From friends to foes: South Sudan’s power pair

JOB: Current president and former vice-president of South Sudan

REPUTATION: A pair of thin-skinned, feuding kleptocrats

From Asmara to Addis, it’s an all too familiar story for Africans – yesterday’s freedom fighters become today’s ambitious autocrats.

Both Kiir, the populist president in his signature black cowboy hat, and Machar, the PhD with blood on his hands (forced to apologize for the massacre of 2,000 Dinka), earned their spurs fighting for South Sudan’s independence, a bitter decades-long struggle that saw three million die in the crossfire between the southern Sudanese People’s Liberation Front (SPLF) and the Sudanese government in Khartoum. The accidental death of long-time SPLF leader John Garang in 2005 (who believed South Sudan should maintain its autonomous status) left the movement in the hands of Kiir and Machar who favoured outright independence.

After a successful referendum in 2011, things looked rosy for an independent South Sudan with a healthy starting budget balance and great oil and mineral wealth. Just six years later the country has deteriorated into the definition of an ungovernable failed state, plagued by a chronic lack of food and basic physical security. According to Transparency International’s 2016 Index, South Sudan is also the second-most corrupt country in the world.

Few in power have clean hands. Kiir became the county’s first president with Machar gaining the vice-presidency. From the get go, it was definitely not a marriage made in heaven. Both have reputations for fragile Trump-like egos – Kiir once threw a newspaper editor in jail for his lack of respect in reporting his daughter’s lavish wedding. Kiir, from the majority Dinka tribe, and Machar, from the second-largest Nuers, both cynically use deeply rooted tribal tensions to buttress their own positions. After years of strain, the shaky Kiir-Machar alliance came completely unglued in December 2013 after a gunfight among Presidential Guards of the Tiger Division in the capital Juba.

The violence was spurred by still unproven rumours of a military coup. The Nuer Machar faction of the Division took to the bush and civil war made the perilous existence of the South Sudanese people even more so. The dissident faction formed the SPLM-IO (SPLM in Opposition) under the titular leadership of Machar, who is currently under house arrest in Pretoria, South Africa.

For two years running the newly independent South Sudan has been forced to cancel its official independence day celebrations. Not that there is much to celebrate – although that usually doesn’t stop those bent on national puffery. The treasury is bare, and insecurity and starvation stalk the land. The former is due to a combination of constant tribal civil war and entrepreneurial crime fuelled by a flood of weapons and angry young men without much else to do. The latter currently has hundreds of thousands teetering on the edge of famine, with food aid used as a political football by both sides.

LOW CUNNING:
Kiir repeatedly declares his corruption-fighting credentials but in April 2013 he fired deputy foreign minister Elias Wako Nyamellel for acknowledging that South Sudan is corrupt and ‘rotten to the core’.

SENSE OF HUMOUR:
Kiir jokes that ‘my 10 years in power are worse than his many years in the bush fighting for independence’. Not many South Sudanese would disagree.

There was a brief flash of hope in 2015. But despite a great hand-shaking by the two antagonists to celebrate a ceasefire signed in Addis Ababa (put together over 18 months by negotiating teams on up to $2,000 a day), it was widely ignored on the ground. So today South Sudan is awash with weapons, child soldiers, refugees, rape, famine and arbitrary repression of everyone from foreign NGOs to dissident journalists and activists.

Since the war restarted some 1.8 million have fled the country with another 1.9 million displaced. In the long term radical change is needed. But a start could be if the UN embargo against exporting weapons to a country spending millions on arms in the middle of a famine were respected – Canada, Israel and China are among many suspected violators. And Kiir and Machar need to be pressured to end their divisive political grandstanding – opening talks to ease Dinka/Nuer tensions is just a phone call away.

Sources: The Guardian; The Daily Mail; openDemocracy.net; Wikipedia; BBC; Al Jazeera; thesudantribune.com; Transparency International; The Washington Post; The Globe and Mail; www.chatham house.org; suddinstitute.org; africanarguments.org

Header Image: Riek Machar (left) and Salva Kiir (right) sit for an official photo. Picture: Albert Gonzalez Farran/AFP/Getty Images

Our picks from the Toronto Hot Docs

Highlights from the largest documentary film festival in the world.

Chasing Coral (93 minutes)

directed by Jeff Orlowski

It’s hard to believe that a documentary can reduce the viewer to almost tearful identification with a bunch of polyps anchored on the ocean floor singularly lacking in cute faces or limpid eyes. But Orlowski and his team do just that, moving from the Caribbean to the Pacific, and ending up on Australia’s Great Barrier Reef – nature’s Manhattan – to show with spectacular underwater camera-work that coral is a living and wondrous thing. Time-lapse photography provides evidence of climate change that even Donald Trump would have trouble denying. Chasing Coral blends thoughtful testimonies from marine biologists, with stories like that of a self-confessed ‘coral nerd’ from landlocked Colorado, to paint an ecocide in the making. And it tells us what we need to do to stop it.

★★★★

Winnie (98 minutes)

directed by Pascale Lamche

This is a political and personal profile of the charismatic and controversial first lady of South Africa’s anti-apartheid movement. Lamche combines well-deployed archival footage with startling interviews from various parts of the political spectrum in a largely successful attempt to revive the reputation of Nelson Mandala’s ‘struggle wife’. In doing so, she raises important questions about the deal struck to end apartheid and the subsequent Peace and Reconciliation Process, and the way in which both have set limits on South African emancipation. Winnie Madikizela-Mandela comes through as a complicated and strong figure, who often stood alone in some of the darkest days of white nationalist domination.

Winnie

The film moves like a freight train through recent South African history, portraying Winnie as a proud rock of the movement who is targeted first by the security services of the regime, and then by many of her own ANC comrades. Did her pride lead her to commit crimes in the name of anti-apartheid? The film leans towards ‘no’, but the question remains unanswered.

★★★

Blurred Lines: Inside the Art World
(80 minutes)

directed by Barry Aldrich

A fascinating exploration-exposé of the business of modern art, this film seeks to address why, when stock markets around the world plunged in 2008, knocking billions off share prices, the price of modern art on auction at Sotheby’s and Christie’s barely blinked. Big-time art dealers, agents, auction houses, galleries, public museums, critics, major collectors, show organizers and artists themselves come under the director’s microscope, as he exposes the ‘nod-and-a-wink’ world of intersecting corruptions.

Blurred Lines

Art journalists and idiosyncratic insiders explain how this environment operates against a background of glitzy, high profile openings to international art shows. The only question not answered (or asked) is how did the super-rich gather the wealth necessary to participate in this game?

★★★

Joshua: Teenager vs Superpower
(78 minutes)

directed by Joe Piscatella

Joshua

You can’t search Joshua Wong’s name on Chinese search engines. But nerdish, bespectacled Wong is both the unlikely star of this film and the catalyst of the democratic movement that shook Hong Kong in defiance of the overlords in Beijing. From age 11 (he is now 21), Wong’s indomitable spirit and impressive courage has meant trouble for the elite that wants to integrate Hong Kong into the authoritarian mould of Chinese capitalism. The film catches the movement from its early days, resisting a propagandist national education policy, to the 2014 mobilization of hundreds of thousands of Hong Kong residents to assert their right to the democratic self-rule promised under the ‘one country, two systems’ agreement. The film moves back and forth between street action and the strategy sessions of a core group of activists behind the movement. This kind of access provides a gripping blend of non-violent protest with an intimate biography of an emerging popular leader who just won’t go away.

★★★

Ask the Sexpert (75 minutes)

directed by Vaishali Sinha

Sexpert

This is a heart-warming profile of a 90-year-old Mumbai gynaecologist turned sex therapist. Dr Mahinder Whatsa started along the sex advice route when a local newspaper editor suggested he run a column in the paper; his non-judgemental common sense was an instant hit with those in need. Now, Dr Whatsa has become a local celebrity, seeing clients at all hours of the day and night in his apartment perched on the Mumbai waterfront. In a country with a reputation for puritanical moralism, he has been an irritant to local conservatives. One outraged woman is even trying to shut him up by taking him to court for defying arcane indecency laws. But with gentle humour and an unflagging commitment to gender equality and sexual health, the sex-positive Whatsa just keeps going. Ask the Sexpert is one small antidote that shows that multi-dimensional India cannot be contained by the narrow-minded, martial, religious nationalism of Narendra Modi’s BJP party.

★★★

All films reviewed by Richard Swift

City of Ghosts (91 minutes)

directed by Martin Heineman

Ghost

This documentary about the citizen journalists behind Raqqa is Being Slaughtered Silently (RBSS) is definitely not for the faint hearted. It contains shocking execution scenes (including some carried out by children) perpetrated by Daesh (ISIS) during the brutal ‘pacification’ of the capital of their caliphate in Eastern Syria. The camera moves between clandestine shooting in Raqqa itself, to footage from an increasingly dangerous Eastern Turkey, to RBSS ‘safe houses’ in Germany. We become acquainted with the incredibly brave but severely traumatized figures who make up the core of RBSS’s external group and who amplify the news gathered from increasingly desperate activists left behind in the city. The immediacy and direct access of City of Shadows leaves the viewer with an all too real sense of what Daesh is about and the perils involved in resisting them. In the end the activists of RBSS (many of whom have been killed) struggle to maintain their sanity and some sense of a normal life while still keeping up this desperately important work.

★★★★

All films reviewed by Richard Swift

Introducing Ecuador's Lenin Moreno

Lenin Moreno
Ecuador's new president, Lenin Moreno. Credit:  Agencia de Noticias ANDES

In a hotly contested April election, Ecuadorians replaced one Leftist president with another. The result was unusual in several ways.

Firstly, the new president, 64-year-old Lenin Moreno, is paraplegic and now the world’s only head of state in a wheelchair. In 2013, he was nominated for a Nobel Peace Prize for his advocacy work for disabled people.

With Latin America’s Bolivarian and leftist wave in definite ebb (losses in Brazil, Argentina, Venezuela and a referendum defeat in Bolivia), Moreno’s election to replace Rafael Correa is a sign that the conservative drift on the continent may be slowing. And unlike Presidents to the north in Venezuela and to the south in Bolivia, Correa did not try to extend his term indefinitely, choosing instead to step down from power and break the identification of ‘21st century socialism’ with one particular leader. This proved quite successful – Moreno and his Alianza Pais party won nearly 52 per cent of the vote in the second round of the election, on 2 April this year.

Moreno, whose disability resulted from a brutal robbery, used laughter therapy as part of his recovery. He promises to continue ‘the revolution’ listening more closely to critics than Correa who faced charges of high-handed censorship and corruption. Julian Assange of Wikileaks fame, who resides in exile in the Ecuadorean embassy in London, was much relieved by Moreno’s victory since his opponent, conservative pro-austerity banker Guillermo Lasso, had promised save tax dollars by ending the offer of sanctuary.

The populist moment

01.04.2017-populisist-moment-590.jpg

© Volker Straeter

Populism sure is getting bad reviews. All manner of evil is getting laid at its door: racism, xenophobia, authoritarianism, jingoism – and that’s just the start. The conventional view is that populism is an irrational and impatient response to modern dilemmas that are best solved by conventional politics and economics. There is much evidence linking current politicians and political campaigns deemed populist – Trump, much of the Brexit campaign, Orbán in Hungary, the far-Right parties across Europe – to simple-minded scapegoating as a way to achieve or stay in power. But throwing the term populism around so loosely is just a bit too easy and analytically lazy.

For a start – who is a populist? Looking over the span of decades since decolonization (the 1950s and 1960s) a plethora of leaders and their movements have earned the label. These include Julius Nyerere of Tanzania, Kwame Nkrumah of Ghana and Thomas Sankara of Burkina Faso. Here we have some of Africa’s most revered and effective leaders. Sankara (who did not have much time before his assassination) and the others earned their populist labels by their effort to forge a deeper, more self-reliant decolonization than so many African leaders were willing to settle for. Today, Ghana and Tanzania are two of the more coherently democratic societies in post-colonial Africa.

Pile of populists

More recently, in Latin America a wave of leftwing governments (referred to as Bolivarian) were swept into power by poor voters tired of brutal military rule that enriched the continent’s oligarchs and transnational corporations to the cost of everyone else. In country after country these ‘populists’ pursued egalitarian goals and significantly reduced both extreme poverty and inequality. Much (but not all) of this movement is now in retreat, suffering problems of bureaucratism and corruption that also plagued its more conventional predecessors.

Left populism’s recent difficulties have led to much crowing on the part of the privileged in capital cities of Latin America as well as in Washington, London or Ottawa. That harbinger of establishment anti-populism The Economist expressed delight that at least some of Latin America’s ‘spendthrift’ populists are fading from the scene. There is also a simple-minded tendency to lump all populists together: Cristina Fernández de Kirchner of Argentina (where there is a long history of both Left and Right populism) with the indigenous radicalism that propelled the still-popular Evo Morales and his MAS party to power in Bolivia.

Drawing the ‘unwashed’ into politics is perceived as a threat by anti-populists, who prefer to preside over a mass of passive consumers and resentful taxpayers

Populist credentials often seem to hang on personal political style. It is much easier for a fiery balcony orator like Hugo Chávez (a lightning rod of the anti-populists) to carry the label than Uruguay’s José ‘Pepe’ Mujica (a former Tupamaro guerrilla) famous for his integrity and modest personal lifestyle. Yet both get dumped in the populist pile.

Also lost on the anti-populists is the absurdity of placing Silvio Berlusconi (the very model for Donald Trump?) in the same bag as Beppe Grillo of Italy’s popular Five Star protest movement that, whatever its faults, is opposed to almost everything Berlusconi represents. Their definition of populism is wedded to a loose notion of appealing to the people outside the conventions and structures of politics-as-usual. Drawing the ‘unwashed’ into politics is perceived as a threat by anti-populists, who prefer to preside over a mass of passive consumers and resentful taxpayers. But what gets missed in this blanket assault is that populism comes from all parts of the political spectrum, with widely varying philosophies, levels of integrity and preoccupations. Perhaps surprisingly, the simplest and clearest definition of populism comes from a lapsed aristocratic neoconservative, the Japanese-American political philosopher Francis Fukuyama. According to him, populism is ‘the label that political elites attach to policies supported by local citizens that they don’t like’.

Trapped in the centre

Maybe it’s easier to define what isn’t populism than what is. The ‘neoliberal consensus’ that spreads from the centre-Left to the centre-Right and champions the discipline of the global market as the best way of organizing human affairs is definitely not populist. The shrinking difference between Left and Right in contemporary politics is based on the notion that ‘there is no alternative’ to a system in which most people feel they have little or no control. A professional political class has usurped any notion that democracy is about the broad self-governance of the citizenry.

Fortunately people are stubborn in clinging to the notion that we don’t live in the best of all possible worlds and that things could and should be different

Bill Clinton’s infamous campaign slogan ‘It’s the economy, stupid’ captures the flavour of it all. The economy and those who control it set the limits of democratic choice. In daily life, debt and poverty box in far too many. Bureaucratic states in combination with the corporate economy are set on an auto-pilot course of carbon-based growth, economic insecurity, inequality and ecological destruction. It is the champions of this system that so easily throw around the P-word to express a coded disdain for ordinary people and their political capacities. Their technocratic arrogance has provoked the current ‘populist moment’, most recently bringing us Donald Trump but also Bernie Sanders.

Fortunately, people are stubborn in clinging to the notion that we don’t live in the best of all possible worlds and that things could and should be different. That some of these hopes turn in illusory and misguided directions and can be captured by monsters for their own dubious purposes is undeniable. How could it be otherwise in a system poisoned by the Hobbesian ethic of the ‘war of all against all’ – where the insecure are too easily manipulated to look down for scapegoats rather than up at the glamorous wealthy for causes of their grief? At their best, Left variants of populism draw a line between the besieged majority and ‘Old Corruption’ as the British radical pamphleteer William Cobbett used to describe it back in the day. For The People’s Party in 19th-century western US states like Kansas and Idaho, the main culprits were the banks, railroads and the gold standard. Today, Occupy calls it the one per cent, and Spain’s anti-austerity Podemos refers to it as la Casta (a scandal-ridden political class) – but it’s still Old Corruption in designer clothes. Populists are often accused of the crime of trading in the blame of ‘Others’, but it is one thing to be critical of corrupt political elites and big banks, and quite another to scapegoat vulnerable minorities: whether immigrants, refugees, Roma or Jews. The undoubted shortcomings of Left populism need to be leavened by a cosmopolitan tolerance and internationalism if it is to effectively undercut the jingoism of the Right.

While the intelligentsia will always be suspicious of populism of whatever stripe, these days, without Left populist parties and movements, the political polarization is between racist and xenophobic movements of the populist Right and the sterile consensus politics of the Centre Right and Centre Left. It is becoming apparent that this Centre simply cannot hold. The notion that we as a species are in profound crisis is rapidly spreading. The problems we face of wrenching inequality and the carbon countdown to climate degradation do not lend themselves to a little technocratic tinkering. The basic structures of capitalist society need a thorough rethink that must involve a broadening of democracy. A rough-and-ready and even impolite populism of the Left, unafraid of accusation and confrontation, could be an important agent in building such a sustainable future.

Richard Swift is a former co-editor of New Internationalist and author of SOS Alternatives to Capitalism.

The Transition Movements meets De-Growth

Co-Founder of the Transition Movement, Naresh Giangrande in conversation with Richard Swift, author of SOS Alternatives to Capitalism and a former editor of New Internationalist magazine for more than two decades. These two thinkers were brought together in the Caribbean island of Dominica, with Earthbooktv's Jessica Canham and Timothy Speaks Fishleigh at the Earthbook retreat centre in the mountains of Dominica.

Tax cheating, easy living

Tax cheating
Tax cheating: Floating on top of the world – a well-heeled client enjoys himself in the infinity pool of the luxurious Marina Bay Sands hotel overlooking Singapore’s financial district (where discretion is guaranteed). ©Paolo Woods & Gabriele Galimberti/INSTITUTE

Should I declare it? It’s a question many of us ask as tax time rolls around. Aside from the fear of getting caught, why do we actually pay taxes? After all, anyone’s individual taxes don’t amount to very much in the overall scheme of things. Who would miss them? And then there are all those irritating things governments waste our taxes on – corporate subsidies, expensive military hardware, big salaries for high-handed bureaucrats.

But in the end our taxes are also part of the social bond that ties us together as a society: giving us basic services we all need, supporting the most vulnerable of us and restraining the predatory tendencies to which capitalism seems preternaturally inclined. If we look at it this way, taxes are the gift we give each other. When we lose faith in that simple truth, we move a little bit closer to the abyss of the ‘war of all against all’.

This year has been a bad one for tax cheats. The New York Times’ October disclosure that Donald Trump likely used a variety of accounting tricks to avoid paying nearly a billion dollars in federal taxes was only one in a string of shocking revelations that shed new light on the unfair tax practices of transnationals and the ultra-rich. From Apple Ireland’s spat with the European Union to the Panama Papers and Bahamas Leaks, this year has seen tax dodgers in the limelight as never before. And with public pressure mounting, even the political class has taken notice, with David Cameron – himself the not-so-proud beneficiary of an offshore trust – vowing last May to ‘push… corruption to the top of the international agenda’.1 Given the heat, it’s easy to imagine tax cheats sweating in their designer suits.

Or maybe not. After all, this is hardly the first time tax dodging has gone under the microscope. In the wake of the 2008 financial crisis, G20 leaders came together to proclaim ‘the end of financial secrecy’. As far back as 1961, John F Kennedy was asking US Congress for legislation to drive tax havens ‘out of existence’.2 Yet since the 1960s, the amount of wealth held in tax havens and secrecy jurisdictions – the term experts use to refer to the 70-odd offshore financial centres whose low tax rates and loose regulations draw tax cheats the world over – has increased astronomically. Since 2008 alone, private wealth parked in tax havens increased by a staggering 25 per cent.3 While exact figures are hard to come by, French economist Gabriel Zucman estimates – conservatively – that $7.6 trillion is currently held offshore, eight per cent of total global financial wealth.3 James Henry, senior advisor at the Tax Justice Network, puts that number much higher, at anywhere from $21 to $32 trillion.4

While economists continue to quibble about the exact figures, all agree that the offshore economy is massive. More than half of all banking assets are routed offshore, as is about half of global trade. Like it or not – and most of us have many reasons not to like it – the offshore world isn’t going anywhere.

The life offshore

What is ‘offshore’? The word conjures images of swaying palm trees, expensive cigars and lax tax laws – sleepy islands where corrupt plutocrats and cunning mobsters quietly squirrel away their ill-begotten millions. And while this is certainly part of the offshore equation, it only scratches the surface. In essence, offshore is anywhere that allows its clients – a mix of criminals, corporations and the very rich – to get around the pesky taxes and regulations imposed by other jurisdictions. While Caribbean tax havens still play an important role, some of the biggest players in the offshore world are not islands at all. The City of London sits at the heart of a colonial network of secrecy jurisdictions and offshore financial centres comprised of its crown dependencies and overseas territories. American banks offer tax-free accounts and secrecy services to illicit foreign capital, making the US one of the biggest players in the offshore economy. Many of offshore’s biggest clients are establishment figures like Iceland’s former prime minister Sigmundur Gunnlaugsson and familiar brands like Pepsi, Google and Facebook.

Tax cheating: Campaigners help force consumer-sensitive Starbucks to pay $9.7 million in UK taxes – which corporate avoiders are next in the crosshairs?  Jenny Matthews/Alamy Stock Photo
CaptionTax cheating: Campaigners help force consumer-sensitive Starbucks to pay $9.7 million in UK taxes – which corporate avoiders are next in the crosshairs? Jenny Matthews/Alamy Stock Photo

Today the offshore world comprises an economic system, a complex web of tax havens and secrecy jurisdictions that is simultaneously separate from and integral to the functioning of the global economy. Each cog within this system has its own special function: from offices in London or New York, the wealthy use arcane accounting arrangements to squirrel away billions in Cayman-domiciled hedge funds, where the money multiplies tax free. Transnationals use complex ‘transfer pricing’ arrangements to shift billions in profit from the large, high-tax nations where they do business to single-employee letterbox subsidiaries in havens like Jersey, Bermuda and Luxembourg. Investment banks and other financial desperadoes take advantage of the low taxes and loose regulation offered offshore to engage in the kind of financial chicanery that destroyed Enron and led to the 2008 credit crunch.

Today, the offshore world has become an essential part of the bloated international financial sector that lies like deadweight on the possibility of a fair economy based on a simple first principle: meeting the basic needs of ordinary people. The system can seem complicated, and that’s the point; tax cheats rely on soporific tax law and fragmented international regulation to shield their money from tax authorities.

An example: a British entrepreneur plans to leave millions to her children, and wants to avoid hefty inheritance tax. She might set up a Bahamian trust to administer the money, which it in turn deposits in an account in the tax-free Caymans. The trust’s directors might be ‘dummy nominees’ – professionals paid to manage hundreds of similar companies. Its beneficiary might turn out to be an anonymous Delaware corporation whose director, a Panamanian lawyer, is bound by attorney-client privilege to conceal the company’s ultimate beneficiaries: in this case, the woman’s now wealthy children.

If the British tax authorities want to look into the money, they will have their work cut out for them. By exploiting strict secrecy laws in tax havens and taking advantage of the arcane tangle of legislation that exists across multiple jurisdictions, cheats are able to dodge tax almost completely, often while staying within the letter of the law.

A story: the Cayman Islands is what’s known as a ‘pure’ tax haven. It imposes no direct tax, meaning that there is zero tax on corporate profits, income, inheritance, or capital gains. As such, it has become a magnet for mobile capital looking to escape the hands of ‘revenuers’. Today, the Caymans are the world’s sixth-biggest banking centre, home to 40 per cent of the world’s hedge funds and thousands of transnational subsidiaries controlling some $1.4 trillion in liabilities.5

More than half of all banking assets are routed offshore, as is about half of global trade

In 2004, the Caymans were hit by Hurricane Ivan, a category-five storm that caused major damage, cutting power and destroying infrastructure across the islands. When the storm cleared, several people were dead and more than a quarter of the islands’ dwellings had been left uninhabitable. This should have had the global financial elite panicking. But markets barely registered Ivan. McKeeva Bush, then leader of Cayman government business, reported that the islands’ financial services industry ‘offered continuity of service throughout the hurricane,’ cheerfully noting that ‘as a consequence of the multi-jurisdictional nature of many Cayman Islands firms, financial service provision continued at a high level.’6

This story underscores an essential point about the offshore world. While the Caymans may be home to 100,000 registered companies, very little substantive economic activity takes place there. Apart from the legion of parasitic lawyers and accountants who have set up shop to facilitate tax dodging, almost all the money in the Caymans – whose citizens derive little benefit from the islands’ outsized financial industry – passes through only on paper on its way to Wall Street or the City of London.

What capital values about the Cayman Islands is not any special technical or productive capacity, but rather its sovereignty; the islands, like most offshore destinations, are a ‘legislative elsewhere’: a financial wild west where the wealthy shape lawmaking and escape cumbersome taxes and regulations.

What’s wrong with tax avoidance?

Tax cheats are careful to stress the difference between evasion and avoidance. While evasion is illegal, avoidance – using complicated accounting tricks and complex multijurisdictional structures to slash tax bills – is not only legal, but imperative. Indeed, many corporate tax avoiders speak proudly of ‘tax neutralization’ strategies, arguing that they owe a ‘fiduciary responsibility’ to shareholders to pay as little tax as possible.

This thinking rests on a neoliberal reformulation of taxation. Most of us still see tax as the price we pay for the social infrastructure – roads, schools, healthcare – that makes democratic life possible. But as a neoliberal ethos of austerity and self-interest comes to dominate our politics, any sense of our social obligations to each other goes out the window. If we are just a conglomerate of isolated individuals, if fortunes really are ‘self-made’ rather than resting on myriad unquantifiable social investments, then tax can only ever be experienced as a ‘burden’. This is why Donald Trump can project himself as the neoliberal hero par excellence, ‘brilliantly [using]’ tax laws to avoid federal taxes.

In this climate of unmitigated greed, tax havens are thriving like never before. Economists estimate that governments lose about $400 billion in tax revenue each year to the offshore economy, more than twice the annual global aid budget.3 This flow of wealth offshore has a corrosive effect on democracy, fuelling inequality and austerity and pushing the burden of taxation onto small local businesses and middle- and working-class taxpayers who cannot afford teams of accountants and lawyers.

Politicians who receive kickbacks and campaign contributions from tax abusers continue to drag their feet

As taxation becomes an optional matter for those with means, those without begin to wonder why they have been left to foot the bill. In countries like Greece and Italy, and large parts of the Global South, a contagion of tax avoidance is spreading throughout the economy, undermining all revenue collection and drying up the fragile glue that holds society together.

The offshore system also drives harmful tax competition, pushing down tax rates worldwide. In a globalized economy, where capital is free to choose where to set up shop, national economies must compete with each other in order to attract and keep jobs and investment. If transnationals don’t like a particular tax or regulatory regime, the threat of relocation is often enough to get policymakers to see things their way. If not, there is always somewhere else eager to offer lower tax and other sweeteners. Whether it is Belgium’s fiscal incentive scheme aiding McDonald’s and some 35 other corporate freeloaders, or sweetheart tax deals offered to the mining industry from East Africa to the Nevada desert, politicians of all stripes live in fear of the ‘jobs hissy fit’ that corporate CEOs are so good at throwing if they don’t get their way. Tax competition further undermines democracy globally, wrestling control of tax policy from elected governments and forcing countries into a Hobbesian race to the bottom. Some experts believe that in 10 years, corporate taxation will be a thing of the past.

The offshore system has had a particularly devastating impact in the Global South, where a combination of rampant corruption and decrepit tax administrations has amplified its impact. It’s estimated that between 2004 and 2013, more than $7.8 trillion flowed illicitly from developing economies to offshore accounts; many such economies lose more to tax havens than they receive in aid and foreign investment combined.7 In sub-Saharan Africa, the problem is so bad that experts estimate the continent has lost 80 cents for every dollar of external debt accrued since 1975.8 While Western politicians are quick to point a finger at supposedly endemic ‘third world’ corruption, little attention is paid to the role of tax havens, including both the US and the City of London, in actively abetting the illegal transfer of wealth from developing economies.

When will it end?

Little is being done to curb tax avoidance and rein in the offshore system. While it’s true that, after years of half-hearted and ineffective legislation, pressure from civil society is finally forcing governments to take tax cheats seriously, the response is still surprisingly lacklustre. Yet the technical problems are not insurmountable, and economists have offered ambitious but doable proposals on how to begin tackling tax dodgers. Britain could, with the swoop of a pen, reform the vast network of crown dependencies and overseas territories over which it has ultimate political control – it exercised this power in 2000 to decriminalize homosexuality in its Caribbean territories.9

The problem is political will. The offshore system continues to survive and thrive because there are powerful interests – one-per-centers and transnational corporations – who want it that way. Lawmakers seeking to reform the system are continually met with fierce resistance from powerful lobby groups like the Coalition for Tax Competition. Politicians who receive kickbacks and campaign contributions from tax abusers continue to drag their feet. Many politicians are themselves enthusiastic participants in the offshore economy: the Panama Papers revelations have compromised political luminaries such as Ukrainian President Petro Poroshenko, the King of Saudi Arabia, and close relatives of Syrian Dictator Bashar al-Assad. In this climate of rampant greed and corruption, the impetus falls on regular citizens to hold tax cheats to account. No-one else will do it for us.

  1. The Independent nin.tl/anti-corruption-2016
  2. Nicholas Shaxson, Treasure Islands, Vintage books, London, 2012.
  3. Gabriel Zucman, The Hidden Wealth of Nations, University of Chicago Press, 2015.
  4. James Henry, The Price of Offshore Revisited, Tax Justice Network, July 2012.
  5. Financial Secrecy Index nin.tl/cayman-offshoring
  6. UK Parliament nin.tl/ivan-cayman
  7. Global Financial Integrity nin.tl/illicit-flows
  8. Elcano Royal Institute nin.tl/Africa-capital-flight
  9. Pink News nin.tl/gay-rights-cayman

HotDocs Festival - Film review special

Still from Norman Lear film

Norman Lear: Just Another Version of You

directed by Rachel Grady and Heidi Ewing. (91 minutes)
normanlearfilm.com

This is a polished documentary biopic of one of the great innovators of mainstream US television. Lear is now a dynamic 92-year-old, still full of energy and ideas. The film strings together some fabulous music with often amusing footage from Lear’s youth (he grew up in a poor and broken Jewish New York family) to later public appearances on talk shows. Throughout, Lear is the very model of wit and grace.

Back in the day, which for Lear was from the late 1960s into the 1980s, he worked 75-hour-weeks to create and write sit-coms such as All in the Family, Maude, The Jeffersons – bringing issues like racism, reproductive rights, national chauvinism, violence, sexual orientation and drug addiction centre-stage on US network TV. For the fundamentalist Right he was the anti-Christ and they vilified him wherever and whenever they could. He finally quit Hollywood and set up People for the American Way to defend cultural space against their incursions.

Rating: ★★★★

Hooligan Sparrow

directed by Nanfu Wang. (85 minutes)
hooligansparrow.com

Ye Haiyen (‘Hooligan Sparrow’) is a Chinese sex-rights activist who, with great humour and resilience, challenges her country’s hypocrisy, puritanism and exploitative practices. The film opens on the tourist resort island where the irrepressible Ye previously antagonized brothel owners by, as part of her campaign for sex workers’ rights, offering free sex to migrant workers. Now she is on the trail of a local school principal who has been taking 11-year-olds to a resort hotel for sex. (Ye claims it is a widespread practice in China for principals to offer young students to local party officials as bribes.) The publicity forces reluctant police to arrest the teacher and as he is hauled off, Ye, surrounded by fellow activists, sports a sign saying: ‘Hey, principal, get a room with me and leave the kids alone.’

The authorities are not amused. Soon Ye, accompanied by young filmmaker Wang, are fleeing police and assorted pro-government goons. Ye is impressive and so is Wang, who braves smashed cameras to smuggle her footage out of China. Her first film, not the most polished of pieces, is a raw effort to expose injustice under perilous circumstances.

Rating: ★★★

Fireflies in the Abyss

directed by Chandrasekhar Reddy. (88 minutes)
firefliesintheabyss.com

Eleven-year-old Suraj and his friends and family can barely survive as rat-hole miners, scraping coal from rock in a dangerous pit mine in northeast India. Filmmaker Reddy took months winning the trust of these Nepalese migrants by living with them and sharing the risks of going down into the unstable coal pits, his camera perched on a rickety trolley. It makes for a slow and thoughtful documentary.

This is much more than a standard exposé of child labour and appalling working conditions. Reddy captures the rhythms of life in a marginal mining community, and in the laughter and tears of the Nepalese workers themselves. We are immersed in their intersecting personal stories that give a sense of individual hopes and fears against the backdrop of often bleak, at times beautiful, countryside. The kids here grow up too fast, with a stubborn smile and a determination to survive.

Rating: ★★★

A Revolution in Four Seasons

directed by Jesse Deeter. (90 minutes)
revolutioninfourseasons.com

The Arab Spring’s one fragile success story is Tunisia and this film seeks to explore its dynamics through the stories of two women. Both sympathize with the aspirations for freedom, but in radically different ways. One is freelance journalist and blogger Emna Ben Jemaa who craves a secular freedom that fits her cosmopolitan roots in urban Tunis. The other is Jawhara Ettis, a star of the youth movement of the Islamist Ennahda Party, who sees her country’s future in tolerant but decidedly religious terms. She is elected to the Tunisian Parliament after the overthrow of the country’s corrupt leader, Ben Ali.

Deeter resists arranging for the two activists to meet. Instead, she draws from their parallel stories and reactions to the vicissitudes of a revolution in which they invest much hope. Both women marry and have their first child against the backdrop of demonstrations, assassinations and political intrigue. It’s not an easy ride. Tunisia has been scarred by fundamentalist terrorism that threatens to derail the precarious consensus, presenting a cruel challenge to both the women’s perspectives. This is political documentary-making at its best, delivering gripping human drama that provides understanding without sacrificing complexity.

Rating: ★★★★

Do Not Resist

directed by Craig Atkinson. (70 minutes)
donotresistfilm.com

From Ferguson Missouri to small-town USA, this is a harrowing exposé of the militariza­tion of police tactics and technologies. We see a system of profiling and surveillance way beyond the imaginings of the most paranoid activist. We meet the ideologues of this dystopian police state: training cheerleaders who preach the gospel of ‘us’ versus ‘them’ to uniformed superheroes, ‘criminologists’ who champion drones killing without human orders, and the pre-crime profiling of ‘killers’ (mostly people of colour) not yet born.

Modern US policing is organized around highly militarized SWAT squads driving to the homes of potential ‘perps’ at unexpected hours and smashing up their houses and belongings. The tactics and technologies have been road-tested in the occupations of Iraq and Afghanistan. Director Craig Atkinson captures the gung-ho enthusiasm of these frat boy cops with very few discordant or critical voices to puncture the night­mare. It makes for an important document that we ignore at our peril.

Rating: ★★★★

Chasing Asylum

directed by Eva Orner. (96 minutes)
chasingasylum.com.au

Clandestine footage from the Australian refugee gulags on Pacific islands provides an unflinching examination of one of the most draconian anti-migration systems in the world. The Australian political class has constructed this system of camps to send out the message that no illegal migrant will ever be welcome on the shores of the sub-continent. Refugees (mostly from Asia) are left to rot in stifling prisons where lives of regimented boredom are leading to an epidemic of despair and self-harm.

Orner’s footage is striking in that you rarely see the face of camp staff. This is due to fear of the government’s repressive legislation that could mean job loss, hefty fines, even prison for whistleblowers. This contributes to the film’s claustrophobic feel, deriving both from prison bars and the camera playing on the wrists or shoulders of anonymous interviewees. The effects of this refugee policy are intercut with clips of the political elite mobilizing fear and xenophobia to justify the unjustifiable. Orner puts Australia’s shame on display for all to judge.

Rating: ★★★

Introducing... Freddy Lim

Richard Swift

The Campaign Office of Freddy Lim

Talk about unlikely… Who would have imagined that a tattooed heavy-metal musician would break the stale stand-off in Taiwanese politics between the KMT, which pushes for reunification with China, and the Democratic Progressive Party (DPP), which is neither democratic nor progressive.

But in elections on 16 January, Lim and his New Power Party broke through, with six seats. The old Kuomintang-based KMT was routed in both legislative and executive elections; the new president is Tsai Ing-wen of the DPP, the first woman ever to hold the post.

New Power is trying to channel the voice of a younger generation of activists who most recently came to prominence in the Sunflower Movement, which challenged the highly unpopular KMT President Ma Ying-jeou’s unscrupulous manoeuvrings to move the country further into China’s autocratic orbit.

Lim made his name as lead vocalist with popular band Chthonic. Now 39, he has come a long way from his pro-unification student days to become a staunch defender of Taiwanese identity against the predations of an elitist mainland that suppressed the language and culture of his grandparents.

His move from heavy metal to politics came naturally. He explains that in contemporary Taiwan ‘politicians are the most distrusted profession’, while no-one distrusts musicians. So he tidied his wild black hair into a neat bun, hit the campaign trail and won a tightly fought race in the capital, Taipei. He hopes to eliminate the KMT, which he regards as an ‘undemocratic, pre-modern party’ that has dominated Taiwanese life for far too long.

Eco-divide: this changes everything

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by Volker Straeter

The environmental crisis is proving not only a challenge to capitalism but forcing resistance movements to rethink their politics.

The title of this piece comes from Naomi Klein’s excellent book on climate change. There Klein makes the case for a sharp turn away from the looming doomsday that predatory capitalism wilfully refuses to see. But some of the historic alternatives to capitalism have also been blind to this. Before the 1960s, among the notions that the Left shared with capitalism were the centrality (indeed, absolute necessity) of economic growth, a concept of progress dependent on the exploitation of the natural world, and an almost unqualified belief in the beneficial nature of science and technology. The gospel of progress, born in the Enlightenment, held that the future of humanity must depend on ‘the conquest of nature’ to provide the good life. Division came over how this was to be brought about – through the state or through the market, by the bourgeoisie or by the proletariat, and so on.

With the gradual birth of ecological consciousness – landmarked by the publication of Rachel Carson’s 1962 classic Silent Spring on the effects of agrochemicals and the 1970s debate over limits to growth – a profound unease about the assumptions underpinning our productivist society has been gathering momentum.1 Is the widespread use of chemicals in industry and agriculture poisoning our own habitat and that of other species? Is our dependence on non-renewable resources and their rapid depletion putting us in a position of running on empty? Are we turning what should be renewable resources (soil, fish, water, forests – even air) into rapidly depleting non-renewable resources by ‘mining’ them with heavy technologies (building mega-dams and draining aquifers; using trawler fleets and driftnets; allowing agro-chemical runoff, soil compaction and desertification; clear-cutting forests)? Is our dependence on carbon endangering those who live in coastal areas, river valleys, or other habitats vulnerable to extreme weather and other consequences of a global temperature rise?

These questions loom increasingly large, casting a shadow over not only capitalism but any orthodox alternative to it. The dismal communist record on the environment can been seen in the dried-up Aral Sea between Kazakhstan and Uzbekistan, the radioactive protection zone still surrounding the Chernobyl nuclear reactor in Ukraine, and the looming water and energy crisis in China. Under communism, the triumphalist Stalinist mega-project – redirecting rivers, huge hydroelectric dams, soulless high-rise apartment blocks – were the sine qua non of progress.

The collapse of the Soviet bloc actually slowed global climate degradation, at least temporarily, as dysfunctional polluting industries went to the wall. Today, only Cuba, with its emphasis on alternative energy and organic agriculture, stands as a partial alternative to sacrificing the environment on the altar of economic development – and even there it is not clear if ecological initiatives are being carried out through conviction or due to necessities imposed by a Soviet collapse and a US embargo. Only time will tell.

Elsewhere, as with the late Hugo Chávez crafting a form of petro-socialism in Venezuela, short-term advantage seems to be trumping long-term ecological sanity. The history of the post-colonial Global South is marked by nationalist governments, often describing themselves as socialist, that champion development no matter what the ecological costs.

Greening of the Left

An ecologically coherent Left must come to terms with its own productivist roots if it is going to mount a convincing critique of capitalism. The Left must recreate itself by reorganizing around a programme of eco-sanity and challenging a process of growth that is not only moving too fast but also in a clearly unsustainable direction. It is by now pretty obvious that both inequality and growth are built into the very DNA of the capitalist system.

Capitalism can never be about selling us less, living in a more modest way, or reducing inequalities so as to allow us to share within our own societies – let alone the planet as a whole – in a sustainable fashion. The ‘me first’ ethics that underpin consumer culture are in sharp contradiction to the mutuality needed if we are to find a collective way to live more lightly on the earth.

A more basic challenge to the social and ecological wreckage capitalism is piling up is essential. Just a few basic facts are sufficient to show that the current desperate search for new sources of growth is heading us towards oblivion. First, growth rates across the industrial world have been declining for decades. There are no signs of a reversal of this trend – just the opposite. So it makes good sense to seek a different measure for our economic wellbeing aside from growth. Second, the negative impacts of the growth fetish, both ecological and social, are accumulating to a frightening extent. We would need five or six planet Earths if the whole world consumed and polluted at the same rate as US citizens (about three planets by European rates).

It is by now pretty obvious that both inequality and growth are built into the very DNA of the capitalist system

You could explore a range of other issues – such as soil and fresh-water degradation – and arrive at similarly alarming conclusions. Of course, it is true that the ecological footprint is badly skewed in favour of the wealthy. It would take a number of fair-sized African villages to have the same ecological impact as one upper-middle-class multi-vehicle-owning family commuting into New York or London from the affluent suburbs.

Inequality is the other major consequence of skewed capitalist growth. The Occupy movement, protesting against the one per cent and its lightly taxed paper wealth, is just the latest symptom of disenchantment with such obscene disparities. It is here that red and green preoccupations can rub up against one another in an uncomfortable fashion.

For those of an ecosocialist persuasion, it is essential that the costs of slowing growth are borne in an equitable manner. This means that the basic needs of all populations must be taken into account and the reductions associated with diminished growth possibilities, whether planned or unplanned, be applied first and foremost to those with an opulent lifestyle. It is easier to imagine this happening if degrowth takes place in a thought-out fashion rather than through an unplanned application of ‘lifeboat ethics’ that allows the powerful to protect their privileges while the vulnerable go to the wall. But have no doubt – degrowth there will be! It is just a question of whether this will result in equitable and democratic social arrangements or in gate-guarded communities serviced by underpaid workers and surrounded by large populations of environmental refugees.

A post-growth future

Any alternative to capitalism needs a post-growth future. There are by now many strains of Left ecological thinking trying to hammer out just what this might look like. There are the beginnings of a degrowth movement: this started in France and Spain and is now spreading to North America. There is a social ecology movement inspired by the writings of Murray Bookchin. There have been several attempts to fuse the socialist tradition with environmental concerns. Political theorists James O’Connor and John Bellamy Foster have explored such a synthesis in their writings. These are being underpinned intellectually by the burgeoning field of ecological economics, led by such notables as Herman Daly and Joan Martinez-Alier, as well as by a mounting body of climate and other environmental science that continues to reveal the deadly trajectory of the current growth obsession.

From the Global South comes an indigenous perspective based on the defence of Terra Madre, a competing tendency within the Latin American Left. Elsewhere, movements of resistance in Africa and Asia are working to defend the survival economy on which the rural poor depend by standing against deforestation, in defence of watersheds and in defiance of mega-projects designed to fuel various ‘economic miracles’ built on sand. The notion of a different, more equitable, development strategy has long been a counterfoil to the globalizers’ obsession with GDP growth. It has by now reached the point that any alternative to capitalism which does not accord the ecological survival of humanity a central place simply cannot be taken seriously.

Front cover, SOS Alternatives to Capitalism

This article, and the July/August issue main theme ‘Capitalism is spinning out of control’ is based on Richard Swift’s book SOS: Alternatives to Capitalism, which is available to buy through the New Internationalist webshop.

  • Rachel Carson, The Silent Spring, Houghton and Mifflin, New York, 1962.

  • The people’s flag is deep and red

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    © by Volker Straeter

    Socialism organized through the state has been the main way in which humanity has tried to build an alternative to capitalism. We now have a couple of centuries of experience of this so it should be possible to draw up a balance sheet of positives and negatives. From the beginning, the state – or, if not the actually existing state, some idealized version of its socialist reformation – has been for most socialists a source of coherence and justice in opposition to the squalour and instability of the capitalist market. While there have been competing currents of leftist opinion, it is this notion of a rational state as opposed to an irrational market that has until recently carried the day. This is the background needed for any understanding of what has been a largely uncritical view of the potential of the state to install and oversee a socialist alternative. The legitimacy of the political state and the way it exercises power remains one of the Left’s major intellectual blind spots.

    Back in the 19th century the goal of a socialist republic was, for movements of the Left, just the logical conclusion of the democratic dream. Socialist theorists were increasingly aware that capitalism threatened the idea of a fully evolved democracy. Among their most treasured goals was the expansion of the franchise, given that the vote was then restricted largely to males with property. The main alternative in which those opposed to the system invested their hopes was a socialism brought about in one way or another through the democratic transformation of the state. In those days no-one doubted that the triumph of socialism meant more, not less, democracy. Opponents of socialism were staunchly opposed to such an expansion of democracy, seeing it as a form of threatening mob rule.

    Along with other pioneers of socialism, Karl Marx saw the state as the fulcrum that could leverage a fundamental redirection of economic life. Marx, though, had very ambivalent feelings about the state. He thought of it as a transitional phase in the achievement of a stateless form of communism based on the democratic self-rule of producers. He was deeply suspicious of the bourgeois form of the state and saw a radical democratic transformation of it as a necessary precursor to socialism – hence his enthusiasm for the direct democracy of the Paris Commune of 1871.

    The Centre-Left remains trapped in a parliamentary political culture where achieving snail-like incremental reforms is the cause of much self-congratulation

    But in his writings on the state Marx chose to use the unfortunate phrase ‘the dictatorship of the proletariat’ to describe this transitional phase. The word ‘dictatorship’ had a far different and more limited definition in the 19th century than it has today. It meant a kind of directed control that would resist the challenges of the partisans of capitalism (particularly those that profited from the private control of the means of production) to reverse what Marx saw as a primarily democratic transition. But Marxism (not unlike the Bible and the Qur’an) can and has been used to support many different and competing viewpoints and interests. This is certainly true of the notion of ‘the dictatorship of the proletariat’ that was picked up by Lenin and his Bolsheviks (and too many others) to justify whatever draconian police-state measures they deemed necessary to protect their notion of socialism.

    This blind spot about using state power to install socialism from above is common in different ways to the social democratic as well as the communist Left, and it has proved the undoing of the socialist hopes that were so strong in the 19th century. It has been consistently challenged by the advocates of change from below, be they anarchists or other libertarians of the Left. The debate has waxed and waned over the course of the last two centuries, with the ‘practical’ advocates of state power holding the upper hand for most of the time. However, the notion of an alternative from below has never entirely disappeared and, given the eclipse of the Leninist ethos and politics embedded in the communist world, it has become again the principal source of opposition to the tepid reformism of the centre-left tradition.

    Communism and social democracy

    Few would today disagree that over-reliance on a centralized state played a key role in the undoing of both the politics and economics of orthodox communism. The consequence was an alternative to capitalism that was decidedly unattractive, as it squeezed popular democracy and personal freedom while at the same time failing to deliver on the promise of economic prosperity. A highly centralized planning mechanism undermined any effective feedback from below on which to base decisions as to what and how much to produce.

    The result was a combination of shortages and oversupply that became a notorious feature plaguing state communist economies. The system was able to achieve a forced-march industrialization that enabled first the Soviet Union (and, much later, China) to survive in the face of aggression from Hitler’s fascism and other enemies. A certain level of initial equality and security in daily life was eventually undermined by a growth in popular aspirations for a freer life with a wider range of opportunity and economic possibility.

    These systems have now been transformed back into a kind of autocratic capitalism where economic growth (spectacular in the Chinese case) has replaced stagnation but at the cost of galloping inequality. The usual, if limited, political freedoms associated with ‘advanced’ capitalism remain atrophied under these new forms of state capitalism. Undoubted advances in the general level of prosperity have not been accompanied by an opening up of the rights to assembly and independent organization that would allow trade unions and social movements to resist exploitation and inequality effectively. The ideological glue that sustains Russia and China is no longer some communist ideal of equality or producer self-rule but instead Great Power nationalism and individual self-enrichment.

    The other strain of state socialism that has competed with orthodox communism is that of social democracy. This form of moderate socialism gradually separated itself from the (mostly European) revolutionary movements as it became a significant parliamentary force in the latter part of the 19th century. The divisions on the Left were less about democracy than about the speed and scope of the necessary changes, and about whether tactics should involve direct action by popular movements or be restricted to elected representatives of the working-class movement fighting for reform in parliaments. But gradually the Centre-Left learned that the simplest road to electoral success was to cohabit with the power of capital rather than mount a direct challenge to it. On such major questions as a militarized foreign policy, free trade, the rights of corporations, a significant redistribution of wealth, prioritizing growth over the environment and the overweening power of the national security state – the Centre-Left and the Centre-Right have broadly come to agree.

    Capital’s modernizers

    Today’s centre-left parties vary greatly. Few have gone (at least publicly) as far as Britain’s New Labour in their complete commitment to capitalist modernity. It is fair to say, however, that almost all now present themselves in one way or another as modernizers of capitalism rather than as positing an alternative to it. Their aim is to shave off the rough edges by making the system fairer and better thought-out. They underestimate the power of corporate actors to manipulate and undermine whatever ‘rules-based’ economy they envision; they underestimate the essential irrationality and instability on which this ‘most radical of all social systems’ thrives; and they underestimate the sheer inertia in the very structure of the state – a kind of in-built conservative bias that derails their chosen vehicle of reform. They also ignore the myriad ways in which the state is tied into the capitalist power structure – or else simply accept these as the inevitable price of political realism.

    This blind spot about using state power to install socialism from above is common in different ways to the social democratic as well as the communist Left

    Achieving high government office becomes a question of compromise and careers. It tends to trap the Centre-Left into managing the fundamentally undemocratic structures (including the security apparatus) of government, and this sucks all the oxygen out of any remaining social vision. The state in an advanced capitalist society is hemmed in by the sheer weight of the corporate economy on which it depends for the fundamentals of economic wellbeing: growth, taxes and jobs. This gives the corporate elite serious weight (often presented as a subtle form of blackmail) when it comes to blocking any kind of alternative – or even regulatory tinkering that would threaten corporate power and prerogatives.

    Only a radical government with a significant counterweight rooted in society has any hope of facing down such forces. But instead of building this kind of counterweight, the Centre-Left remains trapped in a parliamentary political culture where achieving snail-like incremental reforms is the cause of much self-congratulation. The very things that it criticizes elsewhere in the political culture – hierarchy, short-sightedness, a politics tuned to the news cycle, leadership through personality rather than programme – also shapes its own behaviour. Building the counterweight is then left to the social movements and ecological projects whose vision is not atrophied by this self-defeating form of compromise.

    Front cover, SOS Alternatives to Capitalism

    This article, and the July/August issue main theme ‘Capitalism is spinning out of control’ is based on Richard Swift’s book SOS: Alternatives to Capitalism, which is available to buy through the New Internationalist webshop.

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