Georgia: a sign of things to come

I wrote the article below for this month's Labour Briefing:

If the narrative presented to the world by Western leaders and their compliant media is anything to be believed, the recent conflict in Georgia was pretty straightforward. Just over four years ago, the Georgian people rose up in the Rose Revolution against the corrupt regime of President Shevardnadze to put in power a government headed by Mikhail Saakashvili which was committed to democratic and economic reform. Angered by Georgia’s defiant embrace of Western democracy, Russia invaded and occupied its tiny helpless neighbour in a manner reminiscent of the Soviet invasions of Hungary and Czechoslovakia. As well as committing numerous crimes against the Georgian population, Russia violated the country’s territorial integrity in an act comparable to Hitler’s annexation of the Sudetenland in 1938.

Unsurprisingly, the real story is a little more complicated. Under Soviet rule, South Ossetia had been an autonomous republic within Georgia. As the Soviet Union disintegrated in the early 1990s, both Georgia and South Ossetia declared themselves independent states. The citizens of the new tiny republic had natural cultural affinity with North Ossetia which remains a constituent component of the modern Russian Federation. South Ossetia held its own elections, leading Georgia to quash its autonomous status and launch a war to force it back under its control. Around a thousand civilians were killed and numerous villages destroyed by Georgian forces. After Georgia was forced to accept a ceasefire in 1992, South Ossetia existed as a de facto independent state, a fact ratified by a referendum which yielded a near-unanimous vote for separation from Georgia.

When the US-groomed Mikhail Saakashvili, a former minister in Shevardnadze’s government, came to power in 2004, he rode a wave of nationalism and made clear his determination to bring South Ossetia back under Georgian control. As Labour Briefing wrote in March 2004: “His nationalist agenda is popular with right wing Georgians opposed to any more concessions to separatists…” Although Saakashvili’s own regime has a dubious democratic record which led to widespread opposition protests, it has acted as a virtual proxy for the US. Indeed, the Georgian military has benefited from extensive training and aid from both the US and Israel.

With the eyes of the world on the opening ceremony of the Olympics on 8 August, Georgians mounted a sudden attack on South Ossetia in which an estimated 1,492 civilians were killed, leaving the capital in ruins. This strategically disastrous move prompted a counter-attack by the separatist republic’s allies in Moscow in which Russian troops moved deep into Georgia’s territory in an attempt to permanently put its military out of action. The outcome: Georgia was humiliated, Russia proven to be resurgent, and hundreds of innocent civilians were killed.

Does the clear-cut case for South Ossetian self-determination mean that we should back Russia in this conflict? No. Socialists have no business falling into the trap of believing “the enemy of my enemy is my friend” – or in thinking that big powers regard small oppressed nations as anything other than chess pieces. Putin’s authoritarian regime is the political wing of the oligarchs who plundered Russia’s resources following the collapse of Stalinism. It has dismantled whatever vestiges of democracy existed in Russia while aggressively pursuing neo-liberal policies, including abandoning remaining Soviet-era social benefits.

Those who think Putin’s ruling coterie has any genuine interest in South Ossetia’s struggle for self-determination should cast their eyes over to the rubble of Chechnya and the slaughter, maiming and rape of thousands of its inhabitants during the crushing of its own war of independence. Like the West in the Kosovo war of 1999, Russia has manipulated a nation’s genuine desire for national self-determination for its own strategic ends. Of course, US protests over Russia’s actions are hypocritical beyond satire given its own use of humanitarian rhetoric to justify invading Iraq or, most relevantly, bombing Yugoslavia and causing a far greater number of deaths. That does not mean we should overlook the dozens of Georgian civilians killed by Russian forces or have any illusions in Putin’s motives.

There are a number of lessons to be drawn from this conflict. Firstly, the era of US hegemony has been revealed to be well and truly over. Although US imperialism had received a temporary boost in 1991 from the collapse of its main competitor, the Soviet Union, it has been in steep decline for the past decade. This was perhaps most dramatically exposed by the disastrous outcome of the Iraq war which both demonstrated the limitations of US imperialism and undermined its dominance of the Middle East in favour of Iran. However, this is far from the only factor. The US slice of the global economy has been shrinking for years, China is fast emerging as a superpower, and US power in its traditional Latin American ‘backyard’ is at its lowest point for over a century. Both the Clinton and Bush administrations had taken advantage of the economic ruin of Russia in the 1990s by forcing it out of its traditional spheres of influence and effectively encircling it. Now that Russia is economically resurgent as a result of high energy prices, it has reasserted itself in its own backyard. Russia crippled a pro-Western regime and the US could do little or nothing about it.

Secondly, this could mark the beginning of a decisive push by Russia to reclaim its sphere of influence. Europe is dependent on gas from Russia to keep warm: as the Putin regime knows well, Europe has more to lose from confrontation than Russia. Moscow has already flexed its muscles by cutting off gas to the pro-US regime in neighbouring Ukraine. At present, Ukraine is ruled by a desperately unpopular regime that wants to bring the country into NATO in defiance of popular opinion. Crimea – which was handed to Ukraine from Russia by Khrushchev in 1954 – is mostly inhabited by ethnic Russians and could prove to be another flashpoint. Russia is not likely to attempt to annex areas of former Soviet republics, but actions like that in Georgia will prove instructive lessons to surrounding states aspiring to join the Western fold.

Thirdly, this war could prove to be an opening shot in a new 19th-century style conflict with a range of ‘Great Powers’. Although Georgia lacks its own oil or gas reserves, it has a crucial pipeline pumping up to a million barrels of oil a day to the West. Over the coming years, energy resources will dry up at the same time as countries such as China, Russia and India need increasing amounts of oil to fuel their rise to power. This means that conflicts such as the one we have just witnessed will become more and more common. The division of Europe into rival armed camps before World War I could be replicated except, in this case, on a global scale.

At a time when the left barely exists as a political force and reactionary forces strut the global stage without serious rivals, the temptation to pick between “lesser evils” is strong. The war in South Ossetia gives us a clear message. We must stand for self-determination for all nations, whether for Kosovo or South Ossetia. That does not mean we should indulge the crocodile tears of those who have butchered Iraq or Chechnya.

New Labour and the windfall tax debacle

Thoughtful Blairite blogger Luke Akehurst has just written an article on calls for a windfall tax on energy companies for the New Labour thinktank/faction Progress. For those of you lucky enough not to know who Progress are, they're a faction of rightwing hacks within the Labour party who, generally speaking, support George W Bush's neo-conservative foreign policy, accept or even embrace the Thatcherite consensus (that is: privatisation, weak union power and low taxes on the wealthy and big business), combined with liberal stances on social issues.

Luke's weakest criticism of a windfall tax is that people "won't necessarily clock that it is a tax on business, not them," which will play into the hands of the Tories. The implication here is that people are too thick to understand that a tax on energy companies wouldn't include them - unless, of course, they were harbouring the illusion that they were an energy company.

The bigger problem with Luke's criticism is that a windfall tax is very popular with the public. A recent poll revealed that over two-thirds of people supported such a measure. At a time when energy companies have become about as popular as Robert Mugabe by raking up huge profits while millions struggle to pay fuel bills, Labour would have gained a much-needed bounce in the polls. By coming out in opposition, the Tories would have put themselves explicitly on the side of big business against ordinary people. Instead, Brown's distinctly uninspiring package fell on deaf ears and contributed further to the problems of his adminstration. Indeed, the proposals included a reversal of cuts to Warm Front made by the Government itself over the past few years.

As Luke has probably noticed, a Government that broadly shares his politics has reached record low levels in the opinion polls. Furthermore, even New Labour under Blair introduced a windfall tax on energy companies after the landslide victory of 1997. Would Luke have opposed it then?

Another of Luke's criticisms centres on his fear that a windfall tax would undermine Labour's hard-won campaign to gain business confidence when in Opposition, not least the Prawn Cocktail Offensive led by then-Shadow Chancellor John Smith. The aim of this 'Offensive' was to reassure the City that a Labour Government would accept and continue Thatcherism's pro-business stance, not least the deregulation of the financial services. It is rather unfortunate bringing this up in a week when the catastrophic consequences of New Labour's embrace of an unregulated City have come home to roost. Indeed, public support for taking on the excesses of the City is probably at its greatest in a generation.

Luke then goes on to compare those supporting a windfall tax on energy companies to factions involved in the intra-party struggles of the 1970s. The problem with this is it reveals the obsession of the right - rather than the left - with fighting the battles of the past.

Councillor Akehurst also suggests that the rise in bills could have more to do with rising energy prices rather than companies creaming off profits. Just last year, energy companies paid out over £1.6bn worth of dividends to shareholders - a 19% increase on 2006. While French-owned EDF imposed huge price rises in Britain, in France they were increased by only 2%. Gas prices, on the other hand, went up by only 5%. A senior executive at energy firm E.On recently provoked a huge backlash simply for stating the truth - that high gas and electricity prices meant "more money for us".

In actual fact, a windfall tax is probably the most moderate popular policy on offer. Such is the rising public anger at the unfettered free market capitalism of the last three decades in general that a campaign to bring energy companies into public ownership in order to help Labour's core base - that is, working people - would undoubtedly win widespread popular support. That way we would have an energy sector that exists to protect the interests of consumers rather than shareholders.

Furthermore, the Government is resisting attempts to introduce a feed-in tariff - in large part because of the opposition of the energy companies - which would encourage renewable energy and weaken dependence on gas.

Unfortunately, as long as the Labour Party is dominated by those who share Luke Akehurst's politics - who will defend the Thatcherite consensus to the hilt, no matter how unpopular it becomes - none of these policies have the chance of seeing the light of day.

Will the left benefit from Great Depression II?

Almost exactly sixty years ago, a small group of intellectuals assembled in the scenic Swiss town of Mont Pélérin . “The central values of civilization are in danger,” was their damning conclusion of the state of affairs in the aftermath of World War II. This was a crisis, they believed, that had been “been fostered by a decline of belief in private property and the competitive market.”

This group of intellectuals were headed by Friedrich Hayek and included the likes of Milton Friedman. The economic policies they advocated were to become known as neo-liberalism: but at the time they saw themselves as 19th century laissez-faire liberals. In other words, they advocated turning back the clock to a supposed golden age of unfettered free markets. In the post-war world they were seen as "cranks". Between the 1940s and 1970s, the West was dominated by Keynesian state intervention and welfare capitalism. The left was on the rise and the right was forced to capitulate to a broadly social-democratic agenda. In the Third World, left-led national liberation movements were sweeping to victory. It was entirely realistic in 1975 for Friedman to openly fear that capitalism could prove to be a fleeting historical "accident."

Today, this looks like a world away. The "cranks" of 1948 are (with the exception of Latin America) the only game in town in 2008. Italian ex-Communists, African national liberation movements and the British Labour Party are among those who have embraced doctrines that, a generation ago, belonged to the wackier fringes of the hard right. This process began with a trial run in Chile under General Pinochet's dictatorship. After the oil shocks and economic crisis of the 1970s smashed the post-war Keynesian consensus and the collapse of the Soviet Union prompted the dissolution of the left and the apparent discrediting of alternatives to free-market capitalism, neo-liberalism swept away all before it.

This is why we're in the mess we're in today. Triumphalist neo-liberalism led to mass privatisation, deregulation of the financial markets and the retreat of the state from the economy. The results were economic growth significantly lower than the Keynesian era and stagnating wages for US workers in particular, but crucially, it meant that big business made more money than ever before. Think this is unfair? Tough, was the response, because There Is No Alternative in the post-Soviet world.

Now that their whole world is falling in on itself as a result of these laissez-faire policies, the most right-wing US government in modern history is nationalising financial institutions willy-nilly like Francois Mitterand's Socialist Government in France back in 1981.

It's tempting to indulge a bit of schadenfreude if you're on the left. The problem we face is that a crisis of the right does not necessarily mean an opportunity for the left. Firstly, the left has been shattered as a movement right across the globe, not least because of the repercussions of the collapse of the Soviet Union. Secondly, history shows that economic crisis does not necessarily help the left in any case. The Great Depression of the 1930s led to the violent destruction of the left at the hands of fascism in Europe and, in Britain, the Labour Party was nearly wiped out. The crisis of the 1970s led to the rise of neo-liberalism. Mass unemployment led to the destruction of trade union power right across the Western world.

With the left still barely existing as a global political force, the danger today is that economic crisis will strengthen the hands of already triumphant reactionary forces - authoritarian regimes like that in Russia, far-right parties, nationalism and political apathy. It is true that the right is being forced to abandon outright laissez-faire economics - but would anyone argue that Bush's presidency nationalising banks to save capitalism from itself is any sort of victory for the left?

Until the left can re-emerge as a serious political force, the coming economic catastrophe will simply mean mass unemployment and impoverishment for millions and a further boost for the already victorious right - even when their economic policies have led to disaster. Never has the need for us to focus on rebuilding our battered movement been greater.

A Very Blairite Coup?

You could be forgiven for having a strong sense of deja vu. Almost exactly two years ago, a coterie of Labour MPs and a Minister attempted a putsch against another deeply unpopular Prime Minister. Like today, they warned of electoral disaster if Tony Blair clung to office. "Sadly, it is clear to us - as it is to almost the entire party and the entire country," the letter said, more in sadness than in anger, "that without an urgent change in the leadership of the party it becomes less likely that we will win that election."

The parallels don't end there. Like September 2006, today's coup is led by MPs singing from the exact same political song sheet as the Labour leader. New Labour drones-turned-rebels such as David Cairns, Siobhan MacDonough and Joan Ryan have boasted about their hitherto total loyalty to the leadership - whether that be the invasion of Iraq, top-up fees, attacks on civil liberties or privatisation of public services. None of this cabal have come up with a single criticism of Gordon Brown's policies. Even worse, almost all of these MPs deprived Labour members of a leadership contest last year by sycophantically nominating Brown in droves.

The same goes for serial Brown critic, the increasingly farcical ex-Home Secretary and Neil Kinnock's old fixer, Charles Clarke. At the beginning of September, he gave Brown a few months to get his act together. Again, he didn't suggest a single alternative policy. This isn't surprising because, at the end of the day, Clarke is with Brown on every issue from Iraq to privatisation. Before Brown's coronation last year, Clarke and fellow uber-Blairite Alan Milburn put together a slightly creepy website, the so-called 2020 Vision (which, appropriately, is now closed for business). Anyone remember even one policy suggestion offered up by this bizarre defunct thinktank?

And of course there is the now-infamous article penned by Foreign Secretary David Miliband in the Guardian back in July which had media wonks in a frenzy because of its failure to mention Brown when discussing Labour's future. To be fair, this spectacularly bland piece did hint at reasons for the Government's waning popularity, not least failure to "get on with reforming the NHS sooner." In the Westminster Bubble it really is possible to believe that voters in Glasgow East and Crewe and Nantwich deserted the Labour Party in their thousands because it hadn't privatised the NHS quick enough.

As John McDonnell put it: "Most Labour Party members are looking on aghast as the Blairites and Brownites fight an irrelevant turf war. Its like watching the crew having a punch up on the deck of the Titanic. Without a single policy difference between them they are willing to destroy a Labour Government."

Little wonder that Blairites-Brownites like blogger Luke Akehurst are wringing their hands in despair. "How on earth did we get into this ridiculous situation where people are categorised not by where they sit on an ideological spectrum but by whether they are "Blairites" or "Brownites" - two camps with about as much political - as opposed to personal - difference between them as the Big Enders and Little Enders in Gulliver's Travels...yet who behave towards each other like the Montagues and Capulets?" I couldn't have put it better myself. "Brownites" and "Blairites" have always been purely tribal divisions headed by ex-advisers to both - without an iota of political difference between them.

That said, there is no denying that the Labour Party faces one of the greatest crises in its history. It has been smashed in repeated by-elections, including in safe seats; it was wiped out in local elections; and it has reached historic lows in the opinion polls. Forget the landslide defeat of the 1983 General Election - Labour faces the worst defeat since 1931 - when it won 52 seats.

Why? Although it is widely forgotten, the collapse in Labour's support did not start under Brown. Under Tony Blair, Labour won the 2005 General Election with the lowest support of any winning party in the history of British democracy - that is, only 1 in 5 voters. In both 2001 and 2005, fewer than 3 in 5 bothered to vote - and yet between 1970 and 1997, turnout had never been below 71.5%. In other words, Labour had converged so much with the Tories that - disproportionately - Labour voters were sitting on their hands rather than going out to vote. Again, in the dying days of Blair's administration, Labour was battered in local elections and lost Scotland to the SNP.

A quick glance at the opinion polls over the last couple of years shows that Labour was consistently behind the Tories under Blair, enjoyed an 'anti-Blair' bounce when he finally stood down, then declined to its old position and went downhill from there.

When Brown took over, many people genuinely thought he represented a change - despite many on the left warning that he would prove to be 'Blair without the charisma'. In actual fact, he proved to be even more right-wing. He appointed frothing-at-the-mouth Thatcherites like Digby Jones to the Government; abolished Labour Party Conference; scrapped the 10p tax rate (which even an uber-Blairite like Peter Mandelson attacked); suggested that jobless council house tenants could be evicted; pushed through 42-days detention; and refused to impose a popular windfall tax on energy companies making sickening profits while millions are forced to choose between heating their homes and putting food on the table.

What's more, while his Government fawns over millionaires, it has done everything possible to turn its natural supporters against it, not least by imposing an effective pay cut on millions of public sector workers at a time when fuel and food prices are soaring. The Tories won't win the next election - Labour will lose it because its own supporters will desert it.

Little wonder that, at the Crewe and Nantwich byelection, the most damaging criticism heard on the doorstep was: "We thought he was different from Blair, and he's exactly the same."

In other words: it's the policies, stupid. However, that isn't on the agenda of the rebels who, if they get their way, will parachute in another leader with identical politics who might look a bit better in front of a camera. This represents a rather unfortunate patronising view that voters are stupid enough to back unpopular policies if they're packaged a bit differently.

There is likely to be a leadership election because, even if Brown survives now, it's difficult to see how he will stay in power after the expected Labour defeat in Glenrothes or the likely bloodbath in next year's local elections. The self-serving Parliamentary Labour Party - who are terrified of losing their seats - are divided on when Brown should go, not if. If a contest does happen, then it must be about policies rather than personalities. That's why I'll be campaigning for MPs to allow John McDonnell to stand so we can have a real debate about the future of our party.