Though his pronouncements insist that Turkey’s Kemalist secularism remains undiluted, Prime Minister Recep Tayyip Erdogan can’t seem to shake off innuendos about his past and that of his party. He and the Justice and Development party (AK) he leads have Islamist roots, emerging as they did as a faction of the tellingly named Virtue Party. In the years since the AK party have employed the classic conservative manoeuvre of converging piety and nationalism.

There has been plenty of heartache in the western media at the proliferation of headscarves and the lifting of the ban on said item for members of the civil service. Far more significant, but with less ink spilt over it, has been the government’s approach to public art, one which displays all the prudishness and humourlessness one would expect from either an Islamist, a nationalist, or some toxic brew of the two.

The planned demolition of a monument near to Kars of two statues reaching out to embrace each other is a study in art criticism, AK-style. The monument is sited near to Turkey’s border with Armenia; hence the significance of the statues’ pose and also the solemn offence that Erdogan has taken on behalf of the Turkish people and the military. Though it is not officially conceded that this is the reason for getting rid of it, it can be inferred that the monument’s existence would contradict the government’s denial of the genocide of Armenians during the Great War.

The statue is apparently also guilty of blasphemy of a different sort as it is sited near to the tomb of the 10^th century (scholar) Hasan Harakani. Some Muslim scholars have declared this idolatrous. The AK Party can therefore satisfy religious sensibilities and offended national pride with one swing of a wrecking ball.

The demolition will be the symbolic consummation of Mr Erdogan’s rejection of the protocols agreed with Armenia in 2009 that sought to establish normal relations between the two countries. This is predictable; closely aligned with a preoccupation with deference to established religion in the puritan nationalist mindset is the tendency to quarrel over marginal lands; in this case the predominantly Armenian statelet of Nagorno-Karabakh.

Officially it has been conveniently argued that the Kars monument does not complement the distinctive Ottoman and Russian character of the city, the long Armenian heritage of Kars having mysteriously evaporated along with its inhabitants.

We can add priggishness to Mr Erdogan’s list of dismal cultural hang-ups. Nevzat Bozkuş, the mayor of Kars (in what must have been a dizzying rush of civic tidying ahead of a visit by the boss) removed bare-breasted nymphs from a public fountain on the grounds that they were an offence to public decency.

When faced with adversity we often find out who our real friends are. Despite being deserted by his own people, Egypt’s President Hosni Mubarak can for now put his trust in the police and the top-tier of the military. In the rest of the world he can count on his fellow autocrats from the alma mater of the Cold War and, until 31 January, could claim at least the nominal solidarity of the Socialist International, and therefore of our own Labour Party.

According to the Ethical Charter of the Socialist International, the member parties affirm their “total commitment to the values of equality, freedom, justice and solidarity which are the foundation of democratic socialism”. Fine words. Words that chime with the Labour Party’s contemporary clause 4 and to which the Party can proudly subscribe, but words not so fine as to be taken all that seriously by many of the parties signed up to it.

In the letter of expulsion addressed to the nameless ‘general secretary’ of Egypt’s National Democratic Party (NDP), the Socialist International cites concerns at “the lack of developments in relation to democracy”. Aside from the evasive and slightly euphemistic language that describes a lack of democracy as if it were a vitamin deficiency in an otherwise healthy body, this letter fails to address those areas where the NDP is also lacking.

From the start of Mubarak’s rule the NDP has stood for the democratic socialism of the truncheon and the private swimming pool. The gross disparities of wealth and the lack of opportunities in Egypt prove there has been a lack of development in relation to socialism. The cartelised state industries that have ensured the economic domination of the political elite for decades are the classic symptom of a hypocritical racket.

That it should take all this and a popular revolt to get a corrupt party ostracised, and that the fine words of a country’s official left should ever be taken on face value, is unsettling. But worse still, it helps justify old slanders against the left that accuse it of being complicit with tyranny and fundamentally undemocratic.

When the Conservative Party threw its lot in with the European Conservatives and Reformists group in the European Parliament it was rightly criticised for so easily breaking bread with the unreformed right in eastern Europe, but we should take care that the obvious double standard does not go unnoticed.

Do these affiliations mean anything, or are they merely the comforting vestiges of more optimistic days? More importantly, who in Egypt can claim the mantle of the democratic left and make something of that Ethical Charter?

This week’s major intervention in the election campaign has surely been the call by the Institute for Fiscal Studies for the major parties to ‘come clean’ about their strategies for reducing the public sector debt, if elected. The IFS report has chimed strongly with the overall public attitude in this campaign, which is that politicians are all devious and untrustworthy. The media response to the report has therefore been to pander to this attitude by unthinkingly echoing the IFS position. The Guardian asserts that the IFS is “the leading economics think-tank” in the country, clearly implying that its views must be accepted without question.

But why should the IFS be beyond criticism? Is cutting the public debt really an objective economic necessity, or is it actually a deeply political stance, reflecting the interests of the business and financial élites?

To answer this question, we have to look closely at the history of debates about the public finances over the last forty years. During that time, the theory and practice of economic policy has shifted markedly from mainstream Keynesianism of the early 1970s, to the unchallenged hegemony of free-market neoliberalism since the early 1990s. Although there have been many elements in this overall shift – notably privatisation of state enterprises, deregulation of financial markets and attacks on trade union rights – the public finances have consistently played a critical role.

There were two key campaigns in particular that have affected the UK: the first during the ‘stagflation’ crisis of the mid-1970s, and the second during the sharp recession of the early 1990s. Both were paralleled by related shifts in policy prescriptions all across the world economy.

In the mid-1970s, Britain suffered especially sharply from an unprecedented combination of high inflation and the return of mass unemployment. Attempts by successive governments to address these problems started under the 1964-70 Wilson administrations, and continued through the Heath years to the return of Labour in 1974. In the decade from 1964, restricting public spending might be necessitated when sterling was under pressure, but was not seen as the key to macroeconomic stability. Instead, the predominantly Keynesian policy mainstream favoured state initiatives in the form of incomes policies and indicative planning, aiming to reconcile the conflicting interests of employers and unions through the good offices of the state.

But by 1976 these efforts had ended apparently in abject failure, although Keynesians could argue that inflation was significantly the result of factors outside British government control – notably the breakdown of the dollar-gold link in 1971 and the oil shock of 1973. The result was the emergence of two policy platforms standing to left and right of the mainstream. On the left, Labour and the unions flirted with an Alternative Economic Strategy which centred on a radical extension of state intervention in the modernisation of British industry. On the right, the monetarists led by Milton Friedman offered an equally radical alternative diagnosis of stagflation, blaming it on the fiscal and monetary indiscipline of the government.

Following a sudden dip in Britain’s trade balance in 1976, a run on the pound forced Chancellor Healey to turn to the IMF for help. The public spending cuts that followed signalled an early victory for the monetarist right, and the end of the road for both mainstream Keynesianism and the leftist Alternative Economic Strategy.

Mrs Thatcher’s election success in 1979, followed by Reagan’s in the USA, heralded the return of pre-Keynesian economic and social conservatism.  In Britain, the fierce monetary and fiscal squeeze that ensued put manufacturing to the sword, while the abolition of exchange controls allowed the burgeoning wealth from North Sea oil to be invested largely abroad. Subsequently, while the Third World was devastated by the debt crisis of the 1980s, the UK and US financial sectors pressed forward with deregulation at home and expansion abroad, laying the basis for their joint dominance of global financial markets.

Breakneck expansion eventually led, as it always does, to unsustainable credit growth, overheated markets and a new round of inflation. When the bust came in 1990-91, coinciding with the fall of communist regimes across the Soviet bloc, the free-market right once again blamed excessive public spending. The result within the European Union was the strictures of the Maastricht Treaty, first negotiated in 1991 and finally enacted, after some resistance, in 1993. In relation to public finance, from now on all EU member states were enjoined to limit their fiscal deficits to 3% of GDP, and their aggregate public debts to 60% of GDP. Limits along similar lines had, by then, become a central feature of Third World aid packages from the International Monetary Fund and the World Bank; they were also imposed upon the post-communist ‘transition’ countries. The hegemony of neoliberalism was now complete.

What is most striking, and highly relevant to the assessment of this week’s IFS intervention, is that at no point did the monetarist economists – or their neoliberal successors – explain why any particular limit to public deficits and debt was economically necessary. Instead we are offered, then as now, an entirely circular argument. We are told that deficit cuts are necessary because international bond markets require them. So why do international bond markets require them? Because they think that cuts are necessary. And why is that? Because the economic experts say so!

Now it is certainly the case that any individual government which accumulates debts that are very high compared to those of other governments will find itself subject to special scrutiny by the bond markets, as the Greeks now know only too well, and as many Third World governments found out already back in the 1980s. We should of course make allowance for the pernicious effects of speculators, for instance the role of George Soros in our own 1992 crisis that forced us out of the EU’s Exchange Rate Mechanism, or the flight of hot money from East Asia in 1997. But a reasonable case can still be made that governments should, in normal times, avoid excessive reliance on borrowing, especially to fund current expenditure as opposed to capital investments.

However, from the standpoint of macroeconomic stability, and especially that of maintaining full or near-full employment, our overriding concern today should remain that of Keynes: the need for governments to sustain economic activity at a time when savings in the private sector greatly exceed investments. This need is met by absorbing excess savings through the sale of government securities, the proceeds of which are then spent.

And because we now live in an integrated global economy, this Keynesian precept should be applied at the global level, not at the level of an individual country. Thus, the continued growth and prosperity of countries with chronic trade surpluses, like Germany and China, depends in conditions of global recession on the willingness of other countries like the USA and Britain to continue to run trade deficits. As a corollary – and this is really an economic fact – there will be matching outflows of capital from the former countries, and inflows into the latter. Given the current reluctance of businesses and households in the trade-deficit countries to borrow and spend, it is their government borrowing that keeps the world economy going.

We can see, therefore, that the International Monetary Fund, the Bank of England, and Chancellor Darling and Shadow Chancellor Cable, are right to urge that government deficits should not be cut prematurely, because that would risk a ‘double-dip’ recession. As long as global savings continue to exceed global private sector investments, governments must continue to absorb that excess.

But still, why this obsession with restoring the deficit and debt ratios to ‘normal’ levels, once the global recovery has reached the point where private sector investment has recovered fully and cyclical unemployment has disappeared? There is, after all, no economic ‘law’ that dictates the 3% and 60% levels, or any other numerical values. The level of aggregate economic activity is entirely unaffected by the proportion of demand that flows through the public rather than the private sector.

The answer to this question, now as in the 1970s, lies not in economics, but in politics, or more specifically, in class warfare. It concerns the privileged position of private wealth within our restricted form of democracy. After 1945 the propertyless in most parts of the world, West, East and South, made remarkable gains in their well-being and in the strength of their political voice. By the mid-1970s, the propertied classes, whether capitalists, usurers, merchants or landlords, or indeed the Soviet-bloc bureaucratic élite, found themselves on the defensive on many fronts.

Many radical nationalist governments in the Third World continued to press for reforms in the governance of the world economy, challenging the new forms of economic colonialism that followed independence. In the Soviet bloc, the Prague Spring and the first stirrings of the Polish workers’ movement threatened the bureaucrats’ highly centralised power. And in the West, not only had new social movements challenged the elites on issues of gender, race and the environment, but workers were also advancing new claims to workplace democracy and economic security that seriously threatened the power of big business and high finance.

The neoliberal counter-revolution was the concerted response. For more than thirty years, the ideologists of neoliberalism, with economists to the fore, worked assiduously to construct a new common-sense about the economy based on the old liberal mantra: property rights, individualism and the residual state. By the time the sequence of localised crises that began in Britain on Black Wednesday in 1992 culminated in the global credit crunch of 2007, that work of construction was very largely complete.

Faced in September 2008 by an imminent total meltdown of global finance, the business and financial élites had no choice but to sanction a massive and collective rescue programme by the governments of the leading economies. There followed a period  during which neoliberalism appeared to be in disarray, and in both academia and the media, alternative voices could once again be heard.

But within about six months, the neoliberals had regrouped. In Britain, as the debate over Darling’s 2009 Budget already showed, their ownership of the economic common sense allowed them to steadily shift the focus of debate from exacting retribution and repayment from the banks, to blaming governments for assuming the vast fiscal deficits that have kept capitalism afloat. Meanwhile. those who spoke up for real alternatives – for Green New Deals, for radical reform of the banks, for a new international financial architecture – have been pushed back to the margins of public attention. All that matters now, apparently, is to make sure that the state is cut back.

And to make absolutely sure that this happens, the IFS message comes with a chorus of attacks on the competence, work effort and dignity of public sector employees. The accompanying relentless demands for ‘efficiency gains’ have a double purpose. On the one hand, they are a euphemism for cuts in public sector jobs and pay, heralding an assault on the last redoubts of organised labour while undermining continued citizen support for nurses, teachers and soldiers alike. On the other hand, they undermine our confidence in the provision of public goods, encouraging a resumption of the shift to private sector providers initiated under Mrs Thatcher.

Given these attacks on working people and their communities, it is surely time to summon up our collective courage and reject the lies and misrepresentations that are being foisted upon us in this phoniest of all elections. For at present, it really doesn’t matter what combination of Libs, Labs and Cons cobble together a majority at Westminster. The Institute for Fiscal Studies are sadly right about one thing:  the government that emerges will impose massive cuts in public spending. But they are not, repeat not, economically necessary.

Hugo Radice is a Life Fellow of the School of Politics and International Studies, University of Leeds. His recent columns on the crisis in the Yorkshire Post are available via his webpage: http://www.polis.leeds.ac.uk/about/staff/radice

Contact the author: h.k.radice@leeds.ac.uk

The Kurdistan region of Iraq enjoyed a head start over the rest of the country. Its 1991 uprising ousted Saddam’s genocidal forces which had murdered nearly 200,000 Kurds at Halabja and elsewhere. Its leaders started to build universities and lay down democratic foundations but it also endured a bloody civil war whose divisions are now healing.

Security is tight although there have ‘only’ been about 120 terrorist killings since 2003, 100 of these in early 2004, and overseas business people and diplomats rarely take special measures. Crime is very low.

There’s also been a development boom with homes and big infrastructure projects built in recent years. Workers don’t pay tax and work six hours a day. Unions are social partners and back the call for full union rights in the rest of Iraq, where they are restricted.

Iraq has the world’s third largest oil reserves but is only the 11th biggest producer. Kurdistan has plentiful supplies. Oil and gas provide virtually all Iraq’s revenues and diversification is vital. Agriculture was born in Kurdistan but liquidated by Saddam who razed thousands of villages and herded people into cities. Kurds have lost farming skills and its young people are not accustomed to rural life. Most food is imported although Kurdistan could become self-sufficient by modernising its methods through foreign investment. Tourism is another growth area.

Kurdish leaders seek UK investment and trade and are mystified that there has been no official ministerial trade mission while other European countries are making a beeline to the region. Britain is losing business opportunities. Direct flights to the UK and a wider visa scheme would boost commerce.

Kurdistan is wrongly overlooked in case UK engagement upsets Arab Iraq. This is not, however, a zero sum game. Kurdistan is open to business which is currently less feasible elsewhere. Kurdistan could become the gateway to the whole country and companies could expand as security permits.

Kurdistan’s leaders are open to international best practice. They don’t want to reinvent every wheel and have contracted British institutions to help them tackle corruption and administrative inexperience.

Secular opposition

Their Speaker asked us to outline the British political system and more than half their 111 MPs enthusiastically participated in two lively sessions. They were keen to understand our Official Opposition system. They now have one – Gorran (the Change). This breakaway from the Patriotic Union of Kurdistan (PUK) took 25% of the seats in last year’s elections. The split is very bitter and Gorran has yet to find its feet. The emergence of a secular opposition is an important example for the Middle East.

Iraq has become a cold house for Christians but many have fled to Kurdistan and senior Christian leaders praised the government for building churches and protecting Christian villages.

Discussion in landlocked Kurdistan always turns to the neighbours. The good news is that frosty relations with Turkey have thawed massively in the last year, partly driven by extensive trading. However, Turkey and Iran are manipulating water supplies and one leading politician told us directly that Iran is not a neighbour but controls Shia Iraq.

The bad news is that relations between Iraqi Kurds and some Arabs have worsened considerably. This dangerous gap involves cultural and ethnic differences, resentment and fear and has come close to a shooting war. The Kurds suffered genocide directed from Baghdad but now embrace a federal and democratic Iraq. An independent Kurdistan including parts of Turkey, Iran and Syria is a popular dream but would almost certainly cause conflagration and is not on the agenda.

Kurds fear that Baghdad is building a centralised rather than federal state and it constantly delays implementing agreed constitutional provisions to solve problems. These include making Kirkuk and other disputed territories part of the Region, and establishing a reliable regime for oil production and sharing revenues.

Neutral statistics should underpin political representation and planning but they are not available in Kurdistan because the last census was in 1957. The Prime Minister, a Labour supporter-in-exile, Cardiff Barham Salih, told us they need UK technical assistance.

Improving Kurdish-Arab relations depends on the Iraqi parliamentary elections in March which could bring a new Iraqi PM with Kurdish support and reshaped cross-community alliances.

Iraqi Kurdistan has come a long way quickly but governance and human rights need improving. Its leaders and people most clearly desire deeper and wider political and commercial engagement by the UK, and others. It is in everyone’s interests that Kurdistan achieves its full potential within and for Iraq. The whole country would then stand a much better chance of working for its long-suffering people.

–

Gary Kent’s sixth fact-finding visit to Iraq, his fourth to Kurdistan since 2006, was with Meg Munn MP for the All-Party Parliamentary Group on Kurdistan. They were guests of the Kurdistan parliament. In five days they met the President, Speaker, Prime Minister, Interior Minister, other ministers, unions, women activists, Gorran, Christian leaders, plus British and Kurdish business leaders.

Labour Friends of Iraq

The USA can’t commit to meaningful cuts in carbon emissions; China and other developing countries refuse to budge before industrialised countries have addressed their historic legacy of pollution; the small island, least developed and African nations insist on the need to do something to avert threats to their existence; and the Europeans make positive but ineffectual noises from the sidelines. Wonderful Copenhagen in 2009? Yes, but you could almost be talking about any climate negotiation from the past twenty years – Marrakech, The Hague, Bali, Kyoto or Rio.

The depressing fact is that ever since the first climate change agreement – the UN Framework Convention on Climate Change (UNFCCC) – back in Rio in 1992, the main contours of international climate politics have remained stubbornly in place. Back then, US President George Bush Senior established the family tradition by declaring that the USA would not commit to cuts in CO₂ emissions and that America’s way of life was not up for negotiation. Back then, China, Brazil and other leading developing countries argued that principles of justice meant that industrialised countries had to cut their emissions before anything was asked of developing nations.

Today, the same standoff between principles of justice, the realities of self-interest and the ticking clock of environmental damage, remains. Now, as in 1992, the result was an agreement with no legally enforceable limits on emissions, roundly condemned by all and sundry.

True, the UNFCCC eventually give birth to its deformed, half-dead offspring, the Kyoto Protocol which did contain binding commitments from some countries. As is well known, the USA signed but never ratified that treaty and the large developing countries signed only because they had to make no cuts at all. It thus left the two largest global polluters (the USA and China) outside its remit. Even its most ardent supporters, the northern European states, have shown an inability to reach even their modest targets and the Kyoto treaty contains no effective mechanism with which to punish those who fail their obligations.

So what of the fiasco that was Copenhagen? In recent years, important shifts have occurred in climate politics, which raised hopes that Copenhagen might have delivered some kind of step forward. The science around climate change is much more well established, despite the spoiling noises of the oil industry and their media mouthpieces like Fox News and the dreadful dailies, Telegraph and Mail. And there is more widespread political agreement that something should be done.

However, despite these shifts, the pace of political change, particularly in China and the USA, is slow, leaving the two unmoving objects of climate politics – US Congressional opposition and China’s veto power – in place. Without significant change here, progress at the international level will be very difficult.

The USA

It is true that climate politics in the US have changed a great deal since Bush Junior’s much-criticised exit from the Kyoto Protocol in 2001. The USA finally has a president who takes the issue seriously and has brought the country actively back to the centre of international negotiations.

Nevertheless, within the US political system, the President’s freedom to act on the international stage is highly constrained by the need for Congressional approval, something environmental critics and other countries seemingly fail to register. George Monbiot even managed to note the critical importance of the US Senate then simply wished it away, singling out President Obama as the person to blame for the failure in Copenhagen. Such critics speak as if the President could freely choose to sign up to whatever he wanted. He cannot. More accurately, whatever the US President agrees to has to be ratified by Congress, something that has not escaped past US Presidents, from Wilson to Clinton.

While the politics within Congress, including the Senate, have changed, and there are now serious discussions around a US climate change bill, there is still considerable opposition. Perhaps more crucially, even those in Congress who favour binding emission reductions baulk at the prospect of the US agreeing to them without China and other large developing countries committing to some action as well. This was the crux of the Copenhagen impasse.

China

Like the USA, China has belatedly begun to recognise that it has some interest in having cuts to carbon emissions, partly for reasons of energy security, partly because of the likely effect of climate change on its agricultural sector and coastal cities. However, this is tempered by the view that action against climate change, in the medium term, should be the sole responsibility of industrialised countries. There is some justice to this argument: climate change has largely been created by rich countries and in terms of per capita emissions they still dwarf China’s.

But there is also a heavy dose of self-interest in China’s objections. If oil is part of the architecture of the US economy, for China it is coal. No less than the US, China’s current stance is formed with its eyes on economic growth and nurturing its global power. There are many countries that pollute much less, and will suffer much more, than China, and are ill-served by its obstructionism.

On top of this, China’s opposition to any meaningful verification measures, without which no international treaty has ever been successful, served both to meet its aim of avoiding any verifiable binding commitments at all and to protect the regime against the ‘intrusion’ of independent scrutiny of its internal affairs, something the Communist Party has never accepted.

Together, these concerns put China in the extraordinary position, in the final hours of Copenhagen, of insisting that any significant targets on limiting temperature increases or emissions be removed from the final declaration. As reported by Mark Lynas not only did China not want to sign up to commitments for itself, it didn’t want other countries to make any commitments either, for fear it would lead to increased pressure down the line on China to adopt binding targets. If this remains part of China’s strategy, it is difficult to see any possibility of progress beyond a series of broad, voluntary, individual and unverifiable promises.

While criticism of the politics around climate change in the US is entirely apt, China’s stance is extremely risky. As well as using up scarce borrowed time, environmentally speaking, it may also squander an opportunity to make limited but real progress. In a dangerous game of chicken, China seems to calculate that if it continues to play hardball, the US will eventually give in.

But current political circumstances in the USA might be as good as they will get for some time: there is a President in favour of an international agreement on climate change and the Democrats control both houses of Congress. This will not last. In all likelihood the Democrat grip will be severely weakened by the Congressional mid-term elections later this year and a second Obama term is far from certain. Whatever the issues of justice, the developing countries may have missed an opportunity to strike a limited, pragmatic deal with the US in Copenhagen.

Lessons

For their part, the Labour government strove to make Copenhagen a success, and Ed Miliband is credited (though some wouldn’t use that word) with ensuring the final declaration was in fact agreed. Gordon Brown, too, has been forceful in arguing for large financial transfers to the less developed countries, though as ever, some argue more could and should be done. The weakness of the government’s position, and that of the EU more generally, is that their domestic performance on cutting emissions is so poor, particularly when placed against some of the grander statements that both the UK government and the EU have made. It will take more than gimmicky boiler scrappage schemes to convince other nations that the UK is serious about achieving the huge cuts in emissions that it says it wants to see.

Another lesson to take from Copenhagen is that it is high time for western NGOs and other commentators to recognise that their traditional understanding of international politics (in short and with little simplification, ‘industrialised and western = venal and bad; developing and rural = noble and good’) will no longer wash, if ever it did. The very grouping together of developing countries – in this of all issues – looks increasingly anachronistic, though it serves political purposes for various governments (allying with China provides leverage for the weakest states, siding with the least developed provides ideological and moral cover for China’s intransigence). Whether this alliance will prove tenable in the long term, remains to be seen. It is hard to see how China’s refusal to cut emissions can really benefit those who will be hit first and hardest by climate change.

But perhaps the key lesson, and what is weakest in the NGO-environmentalist criticism, is any attempt to reconcile the gulf between arguments of justice and the realities of international politics. It is no good acting as if the latter simply did not exist. Certainly, it is important that arguments about justice – whether couched in terms of historical responsibilities, or in terms of per capita CO₂ emissions – are made and reiterated. But an international emissions regime in which there is an even distribution of CO₂ emissions per head is simply not attainable in the near future. It is politically, not to mention physically, unachievable in the short term and possibly never this side of a technological revolution. Moreover, because of their volume, climate change cannot be curtailed without cuts in China’s rate of emissions, regardless of issues of justice. Nor is the international political landscape – multiple states acting in their own self-interest – likely to alter anytime soon.

As ever with progressive politics, what is needed, and what is most difficult to achieve, are steps that deliver tangible progress but which also begin an inevitably slow process of bridging the gulf between present day realities and environmentally effective and socially just outcomes. Some elements of this are beginning to feature in the negotiations – large transfers of financial resources to assist the poorest countries adapt to climate change are an essential first step, regardless of any other actions. An agreed goal for mitigating climate change – whether 2^oC or 1.5^oC – signifies some progress from 20 years ago, when a vague goal of avoiding ‘dangerous’ climate change is all countries would commit to.

Beyond this, further progress will probably require a division within the developing country block, and the larger, heavily polluting countries will have to give some ground while protecting the interests of the least developed and most vulnerable. In this context, developing countries’ insistence at Copenhagen on keeping the Kyoto deal in play, looks like a major mistake.

But the really serious work will involve looking for some limited common ground between China and the US. While something may be achievable through better handling of international negotiations than was displayed in Copenhagen, the real battles will be fought in the internal political environments of these two powers, as well as others. When states’ national interests are as deadlocked as they currently seem to be – when there is only limited agreement about ends, never mind means – then international cooperation will be similarly limited. It may take much more sustained campaigning on climate change, as well as wider economic and technological change, to change governments’ views of what is in their national interest.

It’s now over a year since the world’s financial system went into meltdown in the wake of the collapse of Lehman Brothers in September 2008. At the time, there was much talk of a transformation of the financial system, of a revolution in state regulation of private finance, the end of neoliberalism, even a transformation of politics. Yet, as the crisis passes and the world economy starts to make its way up the long slope from recession, these bolder claims have been pushed to one side.

Instead, the political consensus among governments of the leading economies focuses on much more modest ideas: a tweak to the regulatory architecture here, a word or two against bank bonuses there, a broad but toothless declaration in favour of international stability over there. And, shamefully, the weasel words of the private financial sector, briefly silenced in shock at the scale of the crisis, now re-emerge warning against any actions that might restrict competitiveness, of the need handsomely to reward ‘world class talent’, of the need to be vigilant against burdensome regulation. The job of dealing with their past failings meanwhile falls to ordinary tax payers, public service users and the newly unemployed.

In the UK, with a Tory government waiting menacingly around the corner, the debate is all about the burdens of the public sector, the need to cut government expenditure and the failings of the political class. And in the USA, the shell-shocked political right, which looked down, if not quite out, after twin blows from the collapse of the American economic model and the Democratic triumph of November 2008, has now regained its feet and rails against the expansion of ‘big government’.

It is in this context that it is worth reflecting on what we have been through, the underlying dynamics of our financial system that lie at the heart of the crisis and the political challenges we are left with.

Financial crises old and new

Although, quite rightly, the recent financial crisis dominates our thoughts, it should be remembered that financial crises of one kind or another are recurrent features of the economic landscape. Since World War Two the dominant view has been that the problems underlying the 1930s bank crisis and Depression have been addressed, and that governments and central banks know how to avoid them.

Yet we’ve had a succession of crises over the last 20 years, including the stock market crash of 1987 and recession of the early 1990s; a prolonged economic slow-down in Japan, from the early 1990s onwards; a financial crisis in Mexico in 1995, and then in Argentina; the Asian crisis of 1997, spreading from Thailand to Malaysia, South Korea and Indonesia; a crisis in Russia in 1998; and, in 2001-2, another crisis in Argentina. In addition, we have seen recessions in the US and other leading countries in 1981-2 and 1990-2; the debt crisis in Latin America in the 1980s; and more recently the dot com bubble and burst at the turn of the century followed by another recession in the US in 2001.

Indeed, you could hardly say that financial stability has been a hallmark of recent economic history. And, as Barry Winter rightly points out in his article ‘Lies, Hubris and Neoliberalism‘, at every juncture before a financial crisis we have had displays of unguarded hubris – pronouncements on the underlying strength of the economy and assurances that market fundamentals are sound – not least, Gordon Brown’s too-often repeated claim that new Labour had abolished boom and bust.

Two views of financial markets

As the economist George Cooper argues in his excellent short book The Origin of Financial Crises, mainstream economics contains, broadly, two contrasting views about how financial markets work. Here, I am primarily referring to asset markets (stocks, shares, property, etc) and debt markets, and the relationship between them, albeit in very simplified terms.

First, we have to remember that in any sophisticated economy, and certainly any modern industrial economy, credit plays a crucial and central role in enabling a much higher level of economic activity than would be possible if people and businesses only spent and invested what they already owned. An economy without credit would provide a much lower standard of living than one with credit, but this also implies that an economy with a credit industry needs to be regulated in some way.

Traditionally, what banks are prepared to lend to individuals and firms is based on the collateral (assets) that the borrower owns and the borrower’s likely return on investments – less collateral and higher risk mean higher interest rates, and vice versa.

Recent problems centre around this process because it means lenders must estimate the value of assets held by borrowers, and the prospects for investments or purchases, which in turn are also based on expectations about asset prices in the future. This is particularly clear in the case of mortgages, which we’ll come back to.

The first view of this process, the dominant one in economics, policy making and banking for many years, is that asset prices – the prices of stocks, shares, property, etc – are a true reflection of their value; that is, that asset markets are ‘efficient’ mechanisms. If the stock market is going up, that is because businesses are worth more, will be generating more income for shareholders, and thus are a reflection of the underlying strength of the economy.

On this view stock and share prices, property prices and company balance sheets will all be taken by banks and other financial institutions as sound evidence that lending can be increased. Generalised across the economy, it supports the view that expanding levels of debt – held by businesses and individuals – are ok, if asset prices are going up, because they are taken as an indication of the underlying strength of the economy.

However, the alternative view, one held by Keynes and the economist Hyman Minsky (who I’ll come back to), among others, is that asset markets are not efficient, that they operate in a quite different way to markets in goods and services, and in particular that they generate self-reinforcing but alternating cycles of growth and contraction.

On this view, in the boom phase, an increase in asset prices leads to increased lending, which stimulates the asset market, which in turn justifies increased lending, and so on. However, in this kind of self-reinforcing cycle, asset price increases are not simply a reflection of the state of the economy. They are themselves inflated by increases in credit and as such become a cause of economic growth, generating a false picture of overall health in the economy and of the credit-worthiness of borrowers.

What inevitably happens is that a self-reinforcing boom becomes a self-reinforcing crisis. The economy ‘flips’ (the trigger varies in different crises), confidence in borrowers decreases leading to a contraction of lending, forcing sales of assets to pay off inflated loans, leading to a further decrease in asset prices, leading to further loss of confidence … and so on.

Minsky moments

Named after Hyman Minsky, a post-Keynesian American economist, Minsky moments are not an economist’s version of Perry Como, but the points at which economies turn from boom to bust. Minsky was relatively neglected by policy makers and bankers during the years of neoliberal dominance, as indeed was Keynes’ view about the inherent instability of financial markets. Yet, back in 1974 Minsky noted:

‘A fundamental characteristic of our economy, is that the financial system swings between robustness and fragility and these swings are an integral part of the process that generates business cycles.’

It follows from this is that financial crises – even in the view of these fairly conventional economists – are not driven by individual misbehaviour, greed, exuberance, or the absence of enough women on the trading floors. Instead, they are, in George Cooper’s words, ‘hard wired into the system’. (It’s not that the behaviour of traders is unimportant just, in his view, that the problem is more fundamental than that.) ‘Let’s be honest,’ Cooper wrote, ‘a static stable equilibrium has never been observed anywhere in financial markets.’

Hype springs eternal

The other important thing to note is that most policy makers, central bankers, politicians and financiers have not held this latter view of inherent financial instability – which carries with it a necessity for financial authorities to closely monitor and control the expansion and contraction of credit. They have instead held the view that asset and debt markets are efficient and tending towards equilibrium.

It is only because of this that we can understand how, shortly before every single financial crisis, we hear those hubristic declarations of economic health. Thus, before the dot com bubble of the late 1990s turned to bust we were told that the boom was a sign of a fundamentally new kind of economy based on perpetual growth. Similarly, in 2005-07 we were told that houses weren’t over priced, and that record levels in stock market prices were a reflection of sound fundamentals (and sound management) of the economy. And, in August 2007, we were told by the US Treasury Secretary that problems in the housing market had ‘largely been contained’.

Even as late as summer 2008, Bill Emmot, former editor of The Economist, wrote in The Guardian that this wasn’t a crisis, ‘it’s just a kerfuffle’. As Nobel Prize-winning economist Paul Krugman noted dryly, in credit-fuelled booms, ‘hype springs eternal’.

The unfolding crisis

So how did the crisis unfold? As we know its roots lie in the sub-prime mortgage market in the US.

In the late 1990s, the US and other leading economies experienced a boom and then a crash in investment in internet-based businesses, the so-called ‘dot com bubble’. In response to the downturn which followed the dot com bust in 2000, and to limit the economic shockwaves from the 11 September 2001 attacks on New York, the US central bank, the Federal Reserve, aggressively cut interest rates to pull the US economy out of recession. On the face of it this seemed to work, as growth in the US economy quickly resumed.

However, the policy pursued by Federal Reserve chairman Alan Greenspan allowed large increases in the level of credit, most notably in the US housing market, and the dot com bust was followed by a housing boom. The end of the housing boom, from 2007 onwards, had a devastating impact – a world-wide ‘credit crunch’, a financial crisis which threatened the existence of some of the world’s biggest banks, and a deep recession. The reasons for this lie in the particular way banks handled lending.

Banks and other lending institutions had been lending increasing amounts to homebuyers, stimulating demand for houses and pushing up prices, leading to further lending – precisely the kind of asset boom described above. Low interest rates meant this lending spread from relatively lower-risk customers to ‘sub-prime’ borrowers, mainly people on lower incomes, many of whom were offered short-term, cut-price interest rates on mortgages as an incentive to sign up.

For banks and other lenders, such mortgages were inherently risky but this risk was mitigated by low interest rates and what seemed to be sustained economic growth. In addition, they protected themselves against this risk by selling mortgages on to other investors (banks, investment institutions, and so on). This process of ‘securitising’ loans, selling loans to other players in the financial sector, ensured that the risky loans were spread throughout the financial system.

In the face of increasing signs of inflation in the US, and concerns that some sectors such as housing were overheating, the Federal Reserve began to increase interest rates, from one per cent in 2004 to more than five per cent in 2006. This affected borrowers in many sectors but particularly those with sub-prime mortgages who saw their monthly payments rise rapidly. Many were forced to default, and because ownership of the loans was now spread so widely, the effects of mortgage defaults were felt by institutions that were, on the face of it, far removed from the US housing market.

Furthermore, because of the complexity of the financial instruments that had been created, no one was clear how much ‘bad debt’ was in the system as a whole and how much was held by each bank. Banks had to make provision to cover their own bad debts and were increasingly reluctant to lend to other banks because they weren’t sure how exposed they were. As a result credit rapidly dried up.

First effects

The first effects of the crisis began to show in summer 2007 when New Century Financial, one of the main sub-prime lenders in the USA, went bankrupt. The first effects outside the US showed when French bank ParisBas had problems. In response, central banks in Europe, USA, Canada and Japan began to pump more money into the system as banks became increasingly nervous about lending to each other.

In the UK, the run on Northern Rock in September 2007 exemplified some of the problems to come as uncertainty about the bank’s exposure to bad loans prompted savers to withdraw their money, fearful that the bank would collapse. At the same time, US banks started to reveal the extent of their exposure to bad debt – Merrill Lynch, for example, owned nearly $8bn in bad debt.

By winter 2007, the inter-bank lending rate (the interest rate at which banks lend to each other to fund their day to day transactions) reached then record levels, a particular problem in the UK economy given the UK banks’ reliance on wholesale lending markets (day to day borrowing from other banks) which grew from zero in 2001 to over £650bn in 2007. The end result for Northern Rock was nationalisation, in spring 2008, and in the USA the investment bank Bear Sterns was absorbed by JP Morgan Chase in a deal brokered by the Federal Reserve.

Despite these signs of restructuring, the underlying problems of the mortgage market remained. In summer 2008, UK house prices fell for the first time in 12 years and the US government was forced to bail out two of its biggest mortgage lenders, Fannie Mae and Freddie Mac, who together owned up to $5 trillion in home loans. In September 2008, amid increasing turmoil, Merrill Lynch was taken over by Bank of America and AIG Insurance was kept afloat by a rescue package from the US Federal Reserve.

However, that was also the month the US government declared it would not step in to save the investment bank Lehman Brothers which was forced to file for bankruptcy on September 15th  – the biggest casualty of the credit crunch so far. Shortly afterwards, the US government’s US$700bn package to rescue the financial system – its largest intervention in the markets since the 1930s – was held up by Congress, causing worldwide panic. The crisis spread rapidly to Europe, with a collapse in Iceland’s banking system and desperate efforts to shore up banks in other countries, including the UK, Germany and Ireland.

Throughout autumn 2008 we saw a succession of government and central bank interventions of increasing magnitude in the USA, UK, Iceland, Ireland, Germany, and elsewhere; a partial nationalisation of some of the UK’s leading banks; and interest rates slashed in an effort to stimulate inter-bank lending. By winter 2008, the US and Eurozone officially went into recession and the UK followed in January 2009. Even China saw a sharp decline in exports and growth.

Responses and lessons

The G20 meeting in April 2009 managed to reach some agreement about stimulating the world economy, and some commitments (largely lived up to so far) not to create further problems through trade protectionism and the like. However, more far-reaching proposals for financial regulation have been harder to achieve. Ongoing challenges to the USA’s world leadership (see my article, Superpower Headaches), divisions between Europe and the US, signs of recovery and a re-activated financial lobby have all curtailed some of the more far-flung rhetoric of March-April 2009.

Yet, the underlying risk of repeated boom-bust cycles has by no means gone away. The basic economic model, especially in the UK where the City has long dominated economic policy, remains susceptible to the dynamics of instability identified by Keynes and Minsky long ago. Most of the signals from the UK government point towards a reconstruction of the existing system, with limited changes, rather than fundamental reform. Even the nationalised banks are being packaged up to resume their former role, as if nothing had gone wrong.

Chancellor Alastair Darling even stated, in one of his more extraordinary moments, that nothing was fundamentally wrong with the system, we just need ‘better people’ in the boardrooms. If anything could demonstrate the paucity of vision, acquiescence with the status quo, and absence of radical ambition at the top of the Labour Party, this is it. ‘Never let a good crisis go to waste,’ Obama’s chief of staff, Rahm Emanuel is reported to have advised. It feels uncomfortably like we already have.

This is an updated version of Will Brown’s talk at the ILP’s round table seminar, Crunch Times: Politics and the Crisis. To read a report of that event and link to other contributions click here.
To read other articles on the economic crisis, click here.

The vitriolic healthcare debate in the US and ongoing economic problems may dominate President Obama’s current agenda but the first nine months of this administration have also put into sharp focus an exceptionally difficult range of US foreign policy problems.

The inauguration of Barack Obama signalled for many in America and around the world a sharp break with the Bush administration. For the left of centre, the Bush years seemed at times almost a caricature of the ugly American bogeyman. Yet even for more mainstream politicians among America’s traditional allies the Bush policies on Iraq, torture, climate change and human rights seemed designed to test old allegiances to the limit.

The ecstatic crowds that greeted Obama in Berlin in during the 2008 election campaign, and more recently in Prague (and to a lesser extent in Britain) in 2009, signalled a hope at least that America could once again be if not an out and out multilateralist, then at least a more benign hegemon.

Declaring ‘America is ready to lead once more’ Obama’s inauguration, like his election, was recognition that the country’s position in the international system was in question like never before in recent history. A series of policies, whether enacted or signalled, were designed to chart a different path from his predecessor.

Yet a careful consideration of some of the most obvious foreign policy challenges facing America, reveals enormous limitations on Obama’s ability to reshape America’s position in the world and its relationships with other major powers.

Western Europe
Even among the countries where the USA’s international ties are the strongest, Obama has not had an easy ride. Certainly the change of direction has done much to reassure western leaders that the Bush administration’s unilateralism has passed.

However, the fact that the financial crisis was ‘made in America’ has severely weakened the USA’s ability (at least in the short term) to claim its economic model is the dominant one. Elements of regulation agreed at the G20 summit in April, and the creation of additional international credit through the IMF’s Special Drawing Rights, both signal an attempt by some in western Europe to push for changes in capitalist regulation at America’s moment of weakness. Divisions within the G20 over the extent and methods of financial regulation may continue to be a source of tension.

This is not limited to the economic sphere. The unwillingness of NATO allies to commit more troops to Afghanistan continues to frustrate US attempts to make progress on that front. Disagreements about the use of force outside of NATO’s area of operations have been a persistent source of tensions and the Obama Presidency won’t resolve these easily.

Iraq
Obama’s timetable for withdrawal from Iraq modestly reinforces a policy direction already adopted, if very reluctantly, in the later Bush years. Yet even with the best of intentions, a pull-out is conditional on some level of political stability in the country and that may well become more difficult the closer to the end game we get. Recent increases in violence indicate that the Iraqi terrorists and the Al-Qaeda threat may still pose severe problems.

The Afghan-Pakistan problem
US policy has increasingly  come to a belated recognition of the intertwined nature of the problems that surround US attempts to secure political stability in, and ultimately some kind of exit from Afghanistan.

If routing the Taliban in retaliation for the 9/11 attacks was initially successful, the subsequent operations have been anything but. The re-established ‘warlord’ economies based around poppy production and rampant corruption in government have only partially been offset by the creation of a nascent Afghan army. Extensive election fraud, low turnout and mounting casualties all pose increasingly difficult questions about what an acceptable solution in Afghanistan might be.

Yet the unwillingness or inability to commit more ground troops (particularly by NATO allies and in no small part because of Iraq) and the lack of development, have been compounded by gathering instability across the border. Not only has Pakistan become a source of support for the Taliban in Afghanistan, but the Taliban is also posing a growing threat to Pakistan’s fragile government. The threat of an ‘Iran-style’ revolution is now firmly on the American policy agenda and the potential for Pakistan’s nuclear arsenal to fall into Islamist hands is far from an idle worry.

Iran, Russia and proliferation
An increasingly hostile relationship developed with both Iran and Russia during the second Bush term. Obama’s early policy indicates an attempt to repair relations with Russia in an effort to strengthen the USA’s hand in dealing with Iran.

The basic objection to Iran’s nuclear ambitions have remained in place and are likely to do so – the prospect of an nuclear armed state on the Persian Gulf oil supply lines, and within striking distance of Israel, is the stuff of US strategic nightmares. Tougher UN Security Council action against Iran has long been hampered by Russian and Chinese objections.

Conciliatory moves towards Russia (questions over the future of the controversial eastern Europe missile defence shield, renewal of strategic arms limitation talks) are intended to entice greater co-operation. The prospect of more direct negotiations with Iran also are an attempt to open the door to a non-military solution.

However, ‘tough-minded diplomacy’ – claimed to be the touchstone of the new administration – requires others to be diplomatic in return. The tough stance by the Iranian regime after testing domestic opposition doesn’t bode well. The sense of US weakness on this issue, and the very real obstacles in the way of military action against Iran, limit America’s diplomatic hand as well. As if to reinforce the point, on the very day Obama held aloft the goal of a nuclear-free world, North Korea tested the latest version of its missile technology and ramped up its nuclear testing programme.

Such signs of US weakness may be a welcome change from the early Bush years even if, at the time of the Iraq invasion, many on the left as well as the neocon right severely over-estimated the extent of the USA’s ability to alter the world in its own interests (as opposed to its ability just to do harm). But a world shaped by the interests of current Russian or Chinese governments, much less an Iranian one, will be hardly more palatable than one bestrode by an American colossus.

It is ironic that just when the US gets a president seemingly intent on fashioning more progressive international outcomes, America is less able to achieve them.

In March 2003, as the war began in Iraq, I found myself sitting in the middle of a road in Cardiff alongside hundreds of anti-war protestors. I was one of what the media had dubbed ‘protest virgins’: ordinary, politically non-aligned people who had been galvanised by the impending war into joining a protest march for the first time in their lives.

Like most of the protest virgins, I didn’t stay with the Stop the War Coalition for long. The bulk of them turned up in London on 15 February, spent a jolly day marching from the Victoria Embankment to Hyde Park, watched Ms Dynamite and then went home to gossip over a latte about what a thrilling experience it had been and how they even got to carry a placard.

Personally, I stayed rather longer. I continued to join protests and help organise local STWC events until about three weeks into the war. By this time the US forces were about to take Baghdad. It was also becoming increasingly obvious to me that whatever remained of the Stop the War Coalition, post-invasion, would be ugly, ineffectual and dominated by extremism and idiocy.

Two years on, and with the benefit of hindsight, my time with the Stop the War Coalition has been a rather depressing experience. Not just because the biggest protest movement in British history failed utterly to have the slightest influence on government policy, but also because of what it illustrated about the state of the British left. At its peak, the STWC represented a broad swathe of centre-left opinion, but its direction was all-too-easily steered, not by those people who represent the best of the left, but its worst. Clapped-out Stalinists, dimwit Trotskyists, armchair Che Guevaras, clueless ultra-left hacks – these constitute the sorry shower who have become the noisiest voices on the left over Iraq.

The Socialist Workers Party are not the only ones to blame for this, but through their manoeuvring in order to dominate the STWC agenda, they have to shoulder more blame than most.

Of those protest virgins who tried to continue working with the STWC, there often seems to have been some sort of pivotal see-saw moment when the desire to register one’s protest at the war became overtaken by the sheer levels of blithering stupidity on display at STWC events. For an acquaintance of mine, that moment was when American flags began to be burned on protest marches. For me, it was the ‘Victory to the Resistance’ placards printed by the SWP a couple of weeks into the war. Declaring your opposition to an ill-conceived, potentially disastrous foreign policy adventure is one thing; being a cheerleader for Saddam’s Fedayeen thugs is quite another. It wasn’t a coincidence that around this time I stopped turning up to STWC meetings and started ‘forgetting’ to return the voicemail messages of STWC activists.

Shocking

Once the invasion was over and the occupation began, one would have expected that the priority of a decent left would have been to begin building solidarity with democratic and progressive forces in Iraq. The anti-war movement’s failure to do so is shocking. At times they’ve not only ignored Iraqi leftists and democrats, they’ve actively hindered them. The Iraqi Communist Party opposed the war, but once it was over joined the Iraqi Governing Council. To an ordinary mortal like me, getting involved with the closest approximation to a democratic forum in post-invasion Iraq seems like a sensible and obvious move in order to try to influence events. To the ideologues of the hard left, however, this was collaboration.

Recipe for disaster

When a representative of the Iraqi Federation of Trade Unions told a Labour Party conference that an immediate withdrawal of British troops could lead to civil war and the balkanisation of Iraq, it struck me as a straight- forward statement of the bleeding obvious. Whatever one may have thought about the original war, a sudden pullout of foreign troops is a self-evident recipe for disaster; a quick and easy way to massively escalate the chaos and turn Iraq into a deeply unpleasant place where anyone who is a democrat, a socialist, a communist, a liberal, a trade unionist, a feminist or a human rights campaigner is liable to wind up receiving a bullet in the back of the head.

Despite the sheer obviousness of the IFTU representative’s words, this was, once again, collaboration. This time the charge was made in an official Stop the War Coalition statement. Chillingly, the same statement also condemned the IFTU’s ‘view that genuinely independent trade unionism in Iraq can develop under a regime of military occupation’. So trade unionists aren’t even allowed to try to represent Iraqi workers? Socialist solidarity, comrade. Even more chillingly, this was followed by a call for Iraqis to resist the occupation ‘by whatever means they find necessary’. This was only a week or so after certain Iraqis found it necessary to behead Ken Bigley. A couple of weeks later, other Iraqis found it necessary to murder the humanitarian aid worker Margaret Hassan.

The words ‘by whatever means they find necessary’ were soon expunged from the statement, followed by unconvincing denials that they had ever said it in the first place. Despite the denials, it’s always been fairly obvious whose side the STWC leadership see themselves as being on. We can find the evidence in STWC vice-president Tariq Ali’s words that, ‘The immediate tasks that face an anti-imperialist movement are support for Iraqi resistance to the Anglo-American occupation’ and that the resistance is ‘the classic initial stage of guerrilla warfare against a colonial occupation’. We can find it in George Galloway’s comparison of the Iraqi insurgency to the French resistance in World War Two, and in John Rees’ comments that ‘I don’t propose to lecture the Iraqi people on the methods they use, and neither should we.’

So, to summarise, beheading terrified hostages is more forgivable than engaging with the occupation in order to try to develop a working democracy.

Those who want the occupation to be replaced by an Islamo-fascist theocracy or a return or to Ba’athist tyranny are worthy of our support. Those who want an orderly handover to a democratic state are not. All this reminds us of George Orwell’s famous comment that, ‘One has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool.’

Thanks to the ideological agenda of the SWP and their allies, the overriding principle guiding STWC policy has become not democracy, human rights or international law, but anti-imperialism. When anti-imperialism is taken to its idiot extreme (and it all too often is) then anyone who is an opponent of western foreign policy becomes declared an ally to be supported. The trouble is, all too often this means supporting people with little or no regard for democracy, progressivism, the Geneva Convention, or even basic human decency. The Vietcong, General Galtieri, the IRA, the Soviet Union, Hamas, the Iranian ayatollahs, and now the brutal thugs of the Iraqi insurgency: all have received declarations of support from so-called ‘progressives’ who really ought to know better.

Naturally, all of this has no impact whatsoever on actual policy. The SWP are about as influential in the corridors of power as the Flat Earth Society are in geography classrooms. But the hysterical voices of the tinpot ‘anti-imperialist’ ideologues can drown out the more reasoned voices of those who want to see a decent left founded on principles of democracy and humanitarianism. The SWP are not a threat to new Labour or the Bush agenda. They are a threat to genuine left-wing dissent.

It was this sorry state of affairs that I was contemplating when I was invited to join Labour Friends of Iraq. The key idea behind LFIQ is a straightforward one: no matter whether you supported or opposed the war, the important thing now is to get behind the democrats and left-wingers in Iraq, beginning with the Iraqi trade union movement. I was sympathetic to the idea. How many times does one have to re-run the old argument about what should have been done back in March 2003? I opposed the war, and don’t apologise for that. Even so I’d rather work with someone who supported the war but wants to ensure the best possible future for the Iraqi people, than someone who’d happily see an entire nation burn just to prove Bush and Blair wrong.

There was, however, a slight snag. When the war began I’d vowed never to vote Labour again. Now I was being asked to join the Labour Party in order to support the Iraqi trade unions. I opted to go back on my word and signed up with Labour and LFIQ. If the only decent, pro-democracy alternative to the STWC was inside Labour then that was where I would go.

Courageous

So far I haven’t had cause to regret pledging my support to LFIQ. By challenging the far left’s smears and libels against courageous Iraqi trade unionists, LFIQ and others have succeeded in forcing the SWP and co to mute their hostility to those Iraqis who have the temerity not to follow the SWP party line. (I suppose an apology from the SWP might not be possible? No? I thought not.) There is a need to support Iraqi leftists operating in difficult and dangerous conditions, and LFIQ have highlighted that need where others have ignored it or tried to hinder it. It would be the ultimate irony if, after all the cries of betrayal over new Labour, a new form of dissent based on decency and democracy were to emerge from within the ranks of Labour itself.

A new, decent left needs to emerge to challenge the totalitarian pseudo-left. The voices of this decent left can be heard not just in LFIQ. They can be heard on internet blogs such as Harry’s Place, in the thoughtful analyses of writers such as Johann Hari, and in Peter Tatchell’s bloody-minded commitment to the principle of universal human rights.

For now, Labour Friends of Iraq have generated a remarkable change in my own outlook. In March 2003 I felt ashamed to have supported Labour in the past, and proud to march with the Stop the War Coalition.

In March 2005, I feel ashamed to have supported the Stop the War Coalition, but Ican now once again feel proud to be a Labour supporter.

Reprinted with permission from the LFIQ website: www.labourfriendsofiraq.org.uk

The majority of the people attending Live8, and the demonstrations surrounding the G8, wanted no more nor less than to reduce poverty. But helping poor people in other countries raises problems, particularly when the language of benevolence doesn’t explain the structural issues involved.

What emerged from the Live8 stage was a confused message: we are not about charity (although we use the language), we are about social justice (although we have no strategy to get it). There are two problems with this: the first comes from the suggestion that more aid is the answer; the second arises from the lack of political strategy.

Problems of aid

If rich people’s governments (us) give the money to poor people’s governments (them) it is not necessarily used to help the poor. If the money is channeled to charities and voluntary groups to spend on the poor, they may also take a cut, while then choosing between the multitudes of poor people who may be eligible. In this selection process the deserving poor – such as children who attend school, hardworking women farmers, and those able to work – traditionally do better than the undeserving, the ‘chronic’ poor who often can’t work and may also be excluded on grounds of physical disability, mental incapacity or disease.

This is not intended as a criticism of all non-governmental organisations and charities, far from it, since currently they are the last defence against starvation when the state and the market fail poor people. I am merely arguing that it is an unfortunate, if not tragic situation when people do not have access to food by right, but are forced to rely on an insecure or haphazard gift. This leaves those people disempowered and incapable of maintaining human dignity. In short, charity is insufficient.

Although aid keeps people alive, it leaves the recipients dependent on charity and lets their governments, and all the mandated global food providers (see below), off the hook. This may retard the development of political accountability between a government and its citizens. Whichever way you look at it, intergovernmental transfers of aid, money spent by governments on the voluntary sector for poverty reduction, and individual donations all represent a pretty problematic and inefficient way of providing a social safety net for the world’s poor. It would be better to allow poor people to provide livelihoods for themselves, or to rely on rights-based social security provided by their own democratically-elected governments.

Following Live8, much of the general public would probably agree with the slogans of the right-on, 1980s rock stars (plus Ms Dynamite): ‘from charity to social justice!’; let the ‘eight men in a room’ change ‘the system’; and, more and better aid, fair trade and debt reduction. But there are some cataclysmic contradictions of fundamental politics hidden here, not least the racialised belief that ‘we’ are helping ‘them’, which is not only a source of future racism but probably explains some of the popularity of these events to Europeans.

Putting those problems aside for a moment, however, it is important to ask what a democratic socialist has to offer this coalition assembled to help the poor now that development policy has entered the mainstream of public life?

Radical liberals and the unlabelled

If we prise apart the broad coalition brought together by the Live8 concerts and G8 protests, we find some very odd contradictions. It was made up, crudely, of radical liberals, democratic socialists, socialists of the Socialist Worker kind, anti-globalisation campaigners, anarchists ‘good and proper’, and a large number of concerned citizens with no obvious label, who I will call the ‘unlabelled’.

The largest contingent are the radical liberals, whose basic proposition is that there should be a contract between the state and the citizen. Historically, this notion was at its most radical in the decaying days of feudalism and slavery, when the workers’ ‘freedom’ to contract with the factory owner and the state was established. This legally-based contract of obligations and rights is not the same as that between a charity and a beneficiary, and by comparison is still quite radical. The ‘long road from charity to justice’ slogan therefore became the central slogan of the movement, explaining why no money was collected: ‘we don’t want your money, we want you’.

Indeed, the basis of radical liberal assistance for the poor (as with socialist assistance) does not lie in charity at all, but instead in human rights instruments at a global level. An individual might still donate, and civil society could manage and spend money on ‘good causes’, but the state would also have a duty to provide a minimum level of social justice for all.

In fact, the liberals could have been shouting, ‘uphold article 25, general comment 12 of party obligations!’ since the right to food and freedom from chronic poverty and hunger were established way back in 1948, in the Universal Declaration of Human Rights (UDHR), Article 25, and also in the International Covenant on Economic, Social and Cultural Rights (ICESCR). General comment 12 of the UDHR State Party obligations reads (and this is with reference to governments and their own citizens):

‘Whenever an individual or group is unable, for reasons beyond their control, to enjoy the right to adequate food by the means at their disposal, States have the obligation to fulfil (provide) that right directly.’

In other words, international treaty law, based in liberal notions of individually held rights, states quite clearly that governments must provide food for their people. The UDHR continues (comment 12) that when financial constraints prevent action, the State Party (that is the government) must seek international assistance, in other words, they must ask other governments and the United Nations to help.

It is fairly well known that some of the worst famines occur because governments don’t ask for assistance in time, either because they hide the problem, such as China in 1961, or because they are too proud to admit failure, such as Sudan in 1985. What is also clear, however, but difficult to reconcile with these rights instruments, is that sometimes governments either don’t want to feed people or don’t care if they die. People sometimes get in the way of the strategies for wealth creation devised by the élites who inhabit governments, such as those in Darfur, Sudan, who sat on a huge underground lake of untapped oil.

And it is here that the weaknesses of liberal human rights law are most obvious. First, it assumes that basically every government wants to be good, whereas we know that this is not necessarily the case (and the majority of the poor live under these more nefarious types of government). Secondly, there are no effective sanctions for these ‘bad apples’ since that would mean infringing the sacred cow of international legal frameworks: the sovereignty of the nation-state (except when George Bush wants to invade).

Other State Parties (governments) who have signed the ICESCR, which is just about everyone including the UK, have agreed to help other state parties in need:

‘State parties should take steps to respect the enjoyment of the right to food in other countries, to protect that right, to facilitate access to food and to provide the necessary aid when required.’

It may well be news to most readers to learn that rich country governments actually agreed back in 1948 to provide food to other countries’ citizens by right, in the event that their own governments are too weak or bankrupt to do so. Several questions arise here:

• if this is the case, why do we have appeals based on seeing ‘starving children on television’ (witness the current Niger famine)?
• and why do the current Millennium Development Goals, that the UK’s Department for International Development (DfID) promoted, only promise to half the proportion of people in poverty by 2015?

Surely this goal is not only conservative (it leaves about 800 million people just as they are), but also aims for less than the 1948 obligation. Since international law confers a right to food, why do we need musicians to make it seem such a novelty?

There are around 800 million people who are chronically poor (at daily risk of death by disease and hunger), and another one billion people who are generally poor (living on less than US$1 per day) who are the subject of development assistance (Chronic Poverty Report, 2004). Globally, there are enough resources to go round, and mountains of surplus food stack up every year. So, over and above the problems of charity and the logistics of giving help to the poor, there are a few more fundamental questions, such as:

• why do poor people still exist in the first place?
• and why has the liberal model of international obligations failed so profoundly to provide a social safety net to the world’s poor?

The knee-jerk suggestion that ‘there is not enough food’ or ‘there are too many people’ does not go far enough. The answer, I would argue, is that liberalism can only provide a limited response to the power of global capitalism. This suggests that democratic socialism has an answer to the problems of hunger where liberalism has failed, an answer that lies in ideas of solidarity and in our fundamental opposition to unregulated market capitalism. This is a very old argument.

Changing the system?

So to the other groups in Scotland. The ‘unlabelled’ are genuinely upset that famines and aid appeals keep appearing on their televisions, and that human degradation and persistent poverty still exists.

My proof for this is a recent post-G8 visit I made to the Manchester studios of the BBC where I was wired into a Radio Wales phone-in on famine in Niger. The question posed to the good people of Wales was whether they would give money to the appeal ‘so soon after Live8’ (it incorrectly suggested that Live8 provided extra resources to the needy). In response, listeners were clear that they didn’t want people to die, but said, variously, that they were on inadequate pensions, gave to charity already, were acutely poor themselves, had excess cows they could send if that would help, thought the G8 had already agreed to send money, or were fed up with appeals and starving Africans who should learn how to farm better and have fewer children.

I pointed out over the line that although Niger is one of the 14 African countries (out of 18) whose debt the G8 had agreed to write off, this would take some considerable time and require another round of ‘adjustment’ negotiations on Niger’s understanding of ‘poverty reduction’. I also pointed out that even in a normal year in some areas of Niger, up to 40 per cent of children under five die of hunger and preventable disease, and that as their public authorities are unable to feed these people (which they had patently failed to do), the people of Wales could usefully help save lives, as a short-term measure.

In fact – I was in a tub-thumping mood – I went so far as to suggest that governments, including our own, had ‘messed up’. Since they have an obligation to help (see above), and since we all pay taxes to DfID, how did they allow it to happen? This proved to be a step too far for a fellow ‘expert’ panelist, from Care International, who quickly responded that no one was to blame and that ‘development took a long time’ (sic).

In fact, after thinking about it some more, I believe I was rather tame. Quite why Niger doesn’t qualify for more timely and adequate measures to reduce its poverty and avoid hunger is beyond any moral compass I can bring to bear on the situation. Put briefly, the Niger government has jumped through every hoop the World Bank and IMF have asked it to in recent years; has made no effort to hide its food shortage problem; has not maliciously caused the situation by ethnic cleansing or civil war; has asked for assistance, just last year; and has not put any unreasonable conditions on how such assistance would be received or distributed. In short, the government of Niger and its people have done nothing that would interfere with its clear right to be viewed as a thoroughly deserving country.

Since a return to multi-party democracy in 2000, the country has produced a Poverty Strategy Paper, a Poverty Reduction Strategy Paper, an HIPC reporting document, a completion point agreement, performed against the full gamut of conditionalities on privatisation, public sector reform, anti-corruption, and technically-assisted adjustment of everything but the proverbial kitchen sink, and yet hasn’t received debt reduction, despite being the second poorest country in the world. Instead, quite simply, its urgent requests to be relieved of its bankruptcy – technically, all its export earnings are not enough to pay the interest on its debts each year – have been ignored. And now it is too late for those wizened carcasses of humanity who are, technically, children.

In Niger the World Bank is spending US$14.8 million on the ‘Financial Sector Technical Assistance Project’, and US$18.6 million on ‘Privatisation and Regulatory Reform Technical Assistance Project’ – initiatives to privatise the water and make Niger fit for western companies to invest in and exploit. Yet the combined governments which own the World Bank couldn’t find the US$15 million the government of Niger, through the UN, said it needed to feed its people earlier this year (World Bank, 2005). As of 2 August, DfID had provided US$5.25 million matched roughly by the US and EU (DfID, 2005). Too little too late, and not in the same league as the amounts spent on technical assistance to capitalism.

The long road to now

So who else was part of the Edinburgh coalition? Broadly, apart from the ranks of the upset, concerned and ‘unlabelled’, there are those who would nod sagely in response to my Radio Wales experience. Of course, the system as it stands is a conspiracy of interests against the poor, they would say. ‘What did you expect? Smash capitalism! Close the IMF and World Bank!’ They might also add some patronising comments about the ignorance of the ‘proletariat’ and their naivety to think the ‘bosses’ would do any better.

And then there’s us few democratic socialists saying, hang on a minute, isn’t a democratically-governed market economy possible? Can democratically-elected governments not insist that the market be cured of its worst abuses, so that everyone can be fed? Socialists, representing the combined structural strength of the people, have the power to insist on it.

We have come a long way with the ‘revolutionary’ socialists and the anarchists – and yet are still in the same Scottish field. Both Marx and Rousseau argued that capitalist societies are inherently incapable of delivering the ideals of liberalism for the majority of the poor, since economic competition and the realities of class production and economic life under capitalism fatally undermine the equal opportunity to participate and attain all-round wellbeing and a worthwhile existence.

In short, we are not that surprised that the Universal Declaration of Human Rights is contravened. Ideals of equal rights and citizenship, civic virtues and the common good are articles of abstracted faith eroded by the brute reality of economic competition, while the ‘umpire’ state of John Locke is, in turn, fatally bound to protect privilege against the interests of the poor because of the necessity to protect private property rights and the resultant inequalities of wealth and power. Given a choice between privatisation and poverty reduction, the companies, not the children, win every time.

Liberalism, even when radical, can do no more than uphold the illusion that human freedom, including freedom from poverty, can be secured by legal rights and obligations, whereas, in reality, these freedoms rely for their real existence on a person’s temporal and spatial position in relation to capitalism. Power shifted historically from the aristocracy to the bourgeoisie, with wage labour (or unemployment and social exclusion) the impersonal, efficient, daily context of oppression.

Once ‘political liberalism’ – the political discourse of rights, liberty, equality, representation and citizenship – is removed and abstracted from capitalism and markets, it cannot do very much to help the poor. We have all heard the liberal wish list too often, and know that it is like a poor child’s letter to Father Christmas – unlikely to be delivered. Similarly, those parents in Niger will know from experience that such things are for other people.

Of course, those who are critical of liberalism then head off on very different trajectories. The anarchists will have nothing further to do with state authority or capitalist economics, in theory at least, while the anti-globalisers want to close the World Bank and IMF since they support capitalism and are opposed to people’s rights and livelihoods. These are both problematic options for the democratic socialist: we are more pragmatic than the anarchists and understand that it is in democratising institutions that people find improved lives, not by closing them down.

But that is not to say the World Bank and IMF should not be so radically reformed that they would not be recognisable. These institutions are the best approximations we have of the kind of public regulators we need on a global level. We need democratically-regulated liquidity, that is, access to co-operatively-provided money to serve the common good of the poorest people, rather than what we have now, which is institutions acting according to the more capitalist logics derived from their status as private banks. ‘Socialise the global banks!’ could be our slogan. After all, as the governments of some rich countries formally own them, they are ‘ours’. If held accountable, they could join the ‘third sector’ and become part of the alternative economic infrastructure of the democratic market.

Making markets work for us

Live8 was only asking for the ‘eight men in one room’ to tinker with the number of crumbs the world’s poor receive – by altering their levels of debt; by slightly increasing current receipts, that is ‘aid’; by proposing better earnings, through trade; and, perhaps, by letting a few more people ‘sign on’. Taken together this is not nearly enough, although it is all good as far as it goes (leaving aside that it also encourages Europeans to feel superior to Africans).

As any individual in poverty understands, reducing debt pays off the loan sharks for a short while (the dictators and their friends in the World Bank and IMF), but it doesn’t mean you won’t need credit again if your life

doesn’t change. And while an increase in ‘benefits’, in the form of aid, means there’s a bit more to spend every week, it doesn’t affect your social exclusion or the privileges of the rich which are the proximate causes of poverty. Indeed, it is only structural change, starting with fairer trade, which can give the world’s poor a job, their dignity, and some insurance against becoming dirt poor all over again, and this is the where no progress has yet been made.

None of the measures on debt reduction, aid and fairer trade force capitalism to be democratic, or prevent it creating debt bondage for the world’s poor in the future –the Marx/Rousseau critique still stands. After all, fair trade is very similar to a competitive market and we all know that means there will be losers. To change the system we must do more than this. We stand with the radical liberals in our historical mission to make rights a reality for everyone; and with the socialists, because we know that the success of this mission relies not just on legal convention, but on structural collective power.

We are not there yet. But I do know that some governments have definitely messed up if someone in Niger has nothing to eat. I know this because of that age-old instinct we inherit from socialism, called solidarity. Socialist solidarity is what makes charity insufficient. Solidarity is not interested in the nation state as such (witness the Spanish Civil War), or necessarily in adherence with the law (which is skewed more often to capitalist interests), but insists on action to help other human beings when they are in trouble. This is what makes it so fundamental in the human condition, so evident among the ‘unlabelled ’ people, that it will rise like water through the institutions of global capitalism, insisting that they become accountable to us, the little people, insisting that they democratise.

Conclusion

Liberal law lets state élites borrow in the name of their people, use the money for themselves, and make the poor pay it back. Liberal law allows state élites to sell off their people’s assets when the IMF tells them to (if they need telling, that is) in exchange for a small payout in poor relief.

Socialist law would not hold the poor responsible for the follies of the rich merely because they share the same nationality. Our solidarity would instead inspire co-operative trade, accountable to a full environmental and human audit, and protect public finances from private profit – of course, the poor should not be required to pay back the debts of Mobuto, of Abacha, or of Apartheid. The history of savings and loans clubs, funeral societies and co-operative stamps shows that socialists would provide money in times of need, without insisting on indentured labour in return.

Let us insist on these principles of solidarity, co-operative action and political accountability as a basis for reform of global institutions, but also act on those same principles in the living now, until these two prongs of our strategy converge.

Chronic Poverty Report 2004-2005 is available from the Chronic Poverty Research Centre: www.chronicpoverty.org

Niger latest news and situation reports from Department for International Development: www.dfid.gov.uk/news/files/niger-sitrep0108.asp

Projects and Programs (in Niger) World Bank (2005) from http://web.worldbank.org/external/default/main?menuPK=382482&pagePK=141155&piPK=141124&theSitePK=382450

I have a feeling that it must have been a disappointing week for Francis Fukuyama, whose essay ‘After Neoconservatism’ (adapted from his upcoming book America at the Crossroads) was awarded seven pages in the 19 February 2006 New York Times Magazine. The anti-Danish mayhem that had been dominating the news was surpassed by the fantastic criminality and sacrilege in Samarra, and nobody seemed to have time for the best-advertised defection from the neocon ranks. This is a pity, since the essay exhibits several points of interest.

However, it must also be said that Fukuyama himself made it hard for people to concentrate on his words. There appears to be an arsenal of clichés and stock expressions located somewhere inside his word processor, so that he has only to touch the keyboard for one of them to spring abruptly onto the page. Thus, in the first paragraph, we are told that Iraq has become ‘a magnet’ for jihadists, later that democracy-promotion has been attacked both from the left and (gasp) the right, later that neocons have issues with ‘overreaching’, and soon after that ‘it is not an accident’ that many neoconservatives started out as ‘Trotskyites’.

Unironic beauty

Not everyone will appreciate the unironic beauty of those last two formulations; they will appeal most to the few who are connoisseurs of leftist sectarianism. The opening words, ‘It is no accident, comrades’, used to be the dead giveaway of a wooden Stalinist hack (who would also make use of the deliberately diminishing term Trotskyite instead of Trotskyist). And these nuances matter, because Fukuyama now tells us that the book that made him famous, The End of History and the Last Man (1992), ‘presented a kind of Marxist argument for the existence of a long-term process of social evolution, but one that terminates in liberal democracy rather than communism’.

Alas, the purity of his Marxism was soon to be corrupted by the likes of William Kristol and Robert Kagan, whose position was ‘by contrast, Leninist; they believed that history can be pushed along with the right application of power and will. Leninism was a tragedy in its Bolshevik version, and it has returned as farce when practiced by the United States.’ Pause to note, then, that even the advocate of the new foreign-policy ‘realism’ feels compelled to borrow the most overused anti-Hegelian line from Karl Marx’s 18th Brumaire.

Trostkyist parody

For all this show of knowledge about the arcana of Marxism and Straussianism, Fukuyama’s actual applications of them are surprisingly thin. It is not even a parody of the Trotskyist position to say that the lesson they drew from Stalinism was ‘the danger of good intentions carried to extremes’. Nor is it even half-true to say, of those who advocated an intervention in Iraq, that they concluded ‘that the “root cause” of terrorism lay in the Middle East’s lack of democracy, that the United States had both the wisdom and the ability to fix this problem and that democracy would come quickly and painlessly to Iraq.’

The first requirement of anyone engaging in an intellectual or academic debate is that he or she be able to give a proper account of the opposing position(s), and Fukuyama simply fails this test. The term ‘root causes’ was always employed ironically (as the term ‘political correctness’ used to be) as a weapon against those whose naive opinions about the sources of discontent were summarised in that phrase. It wasn’t that the Middle East ‘lacked democracy’ so much that one of its keystone states was dominated by an unstable and destabilising dictatorship led by a psychopath. And it wasn’t any illusion about the speed and ease of a transition so much as the conviction that any change would be an improvement. The charge that used to be leveled against the neoconservatives was that they had wanted to get rid of Saddam Hussein (pause for significant lowering of voice) even before September 11, 2001. And that ‘accusation’, as Fukuyama well knows, was essentially true and to their credit.

Three questions

The three questions that anyone developing second thoughts about the Iraq conflict must answer are these: Was the George H.W. Bush administration right to confirm Saddam Hussein in power after his eviction from Kuwait in 1991? Is it right to say that we had acquired a responsibility for Iraq, given past mistaken interventions and given the great moral question raised by the imposition of sanctions? And is it the case that another confrontation with Saddam was inevitable; those answering ‘yes’ thus being implicitly right in saying that we, not he, should choose the timing of it? Fukuyama does not even mention these considerations. Instead, by his slack use of terms like ‘magnet’, he concedes to the fanatics and beheaders the claim that they are a response to US blunders and excesses.

That’s why that week was a poor one for him to pick. Surely the huge spasm of Islamist hysteria over caricatures published in Copenhagen shows that there is no possible western insurance against doing something that will inflame jihadists? The sheer audacity and evil of destroying the shrine of the 12th imam is part of an inter-Muslim civil war that had begun long before the forces of al-Qaida decided to exploit that war and also to export it to non-Muslim soil. Yes, we did indeed underestimate the ferocity and ruthlessness of the jihadists in Iraq. Where, one might inquire, have we not underestimated those forces and their virulence? (We are currently underestimating them in Nigeria, for example, which is plainly next on the Bin Laden hit list and about which I have been boring on ever since Bin Laden was good enough to warn us in the fall of 2004.)

In the face of this global threat, and its recent and alarmingly rapid projection onto European and American soil, Fukuyama proposes beefing up ‘the State Department, USAID, the National Endowment for Democracy and the like’. You might expect a citation from a Pew poll at about this point, and, don’t worry, he doesn’t leave that out, either. But I have to admire that vague and lazy closing phrase ‘and the like’. Hegel meets Karen Hughes! Perhaps some genius at the CIA is even now preparing to subsidise a new version of Encounter magazine to be circulated among the intellectuals of Kashmir or Kabul or Kazakhstan? Not such a bad idea in itself, perhaps, but no substitute for having a battle-hardened army that has actually learned from fighting in the terrible conditions of rogue-state/failed-state combat. Is anyone so blind as to suppose that we shall not be needing this hard-bought experience in the future?

Policy and history

I have my own criticisms both of my one-time Trotskyist comrades and of my temporary neocon allies, but it can be said of the former that they saw Hitlerism and Stalinism coming – and also saw that the two foes would one day fuse together – and so did what they could to sound the alarm. And it can be said of the latter (which, alas, it can’t be said of the former) that they looked at Milosevic and Saddam and the Taliban and realised that they would have to be confronted sooner rather than later.

Fukuyama’s essay betrays a secret academic wish to be living in ‘normal’ times once more, times that will ‘restore the authority of foreign policy “realists” in the tradition of Henry Kissinger’. Fat chance, Francis! Kissinger is moribund, and the memory of his failed dictator’s club is too fresh to be dignified with the term ‘tradition’. If you can’t have a sense of policy, you should at least try to have a sense of history. America at the Crossroads evidently has neither.

Christopher Hitchens is a columnist for Vanity Fair. His most recent books are Thomas Jefferson: Author of America and Love, Poverty, and War. This article was first published on www.slate.com.