Grangemouth and the EU/WTO

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Grangemouth and the EU/WTO

By Syzygysue

Also published here  on Politics and Parasites

The dispute at Grangemouth is the old trick of provoking industrial action – then holding the workforce to ransom by threatening their jobs unless they agree to the draconian changes in their employment packages that the bosses wanted all along.  It’s exactly what Margaret Thatcher did to the Miners, and it is what Ratcliffe, a private Hedge Fund owner, has done to his employees.

But it is not just those who were threatened with job loss, Ratcliffe was also holding the UK and Scottish governments to ransom.  70% of Scotland’s fuel is processed at Grangemouth, and represents 8% of Scotland’s manufacturing capacity or 2% of its GDP.

Isn’t about time, the politicians turned the tables and called a halt to these blackmailing tactics by private energy providers?

For example, Ed Miliband’s announcement at LP conference which identified the public anxiety and anger about energy prices, has been met by the energy providers increasing their bills by 10%, in spite of OVO reports that wholesale prices have not increased.

The energy companies’ action is nothing short of a provocative Vs-up to the public and politicians.

Cameron et al have nowhere to go because they are caught between the public anger and their ideological commitment to the corporates.  Meanwhile, Ed Miliband’s proposal to freeze prices for 20 months is criticized as not being able to prevent price hikes both before and after (as indeed, the current show of strength on the part of the energy companies is intended to demonstrate).

Too rarely reported, however, is Labour’s intention to regulate the wholesale energy market by pooling electricity prior to its being sold on to the energy companies.

But why on earth go to all that bother?

We’ve already seen the energy providers disregard for the public good; their indifference to increasing the numbers of cold-related deaths this winter, and people forced to choose between eating and heating.

How much further do the energy companies have to go, in clearly demonstrating that the UK needs to be able to control supply and energy prices on behalf of its people, the economy and the environment?

The political-bullying alone, is reason enough to curb the energy companies power by taking them into public ownership asap.

But on top of that, climate change and transforming energy provision away from fossil fuels will never be achieved through the markets.

… the project of sustainable capitalism was misconceived and doomed from the start because maximizing profit and saving the planet are inherently in conflict and cannot be systematically aligned even if, here and there, they might coincide for a moment. That’s because under capitalism, CEOs and corporate boards are not responsible to society, they’re responsible to private shareholders. CEOs can embrace environmentalism so long as this increases profits. But saving the world requires that the pursuit of profits be systematically subordinated to ecological concerns…

http://www.paecon.net/PAEReview/issue56/Smith56.pdf

Profits depend on increasing sales and prices not on reducing energy consumption and supporting cheaper renewable energy.  The first duty of a private company is to maximize the return to its shareholders.

However, taking the refinery into public ownership is not so easy given the EU/WTO legislation, negotiated and signed in secret by the EU Commission and Council of Ministers… and the UK government will be even further constrained by the US-EU FTA (Free Trade Agreement) currently being rushed through for 2014.

Once a country is locked into the GATS regime, the right of its government to regulate liberalized service sectors is diminished, paving the way for foreign transnationals to enter the domestic market. Any attempt to reverse the situation would be subject to WTO disciplines and penalties.

The same holds true for Royal Mail and the NHS.  As an unelected Corporate Tribunal, the WTO has the power to overturn UK sovereignty on employment and environmental protection legislation, and many other decisions.

Unravelling the spin: a guide to corporate rights in the EU-US trade deal

But as Michael Meacher writes:

… this disaster reveals the desperate need for a proper industrial strategy to safeguard and steadily enhance the nation’s manufacturing capacity.   This dispute reveals the appalling consequences which flow from unconditional belief in private markets and the need for a strong supportive State role as exists in all successful economies today.

So how can we take back our public services and utilities into democratic ownership?

We are never going to dismantle this free trade regime with negotiation tactics… if we want to defeat the free trade regime or an institution like the WTO we need to build a new balance of forces led by social movements.

Essentially we need to organise/support a united anti-capitalist Battle-for-Seattle-on-Thames  and reject the ever-increasing stranglehold of liberalisation, financialisation and the Washington Consensus.  After all, none of us were even told about this, let alone voted for it.  We certainly are already in the post-democratic era.

The Strategy of The Bedroom Tax

We are told that George Osborne treats politics as a game of chess:

… it is one of those three-tiered chessboards. The lower tier is tactics, the art of winning day-by-day scuffles. The middle tier is strategy, which is planning for the next election. The top tier is grand strategy.’ http://www.economist.com/blogs/blighty/2012/03/george-osbornes-budget-0

It is obviously essential that the policies and day-to-day tactics of this ‘Tory’ government be confronted but it needs to be understood that activity within each layer of the board is predicated on the intentions of the topmost…

For example, the ‘Bedroom tax’ is the strategy.  The strange rationalization… that government is trying to ‘reduce overcrowding’… is the tactic.

But the grand strategy is the age-old one of dispossessing low-income people from the high value land that they occupy… the long-term aim is social cleansing of the inner city.

The dire impacts of the ‘Bedroom tax’ on individuals are heartbreaking but the real targets are the social housing associations whose viability are threatened by the likely large scale rent arrears… and their subsequent difficulties in arranging finance:

‘The social housing sector is an intricate machine; significant manipulation of policy and funding levers without fully understanding the potential impacts, is likely to cause major disruption to the way the sector works, both in terms of its ability to support its tenants and its ability to attract investment for development of new affordable housing.‘ (1)

 

Why would the Tories want to cripple housing associations and clear the inner city? …Just think of the rents that private landlords will be able to charge for newly acquired ex-social housing in Kensington and Chelsea… and the prime locations that will become available for purchase.

But perhaps more importantly, it moves away potential ‘trouble’, creating much more easily defended areas for the wealthy (just like the heavily defended citadel in Soylent Green).  By relocating individuals and families to cheaper areas, the assault on social housing also provides the means to break up natural communities of mutual support.  Public protests and rioting are invariably urban phenomena, as we saw in the London riots.

Boris may have said that there would be ‘”no Kosovo-style social cleansing” of the city’s low income households on his watch, but he has diverted 80% (£93.3 million) from affordable housing programmes to the Mayor’s Housing Covenant, which aims to help middle income earners into homeownership.

In war, the first casualty is truth

 … and as Warren Buffett said:

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”  

References:

  1. Council of Mortgage Lenders’ Response to SSAC call for Evidence – Universal Cride/ Housing Benefit in Social Sector Part 1
  2.  Soylent Green, George Osborne and Plutonomy

The Top 10 Flaws of Neoclassical Economics

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Revisiting Economics 101 – Debt: Imperial Power and Control discusses the power of debt-based money, emboded in the bond market, and its ability to exert total top-down power and control. Learn how our system is not a free market and how neoclassical economics misses so many key points.

The top 10 flaws of Neoclassical Economics according to Damon Vrabel http://csper.org/economics-2.html

1. Money monopoly = free market

Neoclassical economics calls our current system under a private monetary monopoly a free market. Of course nothing could be further from the truth.
The monetary system is an overlay on top of the economic system. Economic systems create value through market activity, but the monetary system which overarches them, determine who captures their value.
Neoclassical economics completely ignores the monetary system, and the fact that it is controlled by an entrenched private monopoly.

2. Neoclassical Economics ignores that money comes from nothing but debt.

Economics does not address the fact that all money comes from debt. It assumes that base currency (M0, core money) is just a free-flowing medium of exchange that apparently comes from the US Treasury. It does not. It comes from the Federal Reserve backed by debt.

3. Neoclassical Economics ignores the artificial scarcity condition.

Economics ignores how a debt-based monetary system imposes scarcity on countries and populations. There is never enough money to pay back all the debt, so everyone is forced to jump on the hamster wheel, scrambling to find more money to pay back debt. This dynamic is perpetual. It never stops until the system crashes. It need not be this way.

4. Neoclassical Economics equates net worth with value creation.

Economics ignores how the financial class and others serving the upper end of the capital structure capture more money simply because they have entrenched power. They extract value. They do not create it. Economics is correct that participants in the economic system create value, but it misses the fact that the monetary system on top of the economic system determines who captures that value.

5. Neoclassical Economics assumes free, rational, economic actors by ignoring power differential of debt.

The power differential caused by the monetary system is ignored by economics. This is the only reason the system is erroneously called a “free market.” The monetary system is entirely centripetal, sucking all power to the center, or the top-tiered financiers. People are in servitude in a very controlling market, not a free market.

6. Neoclassical Economics ignores the instability of having a pure debt-based monetary system.

Economists ignore that the economic system is guaranteed to boom, bust, and eventually end – because the monetary system on top of it, is completely unstable and fundamentally flawed. It depends upon increasing debt. It cannot increase forever, and it can collapse to zero since people have no sovereign money.

7. Neoclassical Economics ignores the wealth illusion.

By not addressing the issue of debt-based money, economics fools people into believing the digits in their bank accounts equate to their wealth. But the fact is they represent a conditional liability, i.e. somebody else’s debt. This becomes obvious during deflation. The illusion is reinforced during inflationary periods.

8. Neoclassical Economics ignores perpetual exponential growth.

Unimaginably, economists ignore the most severe flaw of the monetary system that drives our economic system—it requires exponential growth. This guarantees eventual failure, but neoclassical economics conveniently assumes that problem away.

9. Neoclassical Economics ignores perpetual increasing scale.

As a result of perpetual exponential growth, institutions in the system continually get bigger and bigger. We saw this as the economic system made towns, counties, and states irrelevant through the last century, and we are now seeing it as mega banks and corporations are now making national governments irrelevant. People are now living as tiny cogs in a machine of incomprehensible scale. Everything in life has been monetized, so things that don’t generate bank credit get devalued (spirituality, psychology, rest, joy, play, etc).

10. Neoclassical Economics ignores perpetual increasing velocity.

Another problem from exponential growth is perpetually increasing velocity. The system has to chug faster and harder as it continues to grow. This means human life has to chug faster and harder. The most obvious manifestation of this is the endless, hectic commutes every morning to jobs we despise. We feel frustration, sometimes rage, toward our fellow commuters. That is just one small example of how systemic velocity affects the human spirit.