitating masses to a reformed society. The reforms must take place within the overarching designs of the former colonial masters. Aung San Suu Kyi is another instance of a revolutionary whose limits have been set by Washington DC.

Since the inception of Nobel Peace Prize, an overwhelming majority of the awards have gone to pronounced anti-communists, masquerading as “reformers”. Mikhail Gorbachev is the brightest instance. Second largest category is the Christian religious saints, bishops and preachers. Goes without saying, their roles have been exemplarily complimenting the “pacifist” reformers. Wherever there was communistic presence, the Christian values needed to be imported there to sabotage peoples’ movements. West Bengal in India is a case in point, where Mother Teresa’s Missionaries of Charity had to deserve Nobel Peace Prize through its covert operations of religious conversion, selective care and influence upon CIA-backed dictators in Africa. Communists are bound to agitate the hungry against their class exploiters, but the Saints pacify the hungry through capitalistic charity funds. Who wins the Nobel Peace is anyone’s guess.

Around the time when revolutionary spirits in Latin America was sky-high and Che’s dreams of unifying the region was slowly gaining grounds, Nobel Committee chose Oscar Arias Sánchez who through smooth means, implemented neoliberal economic policies in Costa Rica.

The last category of Nobel Peace Prize winners have great affinity with Zionist causes. The brightest scholar here is Elie Wiesel – the man with the irresponsible claims on the “uniqueness of Holocaust” and one infamous for downplaying or flatly refusing to acknowledge that other genocides caused by the Nazis have any comparable significance. Speaking of Israelis, Shimon Peres and Yitzhak Rabin were certainly not the exceptions.

Deconstruction of “Peace” in Nobel Prize and Lenin Prize:

With so many hardcore militarists (Wilson, Kissinger, Begin, Sato, etc.,) winning Nobel Peace Prize, not to mention scores of illustrious supporters of the aggressive Euro-American bloc during Cold War, how exactly is “Peace” defined by the wise committee?

Nobel jurists further the Eurocentric views of the world and they should not be blamed for it. After all, the people of color, the oppressed people in majority of the world did not have the financial means to combat the advertorial impacts of the aura surrounding this prize. For instance, Lenin Peace Prizes have been awarded to freedom fighters against colonial masters in many African and Asian countries, but the relevance of that great award has never been highlighted as part of collective historical knowledge.

Lenin Peace Prize, that truly revolutionary recognition of the people who strived to bring peace among nations has been relegated to obscurity through sheer exhibitionism on part of the European capitalists disguising themselves under the banner of Nobel. The sheer magnitude of diversity among the winners of Lenin Peace Prize, their roles in dismantling of colonial powers, and their relentless struggles on the sides of the oppressed are testimony to the true acknowledgment of what constitutes peace.

There is a rejoice among people of color upon the Nobel Peace Prize being awarded to Barack Obama. That is just and proper. But what escapes media attention is the fact that Nobel Prizes have been racist awards ever since their inceptions. Not a single black person has won a Nobel Prize in Chemistry, Physics or Medicine. Out of a total of 789 Nobel Prizes conferred thus far, only 11 have been awarded to black people. Out of these 11, one was an economist, three were laureates, and as many as 8 were pacifists!

How does it so happen that whereas black accomplishments are overlooked in every field of life by the colonial powers, they happen to be so useful when it comes to recognizing their peaceful conducts? How is it that the oppressed are awarded not for their agitations, but for their accommodations?

Quite naturally so. Nobel Prizes have been Eurocentric mechanisms to brand those people as the greatest human beings on the planet, that dutifully submit to the whims of colonial and imperial powers. Those people who have put their acts together to intervene in revolutionary situations with their negotiating skills to prevent escalation of class wars. These are the people who have pronounced that the exploiters and the exploited can and must live together in harmony with the class divisions remaining intact. Nobel Prizes are granted to those chosen few among the minorities that have a greater impact over the masses compared to their revolutionary counterparts.

There should not be any surprises. Nobel Prizes are offered by the Royalists, the status quo upholders, the deniers of class society. Their construction of “peace” is determined through their worldview, which comprises the refusal for a replacement of unjust world order, and strong resentment at revolutionary forces. Barack Obama’s win is the most natural continuation of Nobel Peace Prize tradition. Peace in Nobel Prize tradition is capitalistic utopia. In the realist world, peace can prevail only through equitable redistribution of privileges. Capitalism simply cannot accept that. Hence, peace itself has to be redefined.

Contrasted to that, majority of Lenin Peace Prizes were granted to people of color, and a huge majority of them were agitators. These were true proponents of peace for the peoples in the world. Kwame Nkrumah (Ghana), Angela Davis (USA), Samora Machel (Mozambique), Agostinho Neto (Angola), Paul Robeson (USA), Ahmed Sékou Touré (Guinea), Julius Nyerere (Tanzania), W. E. B. Du Bois (USA) were some of the leading freedom fighters against colonialism. Lenin Peace Prizes were also awarded to Pablo Picasso (Spain), Brazil’s Jorge Amado, Saifuddin Kitchlew (India), Pablo Neruda (Chile), Bertolt Brecht (East Germany), Thakin Kodaw Hmaing of Burma, Nicolás Guillén of Cuba, Lázaro Cárdenas of Mexico, Pakistani poet Faiz Ahmed Faiz, Modibo Keïta of Mali, Aruna Asaf Ali (India), Kamal Jumblatt of Lebanon, Salvador Allende of Chile, Lê Duẩn of Vietnam, Miguel Otero Silva of Venezuela, Palestinian poet Mahmoud Darwish, Mikis Theodorakis of Greece, and Abdul Sattar Edhi of Pakistan, among many other undisputed champions of human liberty. When Nelson Mandela was awarded Lenin Peace Prize in 1990, his legacy was not insulted by getting him to share the stage with F.W. de Clark.

In the world revolutionary histories, there are heroes, and there are sycophants. There are radical activists who march on without awaiting an award, and there are naive moderates that fall into grander schemes of manipulated dictums. In its truest sense, Nobel Peace Prize has never been awarded to peace activists barring on a couple of occasions. One worthy winner was Linus Pauling of the United States. The second one was Le Duc Tho of Vietnam. Like another radical Jean-Paul Sartre, Le Duc Tho too, had refused to accept Nobel Prize. Sartre refused to bring glory to racist France, and Le Duc refused to accept the prize at the same terms as Kissinger and to share the stage with him.

Nobel Peace Prize, in reality is an apologist for, and celebration of continued Eurocentric imperialism. Obama is the latest one to have been “humbled”. Amidst his militarist interventions in Afghanistan, Iraq and Pakistan, through his announcements for larger US troops for invasions and bigger budget to feed the military-industrial complex, the Nobel committees have yet again perpetuated a reactionary definition of peace. In their world of successes and achievements, they have merely crowned their King.

Indian Central Government and Sri Lankan Tamils


Indian central government policy on the national question of Sri Lanka has always given priority to India’s regional interests. Policy making has been aimed at not just exercising hegemony over the whole of South Asia but beyond it to cover the whole of Asia. In particular, it has been compelling every South Asian country to accept its role as ‘big brother’. Refusal has been met with threats or attacks under some pretext. Sri Lanka, for example, has experienced this in the past.

Sri Lanka has strategic importance due to its geographic location in the Indian Ocean. The US, the West and India need the island of Sri Lanka in their respective bids for global or regional dominance. It was when JR Jayawardane, out of loyalty to the US, sought to surrender the country to the US, that Indira Gandhi and India took a keen interest in Sri Lanka. The opportunity came when ethnic violence was unleashed on the Tamils in 1983. India used it as pretext to get involved in Sri Lanka and used the issue as a device to serve its own purposes.

The conservative Tamil nationalist leadership, which was incapable of analysing why India showed an interest or assess it from a long term perspective, trusted India in full faith, from its standpoint of narrow nationalism. It was believed that Tamil Eelam will be carved out for the Tamils like Bangladesh was carved out of Pakistan in 1971 by the Indian armed forces under the leadership of Indira Gandhi. Sadly, a vast majority of the Tamil people were convinced to that effect by the Tamil United Liberation Front. The Tamil nationalists also ridiculed the logical arguments put forward by Marxist Leninists who placed before the people the facts and the objective reality to firmly declare that Tamil Eelam was not feasible in this fashion. They even denounced Marxist and socialist positions and expressed to the hilt their loyalty to India. Another group was immersed in its faith in the US and the West which were instrumental in the creation of Israel.

It was amid such developments that India began to strengthen its position to tighten its grip on the whole of Sri Lanka. The present Mahinda Chinthana government suits that purpose very well. Indian economic infiltration has gushed with speed into Sri Lanka, and has developed to the extent that Sri Lanka could soon be considered a strong colonial possession of India. India will not tolerate anything that stands in the way of this development. The chauvinistic government of Sri Lanka and the hegemonic state of India concur on this. The manifestation of this is evident from the activities of the Mahinda Chinthana government during the past three years.

India has resented the influence and interference of the US, the West and Japan in the Sri Lankan national question. There lies the essence of the inherent rivalry for regional hegemony. Having realised that the international allies of the LTTE had a foothold in the US and the West and knowing the implications of Norwegian facilitation and the role of Ranil Wickramasinghe in it, India began to make its moves; and the Mahinda Chinthanaya government made way for it. Indian hegemonic diplomacy started to act on the economic, political and military fronts. Norway was eased out of its role as facilitator. That was followed by closer ties on the military and political fronts with Sri Lanka, through which there were attacks on the LTTE in the Vanni, military success and a ban on the LTTE.

The US and the West, caught in a dilemma in the context of their strengthening ties with India, found themselves unable to do anything in Sri Lanka and maintain an embarrassed silence. The US and the West are on a low key in the face of the bellowing by the Sri Lankan government about its war against terrorism, since they had already banned the LTTE and Sri Lanka followed suit. Under the conditions, it is only the support from Tamilnadu that is a voice of consolation to the Tamils. But anyone who knows anything of the acrobatics of Tamilnadu politics will also know that it is not a sincere and unanimous voice. The political parties of Tamilnadu can only plead with the central government of India but cannot compel it to do anything. It has not happened in the past and it will not happen in the future either.

The central government of India will not come forward to bring an end to the war in Sri Lanka, since the war in Vanni was commenced on its signal. It has provided military assistance in many ways including the supply of arms. After all this, for the Tamil side to plead with the central government and the Tamilnadu state government is a show of weakness arising from the lack of a policy of self-reliance in struggle.

The Tamil parties conduct themselves in a manner where they seem to plead that, irrespectively of whether they are struck, kicked or spat on by India, India remains their master. Is this not an insult to “the self respecting Tamil race”? It is, however, not possible to change this attitude of expectations on the part of the Tamil leadership. Their reactionary politics is marinated with it.

Members of the Tamil National Alliance made several trips to meet the Indian premier Manmohan Singh, but failed to have even five minutes of hearing. It was said that Sonia Gandhi had pledged to Karunanidhi that Pranab Mukherjee will be sent to Sri Lanka. But the one who turned up was Shivashankar Menon who discussed matters of mutual interest. The unending pleas of the TNA which fail to appreciate the implications of these developments only further humiliate the Tamil people. Rival Tamil leaders will not free themselves of this. One after the other they will seek to define themselves as devotees of India. Indian hegemony thus seems to have penetrated at various levels.

In contrast to this, there is a need for the emergence of honest and far-sighted political forces from among the Tamils. Past experiences need to be studied; and decisions should be based on a long-term view of how the right to self-determination within a united Sri Lanka can be won, and about the policies and principles appropriate to the decisions. There should be clear decisions about who their friends and who the enemies are. The ordinary Sinhalese in the South should be persuaded that it will be possible to build a united, strong and prosperous Sri Lanka by the establishment of autonomies and autonomous units for the nationalities as a political solution to the national question.

No struggle could be won merely with brave fighters and modern weapons alone. The struggle should be a people’s struggle where the people decide their own fate and become the heroes of the struggle. On the other hand, a handful of fighters, however brave they may be, cannot fight on their behalf and win. This is the lesson that history has taught us. That “people and the people alone are the motive force of history” should be an unforgettable lesson of history. In a true struggle of the people, the people have never been defeated. The final victory is always theirs. That requires taking a clear and correct line of struggle. To seek the bases for it is what is essential today for the Tamil people.

Translation of article in Tamil, Puthiyapoomi, Jan-Feb 2009
Courtesy: New Democracy – Theoretical Organ of the New Democratic Party (Sri Lanka), February 2009

50 YEARS ON… And the same challenge of making a Revolution

Lázaro Barredo Medina, GRANMA

“THE dictatorship has been defeated. The joy is immense. And yet, there still remains much to do. We won’t deceive ourselves by believing that everything will be much easier from now on; perhaps it will be much more difficult.”

This is what Commander in Chief Fidel Castro told the people on January 8, 1959, the day of his entry into Havana. Many people could never imagine the immense challenge that they would live to experience.

Suffice it to say that just a few days later, Fidel proclaimed the right to self-determination in terms of relations with the United States and immediately, the aggressions, attempts on his life and anger on the part of U.S. politicians began, evidence of which can be seen in speeches and articles of the time, as in an editorial of Time magazine, the mouthpiece of the most conservative sectors, entitled: “Fidel Castro’s neutralism is a challenge for the United States.”

But the Cuban people could not be neutral in the face of the United States. The triumph of the Revolution that January 1959 signified for the Cuban nation, for the first time in its history, the real possibility of exercising the right to self-determination. From that moment on, neither the U.S. president, Congress nor its ambassadors could continue making decisions on what could or could not be done in Cuba. The bitter dependence had been brought to an end; a dependence that saw U.S. governors and ambassadors enjoying a degree of power in Cuba that was far greater than the actual power that they had – with respect to decision-making – within the U.S. federal government or in relation to any of the 50 states that make up the U.S.A.

When full national independence was achieved, the Revolution began to exercise that right by immediately applying the program that Fidel had announced during the Moncada trial of 1953 and which is contained in his historic self-defense speech History Will Absolve Me.

Cuba established the economic and social regime that it believed was most just and established a socialist state with participatory democracy, equality and social justice.

The country’s economy was characterized by limited industrial development, essentially depending on sugar production and a latifundia agricultural economy, where landowners controlled 75% of the total arable land.

Most of the country’s economic activity and its mineral resources were managed by U.S. capital, which controlled 1.2 million hectares of land (a quarter of the productive territory) and most of the sugar industry, nickel production, oil refineries, the electricity and telephone services and the majority of bank credits. Likewise, the U.S. market controlled approximately 70% of Cuban imports and exports, within a system of highly dependent volumes of exchange: in 1958, Cuba exported products worth 733 million pesos and imported 777 million pesos worth of goods.

The prevailing social picture was characterized by a high unemployment and illiteracy, a precarious healthcare, social assistance and housing system for the vast majority of the population, as well as abysmal differences in living conditions between urban and rural populations. There was a high degree of polarization and unequal distribution of income; in 1958, 50% of the population earned just 11% of total income, while a 5% minority controlled 26%. Racial and gender discrimination, begging, prostitution and social and administrative corruption were widespread.

Addressing the social and economic problems in Cuban society could no longer be put off and could only be resolved if the Cuban people had control of their own wealth and natural resources. Thus, using the 1940 Constitution and in line with international law, Cuba exercised its right to take control of these resources and assumed total responsibility for this action. The island paid compensation to all nationals from third countries (Canada, Spain, Britain, etc.) with the exception of U.S. nationals, given that that government rejected the provisions outright and transformed the Cuban government’s decision into a pretext for unleashing a war unprecedented in the history of bilateral relations between the two nations.

Not only did the Revolution hand over land to campesinos who, up until then, had been subjected to semi-feudal conditions of production and forced to live in extreme poverty, but it also determined that that all the country’s resources should be allocated to national economic development and improving the material and living conditions of the population. To give just one example, in the 1980s alone, approximately 60 billion pesos were allocated to the construction of productive and social facilities.

The process of industrialization underway paved the way for economic and productive diversification. Under the Revolution and up until the economic crisis which began with the disintegration of the Soviet Union and the East European socialist bloc between 1989 and 1991 – what we in Cuba call the Special Period – the country’s capacity for producing steel grew 14-fold, fertilizer increased six-fold, the oil refining industry quadrupled (not counting the new refinery in Cienfuegos), the textile industry grew seven-fold, tourism three-fold, to mention but a few. The state also created complete ranges and new industries such as machinery, mechanics, electronics, the production of medical equipment, a pharmaceutical industry, construction materials, a glass industry and ceramics, as well as making investments to increase and upgrade the sugar, food and light industries. In addition to these endeavors, we have the development of biotechnology, genetic engineering and other branches of science.

The country has also made great efforts in terms of improving its infrastructure. Electricity generation has risen eight-fold and water storage capacity has increased 310 times, from 29 million cubic meters in 1958 to nine billion-plus cubic meters today. There has been diversification with respect to roads and freeways and modernization of ports and other areas. Social needs have been covered fairly well, except for housing, which has been Cuba’s biggest problem.

The progressive growth and diversification of productive potential and the application of a widespread social program has allowed the nation to confront the problem of unemployment. In 1958, with a population of six million inhabitants, approximately one third of the economically active population was unemployed. Of this figure, 45% of the unemployed lived in rural areas while, out of 200,000 women in work, 70% were employed as domestic servants. Today, with 11 million inhabitants, the number of people in work is in excess of 4.5 million. Over 40% of workers are women and today they represent more than 60% of the nation’s technical and professional sectors.

In 1958, the number of illiterate and semi-illiterate people in Cuba stood at two million. The average academic level of 15-plus year-olds was third grade, more than 600,000 children did not attend school and 58% of teachers were unemployed. Just 45.9% of school-age children were enrolled and half of them did not attend classes. Only 6% of those enrolled finished elementary education. Universities were available to just 20,000 students.

The education sector received immediate attention from the revolutionary government. Its first task was to develop a masse literacy campaign with the participation of the population. An extensive network of schools was constructed throughout the country and more than 300,000 teachers and professors were in fulltime employment in this sector. The average academic level for those aged 15-plus year-olds rose to ninth grade. One hundred per cent of school age children are enrolled in schools, some 98% complete elementary education and 91% complete junior high. One in every 11 citizens is a university graduate and one in eight has technical-professional qualifications. There are 650,000 students in the country’s universities today and all education is free of charge. Education and vocational skills are also guaranteed for 100% of children with physical or mental disabilities, who attend special schools.

The precarious situation in 1958 with respect to public health was characterized by an infant mortality rate of 60 per 1,000 live births and a maternal mortality rate of 118 per 10,000. The mortality rate for those suffering from gastroenteritis was 41.2 per 100,000, and from tuberculosis, 15.9 per 100,000. In rural areas, 36% of the population suffered from intestinal parasites, 31% from malaria, 14% from tuberculosis and 13% from typhoid. Life expectancy at birth was estimated at 58.8 years.

Around 61% of hospital beds and 65% of the nation’s 6,500 doctors were concentrated in the capital. In the other provinces, medical coverage was one doctor for every 2,378 inhabitants and there was just one hospital for all the country’s rural areas.

Today, healthcare is free of charge and Cuba has more than 70,000 doctors, providing coverage of one for every 194 inhabitants. Almost 30,000 of them are providing services in over 60 different countries. A national network of more than 700 hospitals and polyclinics has been created. Thanks to a widespread vaccination campaign (every child currently receives vaccines against 13 different illnesses) diseases such as polio, diphtheria, measles, whooping cough, tetanus, rubella, mumps and hepatitis B have been almost entirely eradicated. The infant mortality rate is 5.3 for every 1,000 live births and life expectancy exceeds 77 years.

There is also a series of advanced medical services that are not considered as “basic” in the international arena, and are provided completely free of charge, such as intensive care units in pediatric and general hospitals, cardiovascular surgery, transplant services, special perinatal care, treatment for chronic renal failure, and special services for occupational and physical rehabilitation.

The revolutionary state did not focus its attention solely on economic and social measures. It also embarked on efforts to establish an internal legal system to facilitate the right to self-determination via the population’s direct participation in discussions, analyses and the passing of the country’s principal laws. The most notable of these was the 1976 Constitution, supported by 97% of Cubans aged 16 and over through a referendum, as well as other momentous laws like the Penal Code, the Civil Code, the Family Code, the Children and Young People’s Code, the Labor and Social Security Code and many others.

Likewise, the self-determination of the Cuban people is expressed through the right to defend the nation against foreign aggression. Today, more than four million Cubans – workers, campesinos, and university students – are organized in militia groups have access to weapons in their campuses, factories and in rural areas.

However, since 1959, Cuba has had to confront the hostility of 10 U.S. administrations that have attempted to limit its right to self-determination through the use of aggression and the unilateral imposition of a criminal economic, commercial and financial blockade.

One of the universally accepted principles of international law is that state cannot be allowed to coerce another in order to deny it the right to exercise its sovereign rights. Article 24 of the UN Charter states that, in the context of international relations, nations must refrain from using threats or force against the territorial integrity or political independence of any state.

Over the past 45 years, the United States has prohibited any trade with Cuba, including foodstuffs and medicines; it cancelled the Cuban sugar quota; prohibited its citizens from traveling to Cuba via the imposition of heavy sanctions; prohibited the re-export of U.S. products or items containing U.S. components or technology to Cuba from third countries; prescribed that banks in third countries should maintain Cuban bank accounts in dollars or use that currency in their transactions with the Cuban nation; has systematically intervened to prevent or hinder trade with or financial assistance to Cuba on the part of governments, institutions and citizens from other countries and international organizations.

In the 1960s these reprisals forced Cuba to structurally reconstitute its economic relations when and establish its essential markets in countries in the former East European bloc – specifically in the Soviet Union – which meant that the country had to embark on an almost total re-conversion of its industrial technology, means of transport, and provisions, etc.

When Cuba lost its natural markets in Eastern Europe, the U.S. government intensified its blockade via the 1992 Torricelli Act, which used the pretext of “democracy and human rights” to prohibit U.S. subsidiaries located in third countries and subject to the laws of those nations from engaging in commercial or financial operations with Cuba (particularly in respect to food and medicines), and punishing these by prohibiting the entry into U.S. ports for 180 days of vessels transporting goods to or from Cuba or on behalf of Cuba, measures that – given their extraterritorial nature – do not just prejudice Cuba but also harm the sovereignty of other nations and the international freedom of transportation.

On March 12, 1996, the U.S. government passed the Helms-Burton Ac, further aggravating relations between the two countries and assuming the right to sanction citizens of third countries in U.S. courts, as well as determining their expulsion or denying them and their families entry visas into the United States, with the aim of hindering Cuba’s efforts to recover its economy and hampering its possibilities of securing a greater insertion in the international market. That was also a way of attempting to pressure the Cuban people into relinquishing their efforts of self-determination.

More recently, it has adopted the Bush Plan, an attempt to transform Cuba into a colony through an annexationist program and the sibylline intention to intervene via a pretext of “transition,” a scenario in which the State Department would entrust one of its leaders as “governor,” when the Cuban revolutionary state disappears. This plan, with which George W. Bush decided “to precipitate the day when Cuba becomes a free country,” has intensified the blockade and pressure on the Cuban people by repressing family relations between Cubans resident in the United States and their families on the island; grants million-dollar resources to terrorist groups in Miami, as well as to mercenary subordinates in the U.S. Interests Sections in Havana; and promotes formulas to destabilize the country and redouble international pressure on the island.

That hostility on the part of the U.S. has included other notorious manifestations of aggression, ranging from the military aggression through the Bay of Pigs in 1961, the dirty war carried out by counterrevolutionary gangs heavily supplied by the U.S. CIA, bacteriological warfare on agricultural crops (sugar, tobacco, and citric fruits), animals (swine fever), and humans (hemorrhagic dengue), to sabotage plans, bombings using pirate planes, and assassination attempts on the country’s principal leaders.

The actions of terrorist organizations executing military attacks on Cuba from U.S. territory are notorious, and are publicized and fomented by the Miami media. Groups are constantly recruiting adventurers who are willing to head off to Cuba as agents and saboteurs, who openly declare that they have no fear whatsoever of being brought to justice in U.S. courts.

That is why Cuban patriots have had to leave aside their personal interests to serve those of the nation, even sacrificing their family relationships, in order to infiltrate the ranks of those terrorist groups in order to discover their activities and, with this information, prevent the bloodshed of Cuban and U.S. people. They are willing to pay the price of the political irrationality of the U.S. government, as is the case of the five Cuban heroes unjustly incarcerated in U.S. jails for combating terrorism.

The above is compounded by the heavy military mechanism created by the United States around Cuba and its constant tension-generating activities, as well as the illegal occupation of the Guantánamo Naval Base on Cuban territory (today converted into a horrific prison camp), a part of Cuba rented out by force to the United States in the early 20th century and which the U.S. government refuses to return.

In the early 90’s, with the disappearance of the Soviet Union, isolated and reviled by the international reaction, Cuba absorbed the terrible blow of losing the bulk of its markets in a matter of months and an abrupt descent in its gross domestic product. But the island confirmed that it shone with its own light and that it had never been a satellite of anyone, given that it was able to face that juncture on account of the extraordinary resistance of the majority of Cubans, who have acted on the basis of authentic motivations, values and ethical principles.

The Cuban people have made a conscious decision to support the country’s leadership, not only because they identify the system with their own interests, but also because of the responsible manner in which the state took on the crisis, reorganized its forces and designed a recovery strategy, despite the U.S. blockade and conditions imposed by its European allies.

The sacrifices provoked by that situation have been hard, but it has been possible to endure them because of the undisputed social advances attained, because of the confidence deposited in the country’s leading institutions and because of people’s appreciation that their government is not a decadent one or one that is in management crisis or lacking in strategies, but has confirmed that the population has remained at the center of all its work, even in the most difficult circumstances.

Fifty years have gone by and the liberation process has reached this point following the same direction indicated that night, 50 years ago, when Fidel, speaking to the huge crowd awaiting him in what was the dictatorship’s headquarters, affirmed that everything could be more difficult in the future, because we would have to fight to make the Revolution.

That is the challenge of the struggle currently underway to eradicate vices and exalt virtues, with Fidel as a soldier of ideas serving as a compass in the fight for freedom and independence.

Cuba’s enemies are backing their all on the opposite of that. In this world, where politics is a caricature, they cannot comprehend that, in its thinking and action, this Revolution is a process of continuity, and that Fidel will continue to be the leader of the Revolution of today and tomorrow, because, beyond responsibilities and titles, he will continue to be the counselor of ideas to which we will always have recourse, because he has transcended political life to insert himself in an intimate way in the family life of the vast majority of Cubans.

Courtesy: GRANMA

Global Economic Crisis-II

Deepankar Basu

Link to “Global Economic Crisis-I”

Short-term: The Sequence of Events

Even though the credit crisis attained dangerous proportions only in mid-September, it had already announced itself in the early part of the year with the collapse of Bear Stearns, one of the five famed investment banks that defined Wall Street; today none of those five investment banks – Bear Stearns, Goldman Sachs, Lehmann Brothers, Merril Lynch and Morgan Stanley – exist, an indication of the depth of the crisis. Faced with a fierce run on it’s dwindling reserves and it’s stock plummeting, Bears Stearns was forced to sell itself off to J P Morgan Chase (one of the largest commercial banks in the US) on March 16, 2008. The next three months could be best described in terms that the police often use in India: tense but under control. On July 01, the next piece of bad news emerged and shattered the uneasy calm: Country Wide Financials, the largest mortgage seller in the US, collapsed and was acquired by Bank of America (one of the largest commercial banks in the US). Following closely on the heels of this event, IndyMac bank failed – the second largest bank failure in US history – and was taken over by the Federal Deposit Insurance Corporation (FDIC), one of the institutions responsible for monitoring the health of the banking system in the US. IndyMac was, unsurprisingly perhaps, part of the Country Wide financial family.

Things started speeding up in September. On September 08, Freddie Mac and Fannie Mae, the two government supported enterprises (GSE) operating in the mortgage market was nationalized, with assets of the two entities totalling to more than $ 5 trillion. On September 15 another of the five famed investment banks, Lehmann Brothers, filed for bankruptcy; Lehmann’s assets were a little over $ 600 billion and this made it’s bankruptcy filing the largest in US history. Next day, the Fed stepped in with a $ 85 billion loan to prevent American International Group (AIG), the largest insurance firm in the US from going under. These two events, Lehmann’s bankruptcy filing and AIG’s rescue, sent shock waves through the world financial system. The result was a rapid erosion of faith in the financial system leading to a veritable credit freeze: financial institutions stopped lending, to other financial institutions, to businesses and to consumers.

The next thirty six hours, from the morning of September 17 to the evening of September 18, accelerated the credit crisis to extremely dangerous proportions and convinced the US Treasury and the Federal Reserve that government intervention of unheard magnitudes (at least since the Great Depression) would be necessary to prevent total financial collapse. Ben Bernanke, the chairman of the Federal Reserve (the US Central Bank), was famously reported as saying, at one point during this 36 hours, that if the government did not save the (financial) markets now there might not be any financial markets in the future. So, what happened during those crucial 36 hours?

The crucial 36 hours

The first indication of a severe stress in the financial system was a shooting up of credit default swap (CDS) rates, especially on Morgan Stanley and Goldman Sachs (two of the famed five Wall Street investment banks) debt, during the early hours of September 17. Credit default swaps are insurance contracts that can protect bondholders against the possibility of default. For example if an investor has bought bonds worth $ 1 million issued by firm A, then the investor can also buy CDS – typically issued by financial institutions like large commercial banks, investment banks or insurance companies – to protect herself against a possible loss resulting from firm A defaulting on it’s bonds; the premium that the investor pays for the CDS is called the “rate” or “spread” and it is typically around 2% of the amount insured (the “notional value”). So, in the case of this example, the investor would pay $ 20,000 to buy CDS and if firm A were to go under, then the “counterparty” to the CDS contract (i.e., the financial institution that issued the CDS to the investor) would step in to pay the investor $ 1 million and the interest on that amount.

CDS rates (i.e., the premiums that are paid on the insurance contracts) are, thus, an indication of the market’s belief about the possibility of default of some institutions; CDS rates on bonds issued by firms are typically low when the market thinks the probability of default of those firms are low and high when the market thinks the probability of default are high. Thus, on the morning of September 17, when CDS rates went through the roof, this provided evidence of severe loss of faith in the financial system.

When investors lose faith in the financial instruments issued by private parties, they turn back to those issued by the government and that is what happened when CDS rates multiplied by close to a factor of five. Investors let go of private financial instruments like hot bricks and rushed into US government securities, a phenomenon often described as “flight to safety”. The US government, i.e., the US Treasury department, issues three primary kinds of securities: T-bills, T-notes and T-bonds (where the “T” stands for Treasury), where bills mature in less than a year, notes mature between one and ten years and bonds are of longer maturities than a decade. When investors lost faith in the private financial system, they rushed in to US T-bills, the short-run heavily-traded ultra-safe US government securities. This huge rush into T-bills pushed up the price of T-bills and drove the yield (i.e., interest rate) on T-bills down. At one point in time, during this 36 hour period, the yield on T-bills was pushed down all the way to zero (the lowest it can ever go to) implying that investors were willing to hold T-bills even though the nominal return was zero and real returns were negative (because the inflation rate was positive).

As private investors were madly rushing into the safety of US T-bills, another important event was unfolding in the mutual funds market. Money market mutual funds (MMMF) are financial institutions that have become popular over the last three decades, especially in the US. They typically work as follows: investors put their money in MMMF’s by purchasing shares in the MMMF’s stock; thus the MMMF becomes a mechanism for pooling huge amounts of money and then using those large sums for investing in a very diversified portfolio of financial assets, thereby making the investments extremely safe. Thus MMMF’s were, till September 17, thought to be as safe as a deposit account in a commercial bank, and the added advantage was that the money invested in MMMF shares would give a positive rate of return as opposed to a deposit account which is usually non-interest bearing. On September 17, one of the oldest and largest MMMF’s, Reserve Primary Fund, “broke the buck”, i.e., it made losses on it’s investments such that it could not guarantee a positive return to it’s shareholders. Every dollar invested in Reserve Primary was now, by it’s own admission, worth less than a dollar. This was an unheard of event and as news of Reserve Primary Fund’s losses spread, investors started pulling money out of MMMFs.

This had a very negative consequence for the real economy because of the serious involvement of MMMFs in the commercial paper (CP) market. Businesses typically need to constantly borrow short-term funds to keep their operations going; these borrowed funds go towards funding payroll, paying suppliers, maintaining inventory, etc. Firms, at least the big ones, usually borrow short-term funds in the US by issuing commercial paper (which is essentially a bond with a short maturity of about a week or a month). Who buys commercial papers? The most active institutional investors in the CP market are the MMMFs; some of the largest chunks of commercial papers are bought by the MMMFs. So when the MMMFs faced an increasing spate of withdrawal, in the wake of Reserve Primary Fund’s breaking the buck, they stopped buying commercial paper. This, essentially, meant that the CP market ground to a halt. Thus businesses were no longer able to borrow the short-term funds that they need to keep operating. The economy, by all means, shut down.

Adding to and going hand-in-hand with these processes were the growing problems in the interbank (lending) market. Commercial banks typically lend and borrow banking system reserves (roughly the sum of currency in the banks’ vaults and the amount they hold in their account with the Central Bank) among themselves for very short periods, usually overnight periods. The interbank lending market that is most closely watched is the London interbank market and the rate at which loans are made in this market is the London Inter Bank Offered Rate (LIBOR). The most important characteristic of loans in the interbank market is that they are unsecured, i.e., they are not backed by collateral. Thus, a bank can get a loan in the interbank market only if other banks consider it financially sound; thus when the LIBOR jumps up suddenly it provides evidence that the largest and the best banks in the world have lost faith on each other. On September 17, the LIBOR shot up giving indication of increasing strain in the interbank market.

It was these sets of events – CDS rates shooting up, closing down of the CP market, increasing strain in the interbank market – that spooked the US administration and convinced them of the necessity of the most extensive government intervention in the financial markets since the Great Depression. These crucial sets of events were precipitated by the string of big financial failures that the US economy had witnessed over the first two weeks of September: the failure of Fannie and Freddie, the bankruptcy of Lehmann and the near-collapse of AIG. It was these failures that led to a rapid loss of faith in the financial system and heralded a full-blown credit crisis. And why did Fannie and Freddie and Lehmann and AIG fail? All these financial institutions failed because at crucial points in time they could no longer raise money from the market to finance their assets, i.e., they could not borrow money or roll over their short-term debt; financing, for these institutions, had dried up. And why did financing dry up for these big and reputed financial institutions? Because each of these, in their own ways, were exposed to the subprime mortgage market and took huge losses when the subprime mortgage market started unravelling. As news of these failures spread, investors, fearing losses, became increasingly unwilling to lend money to these institutions.

(To be continued.)

Krugman’s “great illusion”

Pratyush Chandra

Economist Paul Krugman in his latest column in NY Times (Aug 15, 2008) entitled “The Great Illusion” expresses his concern at the possibility that “the second great age of globalization may share the fate of the first”. And it is the recent Russia-Georgia conflict that makes him say so. To be more explicit he goes on to explain that “our grandfathers lived in a world of largely self-sufficient, inward-looking national economies — but our great-great grandfathers lived, as we do, in a world of large-scale international trade and investment, a world destroyed by nationalism.”

Krugman’s above statement clearly shows his lack of any historical sense. When was that “world of large-scale international trade and investment” free of (militarist) nationalism – a mechanism to protect that “large-scaleness”? And much of the “nationalism” which destroyed that world was in fact a revolt against that “large-scale” militarism. Yes, it destroyed the Pax Britannica – it was a war against the war monopoly.

On the one hand, Krugman seems to tell that national self-sufficiency at least with regard to “the current food crisis” is at last clearly shown to be not “an outmoded concept”. But he is in fact accusing nationalism of “many governments” for “leaving food-importing countries in dire straits”. He further finds that there is a rise of “militarism and imperialism” as “it does mark the end of the Pax Americana — the era in which the United States more or less maintained a monopoly on the use of military force. And that raises some real questions about the future of globalization”. Obviously, for him, “Russian energy” and Chinese big economy are the real threats as they have the capacity to manipulate world polities and economies to submission.

Then what is the Pax Americana? Is it not militarism, imperialism and manipulation, that we witnessed throughout the 1990s and afterwards? When did war-mongering and militarist build-up end during the “Pax Americana”? Increasing manipulative capacities of other countries and their political economy at the most demonstrate a globalization of “militarism and imperialism”.

Krugman rightly questions those analysts who “tell us not to worry: global economic integration itself protects us against war, they argue, because successful trading economies won’t risk their prosperity by engaging in military adventurism”. He thinks “the foundations of the second global economy” are solid than those of the first only “in some ways”, “[f]or example, war among the nations of Western Europe really does seem inconceivable now, not so much because of economic ties as because of shared democratic values”. So euro-centric Krugman, like Stiglitz, ultimately thinks the West not to be adventurist because of its democracy, but ah! “much of the world, however, including nations that play a key role in the global economy, doesn’t share those values”. So does he think the Pax Americana to which the West has submitted is about peace and democracy, which is now being threatened by the despotic Orient?

Krugman rightly concludes that “the belief that economic rationality always prevents war is an equally great illusion”. But like any other ordinary bourgeois he thinks economic rationality can prevent war when coupled with “democratic” values of the West. Obviously he can’t see the fact that economic rationality is about competition, representative democracy is about competition, and a war is competition par excellence. They are all ultimately the same – diverse moments in the life of “social capital”(1). Krugman refuses to recognize that capital whether protected by democratic regimes or not is at constant war against labour – which needs to be divided and controlled if it is to be exploited – and Western xenophobic megalomaniac nationalisms have always been nurtured for this reason. Where is the country in the West free from state-sponsored Ku-klux-klanesque policies and activism against migrants and “the other”? The neo-capitalist regimes have learned their lessons properly – obviously at the cost of threatening the established monopolies. It is not an end of globalization, as Krugman prognosticates, but a new stage – and a more barbaric stage – of capitalist globalization.


(1) “Here social capital is not just the total capital of society: it is not the simple sum of individual capitals. It is the whole process of socialization of capitalist production: it is capital itself that becomes uncovered, at a certain level of its development, as social power”. (Mario Tronti (1971), “Social Capital“)

Perspectives on the US Financial Crisis

Sam Gindin and Leo Panitch

It is time to take stock. The centrality of the American economy to the capitalist world – which now literally does encompass the whole world – has spread the financial crisis that began in the U.S. housing market around the globe. And the emerging economic recession triggered in the U.S. by that financial crisis now threatens to spread globally as well.

Capitalism has had an incredible run – politically and culturally as well as economically – since the stagflation crisis of the 1970s. The resolution of that crisis required, as economists put it at the time, ‘reducing expectations’ of the kind nurtured by the trade union militancy and welfare state gains of the 1960s. This was accomplished via the defeats suffered by trade unionism and the welfare state since the 1980s at the hands of what might properly be called capitalist militancy. This was accompanied by dramatic technological change, massive industrial restructuring alongside labour market flexibility and the over – all discipline provided by ‘competitiveness.’

That discipline brought with it an enormous increase in economic inequality, the spread of permanent working class insecurity and the subsumption of democratic possibilities to profitable accumulation. But this did not mean capitalism was no longer able to integrate the bulk of the population. On the contrary, this was now achieved through the private pension funds that mobilized workers savings, on the one hand, and through the mortgage and credit markets that loaned them the money to sustain high levels of consumer spending on the other. At the centre of this were the private banking institutions that, after their collapse in the Great Depression, had been nurtured back to health in the postwar decades and then unleashed the explosion of global financial innovation that has defined our era.

The question begged by the current crisis is whether capitalism’s capacity to integrate the mass of people through their incorporation in financial markets has run out of steam. That the fault line should have appeared in ‘sub-prime’ mortgage loans to African-Americans is hardly surprising – this has always been the Achilles’ heel of working class incorporation into the American capitalist dream. But an economic earthquake will actually only result if there is a devaluation of working class assets in general through a collapse of housing prices and the stock and bonds in which their retirement savings are invested.

The state and financial crises

We are by no means there yet. The role being played to prevent just this by the Federal Reserve, very much acting as the world central bank in light of the global implications of a U.S. recession, should once and for all dispel the illusion that capitalist markets thrive without state intervention. It was through the types of policies that promoted free capital movements, international property rights and labour market flexibility that the era of free trade and globalization was unleashed. And this era has been kept going as long as it has by the repeated coordinated interventions undertaken by central banks and finance ministries to contain the periodic crises to which such a volatile system of global finance inevitably gives rise.

The Fed has repeatedly poured liquidity into its financial system at the first sign of trouble. The question is whether the capacity of the system to go on integrating ordinary Americans though the expansion of investor and credit markets in this way has reached its limit. This was indeed suggested by the Bush administration’s sudden (non-military) Keynesian turn with a $150 billion fiscal stimulus. However, that fiscal stimulus at the federal level may be undone at the state level, especially with municipal government cutbacks, given their massive dependence on property taxes. The way financial institutions that specialized in selling risk insurance on municipal bonds were enveloped in the credit crisis has further compounded the problem. This indeed brings to mind the extent to which it was municipal governments that were on the front lines of the Great Depression.

But while the U.S. may very well move into a recession, which even when it ends may mark the beginning of a new era of slower growth, this is very different from a Depression. While there is no doubt that mortgages in black communities and for the working poor more generally will be tightened, it seems most likely that banks, competing for markets, will continue to extend credit to working families more generally. we need to remember that the top twenty per cent and their families are extravagant consumers. While growing inequalities are grotesque, the left has consistently underestimated the extent to which the rich can sustain overall spending. The ‘correction’ in the dollar (alongside the strength of U.S. manufacturing in the higher-tech sectors) has already led to offsetting growth in markets abroad; U.S. exports have been growing at double-digit rates over the past few years.

Finally, the U.S. state may revive its capacities for substantive infrastructural spending, if only to stimulate the construction industry now that the housing boom is over. Indeed, even from the perspective of competitiveness and accumulation there is a long-neglected need to rebuild U.S. infrastructure – as the collapsed levies of New Orleans and the collapsed bridges of Minneapolis dramatically showed. The type of state intervention that brought us financial globalization is not well suited to this, but this crisis may finally force some renewal of state capacities in this respect, even within the overall framework of neoliberalism.

Finance and Neoliberalism

There is an understandable tendency on the left to take hope in capitalism’s current dilemmas. The extreme liberalization of finance (and along with it the era of neoliberalism) seems discredited. Finance today appears as no more than high-flying speculation – absurdly wasteful and ultimately not sustainable. U.S. corporations remain profitable, but with the credit crunch, who will buy the goods? Discredited as well, it therefore appears, is the U.S. capacity to keep its own house in order, never mind lead the process of globalization. Yet before we assume that the openings created by this crisis place us on the verge of a matching new oppositional politics, we need a more careful reading of our times. While the new openings provide the space for a new politics, we need to soberly appreciate the problematic link between such openings and a radical response.

To begin with, as immoral and irrational as finance might seem, financialization has been absolutely essential to the making and reproduction of global capitalism. Second, the growing consensus that finance must be re-regulated is hardly an attack on finance or neoliberalism more generally. Rather, it is about the engineering of finance so it can continue to be ‘innovative’ in the service of both itself and non-financial capital. Third, whatever problems the U.S. currently faces, its dominance will not fade because of a crisis in housing or a lower exchange rate; it does us no good to underestimate the staying power of the American capitalist empire.

It is not only finance but capitalism in general that rests on speculation. Behind a new firm or a new product rests the ‘speculation’ that it can be sold at a cost and price that generates profit. Behind the distinction between finance and the ‘productive sector’ is therefore something else: the notion that finance speculates in pieces of paper, not in providing goods or real services; it is a parasitic drain on the economy, not a constructive addition to it.

The problem with this line of thinking is that it mistakes what is rational from the perspective of certain moral criteria with what is rational within capitalism. The financial system is necessary to capitalism’s functioning. The discipline finance has imposed in the neoliberal era on particular capitalists and workers has forced an increase in U.S. productivity rates by way of increased exploitation, the more efficient use of each unit of capital, and the reallocation of capital to sectors that are most promising – all from the standpoint of profits, of course.

The penetration by American finance of foreign countries and the inflow of foreign capital into the U.S. has given the U.S. access to global savings, shored up its role as the greatest global consumer and reinforced the U.S. state’s power and options. Especially important, financial markets have come to provide non-financial corporations with mechanisms for managing their risks, and comparing and evaluating diverse investment opportunities in a highly complex global economy. Absent this role, globalization – at least to the extent we have experienced it – would not have been possible. Finally, as emphasized earlier, the ‘democratization’ of American finance has given workers access to finance as savers and debtors, thereby contributing to their integration into, and dependence on, each of capitalism and finance.

This does not mean that the explosion of finance is not a highly contradictory process. Highly volatile financial markets inevitably generate financial crises. Rather, it shifts the question from whether financialization is irrational to whether its contradictions can be managed insofar as the crises can be contained. What working classes do in this context will be crucial to answering this question.

The Dialectics of Regulation

Finance cannot exist without regulation and the U.S. financial sector, even before the latest crisis, was the most heavily regulated of any section of the U.S. economy. In fact, the dynamics of finance cannot be understood apart from how regulation shapes financial competition, how banks and other financial institutions try to escape or reshape that regulation, and the state’s subsequent counter-responses. The current dilemma for American regulatory institutions lies in how to re-regulate finance so as to overcome its costly and dangerous volatility without undermining finance’s needed innovative capacity.

We need to be clear that this is about re-engineering finance to strengthen capital accumulation, not control it in the name of a larger public interest. To place democratic regulation of finance on the agenda would require asking: ‘regulation for what purpose?’ and so would mean going far beyond finance itself. It would mean raising the fundamental question of social control over investment and therefore get to the heart of power in a capitalist society.

In the context of the failed promises of the past quarter century and the current crisis, to see the above issue go completely unmentioned in the Democratic primary debate may not be surprising given the absence of even a trade union campaign around this, but it bespeaks an impoverishment of American politics that in fact goes all the way back to the New Deal. The issue of economic democracy that had been placed on the political agenda alongside the New Deal’s public infrastructure projects was set aside for the remainder of the century after the FDR administration’s self-described ‘grand truce with capital’ in the late 1930s.

It will, therefore, not do to resort to the abstractions and obfuscations of calling for ‘re-regulation’ or a ‘new, new deal.’ It is the undemocratic power of private control over investment that needs to be put on the agenda.

American Empire in Crisis

Four particular aspects of the limited fall-out from the present crisis demand more serious reflection on the left. First, the fact that this crisis surfaced in the context of strong profits and low debt loads in the non-financial sector is important, and this accounts for the limited damage thus far.

Second, it is notable that despite the IMF calling this the most serious banking crisis since the Great Depression, we have not seen a series of banks failures. This is certainly linked to the interventions of the U.S. Fed, but it also speaks to the strength of private U.S. financial institutions. In no other country could such a crisis have unfolded without massive financial bankruptcies.

Third, it is especially worthy of note that no major state saw an opportunity in the crisis to challenge or undermine the American state. Rather, their integration into global capitalism meant that they identified this crisis as their crisis as well. They effectively recognized the U.S. central bank as the world’s central bank and cooperated with it in coordinating internationally repeated provision of liquidity to the banks. As in the previous instances of financial crises during the 1980s and 1990s, this reproduced and extended the American state’s leading role in managing global capitalism.

The fourth, and most important factor is the remarkable ‘imperial flexibility’ the U.S. has by virtue of the weakness of its working class. Had, for example, U.S. workers insisted on higher wages to compensate for rising food and oil prices and the devaluation of their homes and taken advantage of the competitive space offered by a falling dollar, the Fed would have had to cope with the fear of inflation and this might have meant higher rather than lower interest rates. And that could very well have aggravated the crisis and risked a financial meltdown. But rather than the working class demanding more, it in fact showed restraint or, in the case of the autoworkers, accepted the greatest concessions the union has ever made.

The more important question is, therefore, not the economics of crisis but its politics. How will the working class respond to the crisis? If credit continues but becomes more costly; if the loss of private pensions, negotiated health care, and the devaluation of homes force people into having to reduce consumption to shore up their savings; if food and oil prices leave less discretionary spending – if this is the near-term future, will workers rebel? Or will workers once again tighten their belts to preserve what is left from their past gains? And if frustrations are expressed politically, will the politics be limited to a longing for the good-old days before the crisis or before Bush?

Absent what Alan Sears, at the recent Great Lakes Graduate Students Conference at York, called ‘an infrastructure of resistance’, any opposition that does surface is most likely to be localized and contained rather than built on. A coherent alternative is no just a set of economic policy proposals but a political movement that can develop the popular appreciation and capacities for radical democratic control over investment. There should be no illusion that a recession, or even a depression, will necessarily bring the issue of economic democracy back onto the U.S. political agenda. It would require a transformation of American politics to do so – and that, like the current economic crisis, would as well have global implications.

Sam Gindin teaches political economy at York University.
Leo Panitch teaches political economy at York University and is editor of The Socialist Register.

Courtesy: The Bullet

Fidel reflects: They will never have Cuba

I hope that no-one say that I am gratuitously attacking Bush. Surely they will understand my reasons for strongly criticizing his policies.

Robert Woodward is an American journalist and writer who became famous for the series of articles published by The Washington Post, written by him and Carl Bernstein, and which eventually led to the investigation and resignation of Nixon. He is author and co-author of ten best-sellers. With his fearsome style he manages to wrench confessions from his interviewees. In his book, State of Denial, he says that on June 18, 2003, three months after the Iraq war had begun, as he was on the way out of his White House office following an important meeting, Bush slapped Jay Garner on the back and said to him:

“Hey, Jay, you want to do Iran?”

“Sir, the boys and I talked about that and we want to hold out for Cuba. We think the rum and the cigars are a little better…The women are prettier.”

Bush laughed. “You got it. You got Cuba.”

Bush was betrayed by his subconscious. It was in his mind when he declared what scores of dark corners should be expecting to happen and Cuba occupies a special place among those dark corners.

Garner, a recently retired three-star general who had been appointed Head of the Post-War Planning Office for Iraq, created by secret National Security Presidential Directive, was considered by Bush an exceptional man to carry out his war strategy. Appointed for the post on January 20, 2003, he was replaced on May 11 of that same year at the urging of Rumsfeld. He didn’t have the nerve to explain to Bush his strong disagreements on the matter of the strategy to be pursued in Iraq. He was thinking of another one with identical purpose. In the past few weeks, thousands of marines and a number of US aircraft carriers, with their naval supporting forces, have been maneuvering in the Persian Gulf, a few miles off the Iranian territory.

It will very soon be 50 years since our people started suffering a cruel blockade; thousands of our sons and daughters have died or have been mutilated as a result of the dirty war against Cuba, the only country in the world to which an Adjustment Act has been applied inciting illegal emigration, yet another cause of death for Cuban citizens, including women and children; more than 15 years ago Cuba lost her principal markets and sources of supply for foods, energy, machinery, raw materials and long-term low-interest financing.

First the socialist bloc collapsed followed almost immediately by the USSR, dismantled piece by piece. The empire tightened and internationalized the blockade; the proteins and calories which were quite well distributed despite our deficiencies were reduced approximately by 40 percent; diseases such as optical neuritis and others appeared; the shortage of medicines, also a result of the blockade, became an everyday reality. Medicines were allowed to enter only as a charitable act, to demoralize us; these, in their turn, became a source of illegal business and black-market dealings.

Inevitably, the “special period” struck. This was the sum total of all the consequences of the aggression and it forced us to take desperate measures whose harmful effects were bolstered by the colossal media machine of the empire. Everyone was awaiting, some with sadness and others with oligarchic glee, the crumbling of the Cuban Revolution.

The access to convertible currency greatly harmed our social consciousness, to a greater or a lesser degree, due to the inequalities and ideological weaknesses it created.

Throughout its lifetime, the Revolution has taught the people, training hundreds of thousands of teachers, doctors, scientists, intellectuals, artists, computer engineers and other professionals with university and post-graduate degrees in dozens of professions. This storehouse of wealth has allowed us to reduce infant mortality to low levels, unthinkable in any Third World country, and to raise life expectancy as well as the average educational level of the population up to the ninth grade.

By offering Cuba oil under favorable terms of payment at a time when oil prices were escalating dramatically, the Venezuelan Bolivarian Revolution brought a significant relief and opened up new possibilities, since our country was already beginning to produce her own energy in ever-growing amounts.

Concerned over its interests in that country, the empire had for years been planning to destroy that Revolution, and so it attempted to do it in April 2002, as it will attempt to do again as many times as it can. This is why the Bolivarian revolutionaries are preparing to resist.

Meanwhile, Bush has intensified his plans for an occupation of Cuba, to the point of proclaiming laws and an interventionist government in order to install a direct imperial administration.

Based on the privileges granted to the United States in Bretton Woods and Nixon’s swindle when he removed the gold standard which placed a limit on the issuing of paper money, the empire bought and paid with paper tens of trillions of dollars, more than twelve digit figures. This is how it preserved an unsustainable economy. A large part of the world currency reserves are in US Treasury bonds and bills. For this reason, many would rather not have a dollar crisis like the one in 1929 that would turn those paper bills into thin air. Today, the value of one dollar in gold is at least eighteen times less than what it was in the Nixon years. The same happens with the value of the reserves in that currency.

Those paper bills have kept their low current value because fabulous amounts of increasingly expensive and modern weapons can be purchased with them; weapons that produce nothing. The United States exports more weapons than anyone else in the world. With those same paper bills, the empire has developed a most sophisticated and deadly system of weapons of mass destruction with which it sustains its world tyranny.

Such power allows it to impose the idea of transforming foods into fuels and to shatter any initiative and commitment to avoid global warming, which is visibly accelerating.

Hunger and thirst, more violent hurricanes and the surge of the sea is what Tyranians and Trojans stand to suffer as a result of imperial policies. It is only through drastic energy savings that humanity will have a respite and hopes of survival for the species; but the consumer societies of the wealthy nations are absolutely heedless of that.

Cuba will continue to develop and improve the combative capacities of her people, including our modest but active and efficient defensive weapons industry which multiplies our capacity to face the invaders no matter where they may be, and the weapons they possess. We shall continue acquiring the necessary materials and the pertinent fire power, even though the notorious Gross Domestic Product as measured by capitalism may not be growing, for their GDP includes such things as the value of privatizations, drugs, sexual services and advertising, while it excludes many others like free educational and health services for all citizens.

From one year to the next the standard of living can be improved by raising knowledge, self-esteem and the dignity of people. It will be enough to reduce wastage and the economy will grow. In spite of everything, we will keep on growing as necessary and as possible.

“Freedom costs dearly, and it is necessary to either resign ourselves to live without it or to decide to buy it for its price”, said Martí.

“Whoever attempts to conquer Cuba will only gather the dust of her soil soaked in blood, if he does not perish in the fight”, exclaimed Maceo.

We are not the first revolutionaries to think that way! And we shall not be the last!

One man may be bought, but never a people.

Fate decreed that I could survive the empire’s murderous machine. Shortly, it will be a year since I became ill and, while I hovered between life and death, I stated in the Proclamation of July 31, 2006: “I do not harbor the slightest doubt that our people and our Revolution will fight until the last drop of blood.”

Mr. Bush, don’t you doubt that either!

I assure you that you will never have Cuba!

Fidel Castro Ruz
June 17, 2007
2:03 p.m.

Bangladesh now: a showpiece of pax americana

Soumitra Bose

If things come the BUSH-BLAIR or rather EMPIRE way, we would have all over the earth what we now see in Bangladesh. The country is run now by what is eulogized as a “caretaker government”! Yes, care is what they are taking, of what, however is the question?

Political activities are banned. It is still an “ideal democracy”. No one is allowed to spell ill about the government, no one can and will criticize those handfuls that are running the show, or rather are seen as running the show. Show, however is actually run by the army, and everyone in the street knows it. There are “wise” men – a handful, who decide or decree whatever will be next step and there would not be anyone who can question.

The middle class, who has lived and thrived in Bangladesh for more than 35 years now is happy and even conceited as ever, because they feel and “see” that corruption is not there, political Mafiosi are all behind bars and yet the middle class as it is always throughout the world do not see what they do not want to! Just today, news came out that the Chief of the caretaker government is willy-nilly [as no one is allowed to directly mention even the name of the person for any allegation processing] involved in a huge financial scam. Social laws never go wrong… one has to give some time to prove them! When supreme power is bestowed on some one and the person is not answerable especially in the perspective of the most corrupt economy then obviously power would corrupt and absolute power would corrupt absolutely.

Democracy, of whatever sham form brings out the news some time down the line and makes powerful ones accountable in whatever inadequate way it can, but when democracy is shelved and withheld, it becomes the golf-lawn for political oligarchy.

Every one in the streets knew what happened in Bangladesh was a coup masterminded by US consulate. It all started like the following. The US under the aegis of their war against terrorism found out that Bangladesh housing all different hues of fundamentalists and Islamist terrorist and even some other terrorist whom the US considers dangerous. The US intelligence found additionally that the Bangladesh army is the most corrupt institution and Taliban literature and demagogy and pornography. Bangladesh army and the embedded pro-Taliban functionaries were looking up to a hypothetical situation of attacking India with the help of Pakistan and other Middle Eastern Muslim countries. Things did not turn up as they planned. Musharraf fell to US game plan and turned his guns against Taliban and fundamentalists. So the Bangladesh army functionaries who were polishing their armaments toward an imaginary India-attack lost the steam.

Meanwhile the US sprang into action. The US consulate increased the efforts of negotiating and coaxing and cajoling the political leaders, but could not get very favourable responses despite their bribing and threats. This was because of the incendiary situation created on one hand by the growing labour unrest and other political movements of the people against globalisation and the growing dismay of the people against the anti-Muslim US policies. Faced with this situation, the US slashed the final threat to Bangladesh army. They said all foreign stints for Bangladesh army personnel in peacekeeping missions abroad will be terminated if Bangladesh army does not clear the fundamentalists from within its ranks. Money became more critical factor than baseless dreams of creating Muslim Umma in South Asia. Almost overnight the army decided to take on the chaotic political turmoil. They moved straight to the capital, made the then caretaker government sign on a draft that is now the writ. This draft was written allegedly [as you would get the information from the streets] by Md. Yunus and Justice Debopriyo Bhattacharya. Yunus the Nobel Prize winner always nurtured the dream of becoming the supreme man and yet could not cope with political criticism. Bhattacharya, a Hindu fundamentalist, would champion the cause of the Hindu minority. A new government was formed whose members were nominated by the US consulate. The new government arrested the main political leaders on account of some or the other corruption and criminal charges. The way Bangladesh was running all these charges are actually true. But the ulterior motive was to stop all political activities, which they promulgated and did and every kind of manifestation or organization was banned. People found overnight the local political Mafiosi quelled and they hailed the military. The bite was realized later. The prices soared up, economy dwindled, and administration anarchy shot up and the producing forces found their voices gagged. All came very soon on the heels of the famous and heroic people’s upsurge of Phulbari and Kansat. People took up arms against the imperialist marauders and trans-nationals. TATA’s project was shelved and very interestingly and very co-incidentally those upsurges took place when across the border the other Bengal took up arms with iconic presentation of Singur and Nandigram. The South Asian intellectuals and the conscious people equated Phulbari, Kansat, Singur and Nandigram in the same line against imperialism and globalisation. This was too much. Messages need to be sent and liberalism was inadequate. US sent a message across the border within India and very concomitantly they pressurized Musharraf. When Leftists in Pakistan are jailed the ploy of “war against fundamentalism” fell flat. Peasants’ upsurge in the North West Frontier Province and Punjab in Pakistan, the Anti-SEZ movement in India, the rise of the Maoists in Nepal and the recent setbacks of the Lankan Army sent a counter message to PAX AMERICANA that people are now ready to take up arms at the drop of a hat. Bangladesh is the message of US imperialism. Phulbari, Kansat, Singur and Nandigram is the message of the people. Battle lines are drawn, the struggle will go on!. People of this vivisected sub-continent have lost all hopes on neo-liberal governance of repeated changes in form and essentially the same imperialist extraction. They are taking the path of massive militant upsurge. The future is going to be a totally unforeseen chapter of human history. What started in 1857 may spread like wild fire once again toward a second Freedom struggle.

Fidel reflects: Nobody wants to take the bull by the horns

May 22, 2007

On March 28, less than two months ago, when Bush proclaimed his diabolical idea of producing fuel from food, after a meeting with the most important U.S. automobile manufacturers, I wrote my first reflection.

The head of the empire was bragging that the United States was now the first world producer of ethanol, using corn as raw material. Hundreds of factories were being built or enlarged in the United States just for that purpose.

During those days, the industrialized and rich nations were already toying with the same idea of using all kinds of cereals and oil seeds, including sunflower and soy which are excellent sources of proteins and oils. That’s why I chose to title that reflection: “More than 3 billion people in the world are being condemned to a premature death from hunger and thirst.”

The dangers for the environment and for the human species were a topic that I had been meditating on for years. What I never imagined was the imminence of the danger. We as yet were not aware of the new scientific information about the celerity of climatic changes and their immediate consequences.

On April 3, after Bush’s visit to Brazil, I wrote my reflections about “The internationalization of genocide.”

At the same time, I warned that the deadly and sophisticated weapons that were being produced in the United States and in other countries could annihilate the life of the human species in a matter of days.

To give humanity a respite and an opportunity to science and to the dubious good sense of the decision-makers, it is not necessary to take food away from two-thirds of the inhabitants of the planet.

We have supplied information about the savings that could be made simply by replacing incandescent light bulbs with fluorescent ones, using approximate calculations. They are numbers followed by 11 and 12 zeros. The first corresponds to hundreds of billions of dollars saved in fuel each year, and the second to trillions of dollars in necessary investments to produce that electricity by merely changing light bulbs, meaning less than 10 percent of the total expenses and a considerable saving of time.

With complete clarity, we have expressed that CO2 emissions, besides other pollutant gases, have been leading us quickly towards a rapid and inexorable climatic change.

It was not easy to deal with these topics because of their dramatic and almost fatal content.

The fourth reflection was titled: “It is imperative to immediately have an energy revolution.” Proof of the waste of energy in the United States and of the inequality of its distribution in the world is that in the year 2005, there were less than 15 automobiles for each thousand people in China; there were 514 in Europe and 940 in the United States.

The last of these countries, one of the richest territories in hydrocarbons, today suffers from a large deficit of oil and gas. According to Bush, these fuels must be extracted from foods, which are needed for the more and more hungry bellies of the poor of this Earth.

On May Day 2006, I ended my speech to the people with the following words:

“If the efforts being made by Cuba today were imitated by all the other countries in the world, the following would happen:

“1st The proved and potential hydrocarbon reserves would last twice as long.

“2nd The pollution unleashed on the environment by these hydrocarbons would be halved.

“3rd The world economy would have a break, since the enormous volume of transportation means and electrical appliances should be recycled.

“4th A fifteen-year moratorium on the construction of new nuclear power plants could be declared.”

Changing light bulbs was the first thing we did in Cuba, and we have cooperated with various Caribbean nations to do the same. In Venezuela, the government has replaced 53 million incandescent light bulbs with fluorescent in more than 95% of the homes receiving electrical power. All the other measures to save energy are being resolutely carried out.

Everything I am saying has been proven.

Why is it that we just hear rumors without the leadership of industrialized countries openly committing to an energy revolution, which implies changes in concepts and hopes about growth and consumerism that have contaminated quite a few poor nations?

Could it be that there is some other way of confronting the extremely serious dangers threatening us all?

Nobody wants to take the bull by the horns.