The Fatal Flaw of Free Market Capitalism

 

Educating Rita: A Brinda Karat interview

 

Satyapal Malik talks to Rahul Gandhi

 

Economics Essay 96: Joining the Euro

 Evaluate the costs and benefits for a country of joining a currency union, such as the eurozone.

Joining a currency union, such as the Eurozone, can have both costs and benefits for a country. Let's evaluate them:

Benefits of Joining a Currency Union:

1. Elimination of Currency Exchange Costs: By adopting a common currency, countries in a currency union can eliminate transaction costs and exchange rate risks associated with currency conversions within the union. This facilitates cross-border trade, investment, and financial transactions.

2. Enhanced Trade Integration: A single currency can promote trade integration among member countries by removing currency-related barriers. It simplifies pricing, invoicing, and payment processes, leading to increased trade flows and economic integration.

3. Price Transparency and Market Efficiency: A common currency promotes price transparency as consumers can easily compare prices across different member countries. This can enhance market efficiency and competition, benefiting consumers.

4. Increased Foreign Direct Investment: Membership in a currency union can attract more foreign direct investment (FDI) as it provides a stable and predictable economic environment. Investors may find it easier to operate across multiple countries without the complexities of managing currency risks.

Costs and Challenges of Joining a Currency Union:

1. Loss of Monetary Policy Autonomy: Member countries give up their independent monetary policy when joining a currency union. They must adhere to a common monetary policy set by a central authority, which may not be perfectly aligned with their specific economic needs. This can limit their ability to address domestic economic challenges, such as inflation or recession, through monetary policy tools.

2. Limited Fiscal Policy Flexibility: Joining a currency union often entails adherence to fiscal rules and constraints. Member countries must maintain certain fiscal discipline, including limits on budget deficits and public debt levels. This can restrict their ability to use fiscal policy measures, such as deficit spending, during economic downturns.

3. Loss of Exchange Rate Flexibility: Countries in a currency union lose the ability to independently adjust their exchange rates to maintain competitiveness. This can be a disadvantage if a country needs to adjust its exchange rate to respond to external shocks, such as changes in global competitiveness or trade imbalances.

4. Asymmetric Economic Shocks: Economic shocks affect member countries differently due to variations in economic structures, industries, and competitiveness. In a currency union, countries may face challenges in adjusting to these shocks, as they cannot use monetary policy or exchange rate adjustments to mitigate their impact. This can result in uneven economic performance across member countries, leading to disparities in living standards and economic growth rates.

5. Loss of Sovereignty: Joining a currency union involves sharing monetary and economic policy decision-making with other member countries. This can result in a loss of sovereignty and reduced control over crucial economic policy decisions.

In conclusion, joining a currency union, such as the Eurozone, involves trade-offs. While it can provide benefits such as eliminating currency exchange costs, promoting trade integration, and attracting investment, it also comes with costs such as the loss of monetary policy autonomy, limited fiscal flexibility, and challenges in responding to asymmetric economic shocks. Each country needs to carefully evaluate these costs and benefits based on its unique circumstances and priorities before deciding to join a currency union.

What if Work is making us Sick?

 Sarah O'Connor in The FT 

Britain is sick. The number of people claiming disability benefits has doubled in a year. Working-age deaths (that did not involve Covid-19) are on the rise. As Andy Haldane, former chief economist of the Bank of England, put it in a speech recently: “For the first time, probably since the Industrial Revolution . . . health and wellbeing are in retreat”. 

The consequences for the country’s economy have been well chewed over. A rising share of people are now too unwell to work, which makes it harder to tame inflation and boost growth. Understandably, then, “How can we get people back to work?” is the question policymakers keep asking. But what if work itself is part of the problem? 

By many metrics, work is less dangerous to our health than it used to be, especially in a country like the UK where the manufacturing and mining sectors have shrunk so much. Musculoskeletal disorders, which used to be the biggest cause of work-related ill-health, have declined steadily over the past few decades. 

But while work has become less physically dangerous, it seems to have become more psychologically dangerous. Work-related stress, depression and anxiety began to rise about a decade ago. This surged during the pandemic and now accounts for half of all work-related illness. 

Why might that be? We know from government-sponsored survey data that there has been an intensification of work in recent decades across all types of jobs from delivery drivers to corporate lawyers. People are more likely now than in the 1990s to say they work fast and hard to tight deadlines. 

There has also been a drop in the level of control people have over how they work, particularly among lower-paid workers. Between 1992 and 2017, the share of low-paid workers who report that they have a say in decisions which affect their work fell from 44 per cent to 27 per cent, with particularly steep drops among hospitality and retail workers. 

Research shows the combination of high demands and low control at work — known in the academic literature as “job strain” — is bad for mental and physical health. One US study, which followed more than 52,000 working women over four years, found that job strain was associated with a greater increase in body mass index, for example. 

Last week, I interviewed a woman who works in a casino. She works on her feet for 10 hours from 6pm to 4am, gets home, grabs a few hours sleep, then gets up to take her daughter to school. People at the casino often suffer from relationship breakdowns because of the hours, she says. 

The work can be gruelling too. “It’s really mentally hard work sometimes, the hours are not helping us, sometimes [customers] come in drunk at 3am and you are so tired, and they are just swearing at you, so drunk you can’t handle them on the table but you have to do it because it’s your job.” 

Her employer used to do things to make the job easier to cope with, but they have all been stripped away. The free warm dinner is gone, as is the break that was long enough to eat it. The taxi home at 4am is gone. The Christmas bonus is gone. The night premium has gone. “Lately it’s very often happening that people are leaving because they are depressed,” she told me. 

Plenty of countries have experienced similar trends in the quality of work in certain sectors, so why might the UK be struggling more than most? 

Perhaps because the countervailing mechanisms that could protect workers from these trends — the “protective shield”, as Jennifer Dixon of the Health Foundation puts it — are particularly weak in Britain. The country is bad at enforcing its own labour laws, as the P&O debacle showed this year when the company sacked hundreds of sailors without any consultation in what lawyers call an “efficient breach” of employment law. Trade union membership has declined sharply in the private sector. The Health and Safety Executive’s budget has been cut. 

None of this is to say that work is entirely to blame for the nation’s worsening health. There are plenty of other possible causes, from processed foods to rising loneliness and social media, not to mention the pandemic itself and the strain on the NHS. 

But I don’t think any discussion of the country’s health is complete without a clear-eyed look at the reality of life in the UK labour market for those who don’t have decent jobs. Good quality work is beneficial for health. But if we just try to patch people up and push them back into jobs that were making them sick, we won’t get anywhere at all.

A Strong Labour movement Raises everyone’s Living Standards

Owen Jones in The Guardian

Respect for tradition, we are told, underpins the Conservative party. But there’s one tradition for which it has unwavering contempt – strike action: a part of our culture and heritage it has ferociously and instinctively demonised as an antisocial attack on the general public. Tories are known to extol the virtues of rugged individualism, but it seems the collective suddenly matters when industrial action is declared. Then, it seems, society – which in previous Tory eras was doubted to even exist – becomes a totem to be protected from sinister forces, from a malign and externalised striking rabble.

Strikes bring inconvenience. Of course they do. They disrupt our normal life, our plans, our expectations. But the concentrated attempt to stigmatise the very notion of the strike is something that must be resisted. The strike – and the threat of striking – should be celebrated precisely because it underpins many rights and freedoms we now take for granted. Union struggles in the 19th century played a pivotal role in shortening the working day, and in the 20th century, in creating the weekend. In the postwar heyday of union power, they drove up incomes. Strikes are a profound social good.

Yet how little this argument is heard. Anti-union sentiment is profoundly embedded in our political culture. When the Tory chairman, Nadhim Zahawi, suggested on national television that the upcoming nurses’ strike would aid Vladimir Putin by worsening inflation in the west, it was yet another crude illustration of this very British phenomenon, echoing Margaret Thatcher’s denunciation of striking miners as the “enemy within” in the 1980s. This hostility has a long pedigree and, historically at least, the Tories have been known to be candid about their real intentions.

RMT picket at Slough railway station, 8 October 2022. Photograph: Maureen McLean/Rex/Shutterstock

As the 20th century dawned, the Tories defended a legal ruling making unions financially liable for profits lost to strikes, leading the Conservative prime minister Stanley Baldwin to later confess: “The Conservatives can’t talk of class war. They started it.” In 1926, they introduced a raft of anti-union laws in the aftermath of the general strike, including the banning of solidarity industrial action.

But while unions were hobbled in the 1930s, a spirit of collectivism nurtured by wartime sacrifice helped their rebirth. The three-decade social democratic consensus established by Clement Attlee’s Labour government led the Trades Union Congress in 1968 to boast that it had grown from a “small debating assembly” into a body that shared “in the making of government policies, taking part in administering major social services and meeting on equal terms with the spokesmen of the nation’s employers”. This was the era in which Britain enjoyed its highest ever sustained period of economic growth, which – thanks in part to strong unions – was more equitably distributed, boosting the pay of ordinary workers.

When the oil shock of the 1970s sent prices surging, unions mobilised in an effort to match wages with the cost of living. The grand climax – the winter of discontent – was successfully spun by Thatcher to label unions as national bogeyman for a generation. Her successors took up that framing as well. When Tony Blair became prime minister in 1997, he promised that his government would “leave British law the most restrictive on trade unions in the western world”. And David Cameron assailed Ed Miliband as “taking his script from the trade unions”, and turned the screw further, with even more restrictive laws.

But today this anti-union approach jars with political reality. One poll has suggested that nearly six in 10 voters back the nurses’ strike, and another found that more people backed the rail strike than opposed it. After an unprecedented fall in living standards, the default position of millions whose pay packets are shrivelling in real terms has become “well, fair play to them, at least someone is taking a stand”.

While earlier generations of Tories may have used the language of class warfare openly, their modern cohort is savvier. They seek to isolate striking workers from the wider public, portraying them as somehow separate from society at large. Rishi Sunak denounces strikers as a threat to “hardworking families”, as if nurses, paramedics or transport workers are excluded from that category. But this attempt to separate striking workers from society at large collides with the reality people see every day. The withdrawal of strikers’ labour is so noticeable precisely because of how central they are to our way of life. Rather than a middle-finger salute at the general public, it is one part of society crying for help from another.

 

Despite all the talk of monstrous disruption, for most the real inconvenience is struggling to pay bills and feed their children, rather than the irritation of a postponed train journey. Real wages are projected to be lower in 2026 than they were in 2008.

Indeed, a fundamental reason for wages being so low and conditions so poor in the UK is because of the dilution of union power. According to one study, the “changes in bargaining power” suffered by unions explains half of the decline in the share of the economy going to wages over four decades in several rich countries, including Britain. Rather than union action inconveniencing everybody else, the decline of unions has dragged down the wages of non-unionised workers, too, according to a US study. A strong labour movement, in other words, brings up everyone’s living standards.

A strike, then, isn’t antisocial behaviour, on a collision course with the interests of the wider public. By neutering the threat of strike action with authoritarian laws, the Tories have succeeded only in weakening a mechanism with a proven record in raising the living standards of all workers. Despite the mythology, no one goes on strike on a whim. A worker forfeiting a day’s pay isn’t just a sacrifice for the sake of their own interests, it’s a gamble and a sacrifice. Indeed, one of the government’s fears is that a victory for nurses or railway workerswould embolden the pay claims of other workers – an anxiety that is well founded.

Union membership should be honoured not just as a democratic right, but as a cornerstone of collective prosperity. Even many union sympathisers have retreated from such an argument, instead blaming bosses and government for any regretful breakdown in industrial relations. But to strike isn’t a sin, or antisocial or an act of mendacity: it’s a key to a society less beset by injustice than our own.

Striking workers are providing the opposition that Britain desperately needs

Andy Beckett in The Guardian

In Britain, more than in most democratic countries, going on strike is a risk. Your employer, the government, most of the media, much of the public and often the opposition parties are likely to be against you – or, at best, unsupportive. Your loss of income is unlikely to be made up by strike pay. Your behaviour on the picket line will be subject to what Tony Blair described approvingly in 1997 as “the most restrictive” trade union laws “in the western world”.

In very public ways, you will be breaking the rules of the modern economy: refusing to work, inconveniencing consumers, acting collectively rather than individually, and making demands for more money openly – rather than in private, as more powerful people do. If you are on the left, you are likely to be told again and again that your strike is politically counterproductive.

Such are the written and unwritten laws that have constricted British strikes for approaching half a century, ever since the walkouts of the 1978-79 winter of discontent inadvertently did so much to bring Margaret Thatcher to power and to provoke the counter-revolution against workers that still continues today. Many voters have long got used to the idea that strikes are a minority pursuit associated with a bygone age to which the country must not return. Boris Johnson’s government, with its especially strong intolerance of dissent, aims to demonise and marginalise strikes even further.

Yet this summer, more and more Britons are striking or considering striking regardless. From railway workers to barristers, firefighters to doctors, Post Office workers to teachers, nurses to civil servants, council workers to British Telecom engineers, an unusually large potential strike wave is building. Its social breadth, the range of occupations affected and the atmosphere on some picket lines all suggest that something politically significant may be happening.

At the first barristers’ protest, outside the Old Bailey in London this week, an already excited crowd of advocates in courtroom wigs and gowns burst into prolonged applause when they were joined by a few activists in shorts and jeans from the RMT. It’s not every day that you see such camaraderie between self-employed professionals who rely heavily on trains and striking transport workers carrying a banner that calls for “the supersession of the capitalist system by a socialistic order of society”.

The cost of living crisis, and the refusal of the government and other employers to raise wages accordingly, is the immediate reason for this summer’s “wave of resistance”, as Mick Lynch of the RMT union calls it. Yet the causes go deeper: more than a decade of stagnant or falling wages; the long Conservative squeeze on the public sector; and the whole transformation of the British economy since the 1970s, which has effectively taken money from workers and given it to employers, shareholders and the wealthy.


Public dissatisfaction with this model has been growing for years. In the latest British Social Attitudes survey, 64% agree that “‘ordinary people do not get their fair share of the nation’s wealth” – up from 57% in 2019, and far greater than the support for any party. As Labour leader, Jeremy Corbyn tapped into this discontent. But the end of his tenure, and Keir Starmer’s apparent lack of interest in its redistributive ideas, has created a vacuum where a movement with a radical economic agenda ought to be.

It’s possible that the strike wave could become one such movement. While support for the strikes has been stronger than expected - the pollster Savanta ComRes found that even 38% of Tory voters considered the highly disruptive rail strikes “justified”; among younger people this attitude was particularly prevalent. In the same survey, 72% of under-35s backed the strikers. Since few of them have ever been on strike themselves – less than a quarter of trade unionists are under 35 – then the likely explanation is not shared experience but shared disenchantment. Young people, like many of the strikers, have been particularly badly served by the status quo.

Many young people supported Corbyn for the same reason. And there are other similarities between the two movements. Former Corbyn advisers such as James Schneider, Corbyn himself, and the parliamentary Labour left all support the strikers. Green activists, once an important part of Corbyn’s coalition, have joined RMT picket lines. Like Labour’s 2017 election manifesto, Lynch uses clear, populist language – “every worker in Britain” should get a much better pay deal, he told Question Time – and its effectiveness has taken the media by surprise. Support for the RMT strike rose after his TV appearances.

Could the strikers succeed, not just in getting fairer pay deals but in beginning to change how the economy works? It’s an immense task, which Labour under Corbyn sometimes talked about compellingly but never came close to carrying out. And as the strikes widen and lengthen, public opinion may turn against them. Walking to work because of a train strike will seem less of a novelty and more of an imposition if that dispute drags on into the autumn. One of the obvious but often forgotten lessons of the winter of discontent is that voters often hate strikes in cold weather.

Excited union talk about building new mass movements has proved over-optimistic in the past, for example during David Cameron’s government. The proportion of British employees who are union members has stabilised in recent years, after decades of decline, but by historic standards it is still low: less than one in four. And the fact that Starmer is not prepared to support the strikers removes one of the main means by which their campaigns could be amplified.

Yet for almost a decade now, British politics has not followed the expected paths. It may be that an economy built on poor wages was politically and socially sustainable only while inflation stayed low. That relatively stable and docile era may be over. Recently, the leftwing website Left Foot Forward listed some of the pay rises already won this summer by the increasingly assertive trade union Unite: “300 workers at Gatwick get 21 per cent”, “300 HGV drivers win 20 per cent”. In post-Thatcher Britain, such transfers of wealth to the workers – not just matching but far exceeding the rate of inflation – aren’t supposed to happen. But they are.

Unlike in the 1980s, when the iron lady beat Britain’s last big wave of strikes, unemployment is low and the supply of labour is short. If strikers don’t like a pay offer, sometimes they can threaten to go and work for someone who pays more. You could call it an example of something the Tories talk less about these days: market forces.

"India is not in a good place"

 

Russian History = From Communism to Gangster Capitalism

 

The Problem is Free Trade not Free Movement

Ian Allinson in The Guardian


While freedom of movement has been a hot topic since the debates around Brexit began, few would have predicted it would become such a focus in the Unite general secretary election, in which I’m standing.

Anger around jobs and conditions is justified, but often misdirected. Neoliberal capitalism has been disastrous. Free trade deals enshrine the rights of capital while ignoring the needs of humans and our warming planet. Workers have been dumped out of jobs by the million, work has intensified, workers feel more vulnerable to managerial whim, the share of wealth going to wages has fallen, welfare systems have been slashed and huge areas of life – including education, health and housing – are increasingly commoditised, all while our limited democracy is increasingly hollowed out.

Migrants are prime scapegoats for many politicians and media. Some employers provide fertile material for racists and nationalists. Fujitsu, my own employer, proposes to cut 1,800 UK jobs, hoping to boost profits by offshoring jobs to low-paid countries. Fujitsu is even asking some workers to train their replacements, brought to the UK to learn the job. Workers are being asked to dig their own graves.

When our livelihoods are threatened, workers sometimes respond by claiming privileged access to jobs, housing, and so on, and excluding others on the basis of gender, race or nationality. This is tempting because it sometimes “works” for some people for a short time. But it is misguided. If some workers try to protect their interests at the expense of others, the unity we need to win is undermined and we all lose.

Gerard Coyne is also standing for the general secretary post and his silence on this question, as on so many others, is deafening; meanwhile his relationships with the Labour right are worrying.

Len McCluskey, the present general secretary, though anti-racist, has fudged on workers’ freedom of movement, wrongly conceding ground to racists and nationalists. Just before the EU referendum McCluskey referred to it as an experiment at UK workers’ expense. As a delegate to the Unite conference shortly after the referendum, I moved a motion defending freedom of movement. Unite’s leadership opposed it, with their own motion calling for debate on the question. McCluskey now boasts that he has led this debate “demanding safeguards for workers, communities and industries affected by migration policy driven by greedy bosses”. Beyond dog-whistle politics, what does this mean?

McCluskey explained in a speech for the thinktank Class (Centre for Labour and Social Studies) that his “proposal is that any employer wishing to recruit labour abroad can only do so if they are either covered by a proper trade union agreement, or by sectoral collective bargaining”. All jobs should be covered by union agreements, but union weakness means most are not, and this applies especially to industries in which migrants have to work.

What would McCluskey’s proposal mean in practice? What would count as recruiting abroad? How long would a worker have to be in the UK before they could apply for an un-unionised job?

Giving different rights to different workers based on their nationality is discriminatory and divisive. It undermines solidarity. Blocking employers hiring on the basis of nationality would repeat the mistake of some trade unionists of a previous generation who sought to control the labour supply by excluding women from some jobs, fearing “they” would push down “our” wages. We, Unite’s membership, like the working class as a whole, come from all over the world. This is a strength, not a weakness.

It is free trade, not free movement of people, that has been a disaster for working-class people. Manufacturing has seen colossal job losses in recent decades as production has moved to countries in the south and east. Too often unions have responded by making common cause with the very employers sacking their members, against the foreign competition.

This approach has failed to protect jobs. Whether it is an employer threatening to dismiss and re-engage the same workers on lower pay (like the Durham teaching assistants), replacing workers with cheaper ones in the same workplace, or moving the jobs halfway round the world, workers are right to fight the degradation of employment. You can’t do that in partnership with the employer who is sacking you.

Thankfully workers are not always paralysed by the confusion of their leaders. Unite members at Capita and Prudential won important victories against offshoring. Members at the Fawley oil refinery spurned British Jobs For British Workers slogans and built solidarity to win equal pay for workers of all nationalities instead of trying to restrict the employment of migrants. Inspired by the Prudential win, industrial action in my own workplace currently includes refusal to cooperate with projects to move work offshore.

Unions should be following Fawley workers in demanding everyone is paid the rate for the job, regardless of employer, employment status, or nationality. We should be demanding full pay transparency, monitored by the unions. We should be calling for all jobs to be openly advertised, with no discrimination in hiring based on nationality. And existing workers should refuse to cooperate with handing over work unless their employment is assured.

The labour movement needs to regain the confidence to demand solutions that meet human needs, even when that upsets big business. We won’t do that by turning workers against each other on nationalist grounds, or by fudging the issue.

No general secretary candidate should chase votes by undermining the unity members need to defend their jobs. I am calling on Len McCluskey and Gerard Coyne to join me in championing workers’ rights to move freely (not just within the EU) and opposing any employment restrictions based on nationality.

Southern is a story of rail failure. But the real agenda is to crush the unions

This is the most farcical privatisation even by the comedic standards of British railways – and the aim is to defeat one of the last holdouts of organised labour

 

Illustration by Nate Kitch


 Aditya Chakrabortty in The Guardian


You work in an office, study at a further education college, want to visit your nan in her care home. Whoever you are, wherever you go, you rely on the trains to take you there. Except you can’t rely on them – not at all.

The only thing predictable about the service is that it’s always awful: the train you want is odds-on to be late or cancelled. If the next one is running, it’s so crammed you can’t get on. Every commute brims over with aggro. Wedged in overcrowded carriages, fellow passengers suffer panic attacks. The local newspaper reports how other commuters have missed work so often, they’ve lost their job; how students have missed exams or holidaymakers haven’t made flights.

Rail minister resigns as Southern commuter chaos continues



You read about a single mother forced to give up being a lawyer in London because dodgy trains mean she can never get home to put her son to bed. And you and everyone else are paying thousands each year for this shambles. To stand for dozens of miles and have extra hours, needless anxiety and gratuitous misery added on to your daily commutes.

If any of this sounds like you then my commiserations – for you are obviously a Southern Railway passenger.

At any other time, this summer’s chaos on the trains would have dominated the front pages. Even amid the turbulence of Brexit, it is still producing political ructions as big as the 50-foot hole that opened up under a south London track yesterday. This month, the transport select committee held an emergency sessionto find out why the service is in meltdown. Last week MPs staged an urgent debate in Westminster Hall, where they laid into Southern as a “joke”, “awful”, “terrible” and “rubbish”. Then they lambasted the government.

In turn, Claire Perry admitted she was “ashamed to be the rail minister”, but vowed to try to fix the situation “until I am kicked out”. The very next evening she quit. The new transport secretary, Chris Grayling, spent Monday hurriedly holding meetings on Southern, which is “top of [his] priority list”.

Britain is hardly short of political crises at the moment, but Southern surely counts as one. In an era of private-sector failure, this is one of the most extensive. Consider: Southern runs among the most economically important train services in the country. It manages 156 stations, covers 414 miles of track, and is responsible for around 600,000 journeys each day.

And it’s part of the largest train franchise in Britain, Govia Thameslink. Also known as GTR – majority owned by the Go Ahead group – it ferries commuters from across the south coast into London Bridge and Victoria. It takes tourists and business travellers to Gatwick and Luton airports. Its empire stretches from Peterborough to Tonbridge to Bognor Regis and Brighton. In a country that has, stupidly, bet everything on London, GTR is utterly crucial to the national economy.

And it does an appalling job. It cancels more trains than all the other rail firms in Britain put together. It boasts the worst record on significant lateness. It is the worst performing train operator of the lot. And it shows little sign of improving.

Its response last week to the cancellation of so many Southern trains was to issue a new timetable, removing one in six of its trains. Of all the oddities thrown up by rail privatisation, this must rank among the oddest: a train company in the business of running fewer trains.

Southern rail passengers protest at Victoria station, London, July 2016. Photograph: Matthew Chattle/Rex/Shutterstock

Perhaps the sheer stretch of GTR’s network is part of the problem, even though Perry claimed just two years ago that that would help it “deliver a step-change on key routes”. Running services into London Bridge during a botched overhaul hasn’t helped. And going by the evidence GTR has given to parliament, it also inherited investment-starved services. But GTR’s boss Charles Horton comes from failed franchise Connex. In his first interview in his current job, he advised passengers forced to stand to take a later or slower service. And with staff morale at rock bottom he has ended up in a huge clash with the unions.

Southern has been crippled by industrial action. Horton also regaled MPs with stories of “sick-note strikes”, although David Boyle – whose blogs on the Southern mess have become a must-read – has found no evidence to back that up. Boyle instead discovered that employees are so fed up they will no longer do voluntary overtime – leaving the company with too few staff for its advertised services.

But the fundamental problem must be the most farcical privatisation even by the comedic standards of British railways. Because this is privatisation in name only. GTR is paid billions by the government – which then takes their ticket receipts and even refunds customers if the trains are delayed. This makes it unlike any other train company in Britain – and gives GTR no incentive to attract more customers or to stop annoying them. In effect, Horton and his executives are government agents paid lavishly for failing to provide a service.

‘Southern cancels more trains than all the other rail firms in Britain put together.’ Photograph: Alicia Canter for the Guardian

We have a transport company that can’t really transport, and vast management fees paid to executives who clearly can’t manage. And the government acts as an apologist for a private company that’s meant to be providing a public service. Meanwhile, no apologies are forthcoming – in fact the boss of Go Ahead, David Brown, has just seen his annual pay soar above £2m, and the dividend payout to his shareholders has jumped to £37m. Someone is making a lot of money out of grotesque failure.

This is not just an issue for southern commuters, though – it’s a montage of everything wrong with business in Britain. Rather than strip GTR of its franchise, Tory ministers have instead made its conditions less onerous. Brown should be hauled in front of parliament to explain the chaos. Instead, he acts like an absentee landlord while officials at the Department for Transport say they couldn’t run the service as well as Southern does.

The question is why the government is going so easy on a failed train company. One answer comes from GTR’s dispute with the unions. The train firm wants to bring in driver-only trains, without guards to open and close the doors. The idea commands enthusiasm in Whitehall. It would certainly make rail management cheaper, if not safer.

But to strip trains of conductors requires the crushing of one of the last holdouts of organised labour. That’s not my extrapolation – it comes from DfT director Pete Wilkinson, who a few months ago told a public meeting, “We have got to break them [union members]. They have all borrowed money to buy cars and got credit cards. They can’t afford to spend too long on strike and I will push them into that place.”

Civil servants are supposed to be impartial, but this one wants to drive trade unions “out of my industry”. Mind you, Wilkinson has worked in Whitehall as well as in the City. He lives in Vienna but commutes to Britain. He’s a gamekeeper comfortable setting policy for the poachers. And he and his colleagues appear to be using Southern to take on the unions, in much the same way Thatcher used Ian MacGregor and the National Coal Board to break the miners.

An industrial dispute by proxy, a dysfunctional privatisation pushed by ideologues: our railways are in for an 80s revival for all the wrong reasons.

Bengaluru's silent majority - The underbelly of India’s silicon valley

T. M. VEERARAGHAV in The Hindu



Brewing discontent: “The garment workers have proved that there is a vast, angry India outside swanky offices.” The workers protest on Tumkur road in Bengaluru. — Photo: By Special Arrangement


What happened in Bengaluru this week has a lesson for every Indian city. It’s a warning that growing disparities must be addressed urgently.

They don’t work in cubicles and are not constantly on social media sites protesting against bad roads, traffic, power cuts or water shortage. They don’t grandstand on political ideologies and discuss India as a global power, for their realities are harshly local; it’s about everyday survival.

They are Dalits, Other Backward Classes (OBCs), some even from forward castes and different religions, but united by a common economic plight. And they proved they can come out in their thousands to protest, suddenly, without any concrete effort at mobilisation. When they did, they paralysed a city, one portrayed to the world as India’s silicon valley, its IT powerhouse.

What happened in Bengaluru this week has a lesson for every Indian city. There is a giant underbelly of disparity and discontent that exists and it can erupt, suddenly. It can challenge the myths of economic progress and images that governments have cautiously projected before the world. Images laced in terms like ‘investor confidence’ and ‘ease of doing business’.

A spontaneous peoples’ protest

There is still an air of confusion over how protests by garment factory workers erupted and galvanised, which crippled normal life in Bengaluru for two days and turning ‘extremely violent’ by the city’s standards. It started at one factory, where photocopies of a newspaper report stating that workers cannot withdraw employer’s contribution to their provident fund (PF) till 58 years of age were circulated. A rage erupted, and workers, predominantly women, took to the roads in what was described by the police force as a “flash strike” on Monday.

Word spread like wildfire to other garment factories in the area: there are about 8-10 in the cluster. In under an hour, workers from all the factories poured out, paralysing Hosur Road. Ironically, the road is the arterial highway that leads to Electronics City, which houses campuses of several IT majors and is the showcase for a new India or ‘surging economy’.

No high-tech device could have predicted the event or how it would galvanise the next day. Garment factory workers in several other parts of the city, again where factories exist in clusters, came out to the streets. Corporate offices and police stations were attacked, buses set on fire and roads blocked for hours.

Trade union leaders were clueless — they were planning a protest, but no one anticipated a sudden burst of anger, of this nature. The police were equally clueless, as one officer was reported as saying, “When we wanted to talk to their leader, they were clueless and so were we.” This protest had no one leader or negotiator for demands, it was a sudden burst of pent-up anger, triggered by the new PF ‘reform’.

These factories exist in clusters and hence workers in garment manufacturing units could mobilise themselves instantly. There are an estimated 5,00,000 people working in garment factories in the city. Predominantly women (estimated to be around 85 per cent) and for them, usually with salaries of around Rs. 6,500 a month, the few hundred rupees they save as PF is the only social security.

Symptom of a larger angst

This is where the crux of the issue lies. The PF law was just a trigger and the garment industry is just one small section. As we build and showcase a new economy, there is little forward movement in ensuring social security for the millions in the lower-to-middle income groups.

For instance, quality health care and education remain a pipe dream, and survival in a ‘booming economy’ is a daily battle. Unionisation is restricted in garment units and hence workers have little or no grievance-redressal mechanism or collective bargaining. Against this backdrop, amendments to labour laws proposed for enactment in Karnataka, like in many other States, increase work hours for workers and arguably shifts the balance in favour of factory owners.

Such policies have ensured that even a basic level of trust in the system is eroded. In this situation, when savings like PF, which for decades the working class in India has taken as the ultimate security, can become inaccessible at a time of need, it shakes the workers’ faith completely. It’s not anger but desperation to save the little they have.

To date, Union governments have been extremely cautious in even altering PF interest rates. Did the illusion that India has changed allow the Centre to try changing PF laws?

It is important to address the difference in the way PF is looked at by those surging with a booming corporate economy and workers, like those in garment factories — PF is not the only saving mechanism for the young manager or techie, for many it’s just a mandatory contribution that one has to make.

The garment workers have proved that there is a vast, angry India outside swanky offices. And their protest is a strong message to the government and the ‘booming economy’ not to tamper with the little they have. Elections in States, including Kerala and West Bengal where the Left has a strong presence, may have ensured immediate withdrawal of the controversial PF rule by the Union government, but the real test is to see whether the intent will be to understand the concerns of the labour and lower income classes.

It’s time to focus on building systems and policies that offer them a larger stake in economic and social progress. The PF law was just a trigger to one set of a large population that works in semi-organised industries. And there are millions, like taxi drivers and construction labourers, who do not even have a shot at a provident fund. The trigger for each of these sections could be different, but their frustrations are the same and the impact they could have if they galvanise in protest could be enormous.

What Bengaluru witnessed is just a symptom, labour led by no union that had the potential to bring parts of a city to a standstill and forced the Union government to take note.

Abracadabra! Britain’s political elite has fooled us all again

Aditya Chakrabortty in The Guardian

Magicians call it misdirection: directing the attention of a crowd elsewhere so as to distract from the trick happening right in front of it. A bump on the shoulder, a blur of handwaving and – wham! – your wallet’s taken leave of your hip pocket.

Since the crash, British politics has been one epic act of misdirection. Lay off those bankers who shoved the country into penury! Just focus on stripping disabled people of their benefits. Never mind the millionaire bosses squeezing your pay! Spit instead at the minimum-wage migrant cleaners apparently making us poorer. So ingrained is the ritual that when a minister strides into view urging the need for “a grown-up debate”, we brace ourselves for another round of Blame the Victim. The only question is who gets sacrificed next: some ethnic minority, this family on low pay, that middle-aged dad who can’t get a job.

Here is how political misdirection works in real time. Yesterday, Unite’s Len McCluskey came under a barrage of criticism for suggesting that Labour live up to its name and support “ordinary working people”. Evil paymaster! Meanwhile, on the front page of this paper, digger firm JCB called on David Cameron to prepare to take Britain out of the EU – and this was just a company having its say.

JCB boss says EU exit could lift burden of bureaucracy on UK businesses

 

Read more

I hold no brief for McCluskey – but he is the democratically elected head of a trade union simply seeking to influence the party part-funded by his members. Perhaps this comes as news to some on Fleet Street, but the debate over Labour’s future is not the chew-toy solely of newspaper columnists. Moreover, Unite’s donations to Her Majesty’s Opposition are a matter of easily checkable record. Not so the money poured into Tory coffers by JCB, either as a business or from its owners, the Bamford family. To learn that, we must rely upon forensic researchers such as Stuart Wilks-Heeg at Liverpool University. He calculated this morning that, between 2001-14, the Bamfords and JCB had together given the Conservatives at least £6.7m. One arm of JCB also donated £600,000 last year to Tory campaigns in key marginals, including the all-important battleground of Nuneaton.

So a company that funded David Cameron all the way into Downing Street, and whose chairman was recently made a lord, seeks to influence the government on one of the most fundamental issues in British politics, something that affects all of us – and this is business as usual. Yet a workers’ elected representative adding his voice to the din of an internal party argument somehow represents the biggest political landgrab since a bloke with a goatee popped in to the Winter Palace.

Expect more of this misdirection over the next few weeks. Labour has scheduled the entire summer for its leadership campaign, which could equal months of an entire party sounding like an indecisive satnav: Veer right! Keep left! Meanwhile, in just over a month, George Osborne will lay out an emergency budget to deal with the enormous £90bn deficit that he inherited from himself. Using the traditional lexicon of political hocus-pocus – “hard choices” – he will begin making some of the extra £12bn of welfare cuts the Tories pledged at the last election.

Every feat of misdirection is always intended to distract the audience from a sleight of hand. The same goes in politics – only here it’s aimed at taking our minds off the fact that all this jiggery-pokery is actually making us worse off. Let me show you what I mean, using figures calculated for the Guardian by academics at the Centre for Research on Socio-Cultural Change (Cresc), using official data. When Thatcher moved into No 10, 28% of all working age households took more from the state in cash benefits, in health and education and all the rest of it than they paid back in taxes. In other words, more than one in four employers in Britain were failing to pay their staff’s way.

The next round of cuts will hit the working poor all over again, like a hammer to the face

More than three decades later, through Major and Blair and Brown and Cameron, that proportion has kept on rising. Now 38% of working-age households rely on taxpayers to pay their way. Think about all those tax credits for low-paid work, those exemptions for people earning too little even to be taxed. We have more people in work than ever before – and more households than ever before relying on the state to keep them afloat.

There’s nothing wrong with these people. These are the hard-working families politicians like talking about – the strivers, the squeezed middle, the alarm-clock Britain. But there’s a lot wrong with their employers – because they now rely on taxpayers to top up poverty pay, even while insisting on cuts in corporation tax and grants for investment. Come 8 July, it won’t be those businesses that the chancellor tells to change their ways – it’ll be the people they employ who will see more money taken out of their weekly budget by the cuts. Because the one thing we know about the next round of cuts is that they will hit the working poor all over again, like a hammer to the face.

This is what politics looks like in Britain nowadays, once the newspapers have their japes and the politicians leave the TV studios: it is about justifying an extractive business class that wants to lean on taxpayers to pay their way, even while lecturing the rest of us about welfare dependency. And it doesn’t change all that much whether the Tories or Labour are in Downing Street. The Cresc team looked at who reaped the rewards from growth over the past three decades. Under Thatcher and Major, the top 10% of all working-age households took 29p in every £1 of income growth. Under Blair and Brown, their share actually went up, to 30p in each £1. Cresc found that New Labour bumped up the share of the poorest economically active households from 0.5% to 1.5%. Taxes and benefits evened that up a bit – the same taxes and benefits that are now deemed unaffordable. So much for trickle down.

This is what all the misdirection has been about: taking our minds off the fact that Britain is a soft touch for businesses that want taxpayers to pay their way, and politicians who count on the middle classes to feel richer, not through their wage packets, but by their house prices, their no-frills flights, their luxury buys from Lidl. What a trick has been pulled on Britain by its political and business elite: never have so many people had their pockets picked at the same time.

The age of player power

Players, emboldened by free agency, agents and endorsements, are now asserting their rights as never before - and management doesn't like it

Rob Steen in Cricinfo

October 29, 2014

  

Michael Holding is among those who feel the West Indies players have been cast in the role of sinners in the latest saga © BCCI

Big hitter wanted. Must be comfortable handling money, schmoozing Australian media magnates, worshipping at the Church of Broadcasting on an hourly basis, maintaining an unholy trinity of power, changing course at the drop of a hat, staging events that lack context or go on too long, and treating the talent like worker ants (which of course they are). Imagination, a working set of principles and a capacity to think more than five minutes ahead nice but not essential. Cricketing experience would also be nice, but ex-professionals need not apply. Did we stress "no women" enough? All right then, NO WOMEN.

The "Positions Vacant" column at ICC Towers or BCCI HQ could never adopt that precise wording, of course. The sentiments, nonetheless, wouldn't be terribly different, not in essence. Perhaps the fondest and most self-deluding perception we cricket fanciers suffer from is the idea that, as a species, the game's administrators have the game at heart. Or anywhere remotely near it.

This is why a globally respected former player told me last week, after I'd urged him, for the good of the game, to put on his best suit and apply for his mandarin's licence, that he would just as soon buy a return flight to the sun, or even a lifetime's subscription to the Sun. This is also the fundamental reason why cricket in the Caribbean has just been dumped into what may well prove to be the deepest, muddiest, smelliest bogthis grand old game of ours has ever had the nose-holding, arm's-length displeasure to behold.

As Michael Holding related in his column for Wisden India, the roots of the duel between Dwayne Bravo et al and the West Indies Cricket Board lie in the latter's quest for revenge on the uppity West Indies Players' Association. And not over the shenanigans of Chris Gayle or Sunil Narine - or at least, not directly - but over the insistence that the board honour a pay rise to the players approved by its former CEO, Dr Ernest Hilaire.

To be fair, the CEO had been "conned" - as Holding put it - into sending the incriminating email by Dinanath Ramnarine, the former WIPA president and chief executive (indeed, Holding took a current WIPA official out for dinner and made no bones about his anger at such a shameless stunt). That, though, was scant consolation to Hilaire, or the WICB.

There can be little question, given its lamentable track record in player relations - a track record that has made the WIPA one of the most militant players' unions anywhere - that the WICB deserves public humiliation. And public humiliation can propel even the most intelligent and far-seeing fellows to the most asinine of reactions. Trouble is, when it comes to cricket officials - or, for that matter, officials of any sporting, showbiz or political creed - presumptions of intelligence and foresight may be unduly kind.

Holding, it should be added, has never been a rabid advocate of players' rights. That underlying ambivalence - towards the WICB as well as his on-field successors - has been easy to understand. To someone such as him, a Jamaican for whom playing for West Indies meant something more than representing a region, the ever-rising emphasis on financial reward can at times seem odious. When he was skittling all those England batsmen at The Oval in 1976, Holding will assure you, a win bonus or enhanced contract was an additional, minor incentive, not a cause. The revolution he was fighting, though, has been more or less won; now another needs winning.

That's why Holding has been unable to contain his fury, taking up cudgels on behalf of players who he feels (and not without extremely good reason) have been shat upon from a considerable height and cast, inevitably, as scapegoats. That the owner of the calmest, coolest, unshrillest voice in the menagerie we call the commentary box should feel compelled to raise it to such a pitch should not, cannot, be dismissed lightly.

That Bravo et al cannot even trust their own union rep, Wavell Hinds, ironically a long-time friend of Bravo's as well as a pal of Dave Cameron, the WICB president, emphasises how toxic things have got. Likewise Marlon Samuels' non-solidarity.

****

One of the under-appreciated benefits of the IPL is that it has empowered the players. Now, finally, the wealthy (and not undeserving) few have a shot at controlling their own destinies, free of club or board interference. This has also led down a bumpy road to a spooky place, a place where national teams, for so long the focus and pinnacle of attention, no longer call all the shots, where the highest levels of the game are merely the hors d'oeuvres, net practice for those whose appetites extend to all-you-can-eat feasts in Mumbai and Kolkata.

Nonetheless, amid all this frantic and often confusing relocation of the goalposts, Bravo and company were still willing to take a pay cut if it meant benefiting those labouring on the lower half of their greasy, treacherous pole. How many of us, in our own jobs, would do likewise? Granted, exceedingly few of us earn anything like as much as Bravo or Gayle (or even Jason Holder), but how many bankers or surgeons are queuing up to take a pay cut to help clerks or nurses? Generosity is generosity. For that, surely, these rebels warrant our admiration rather than opprobrium.

That the WICB appears so eager to paint a diametrically opposed picture testifies to its members' desperation to maintain control at any cost to credibility. Before the forceful Ramnarine resigned in 2012, the board refused point blank to deal with him. Garth Wattley summed up the board's approach to the WIPA as "a mixture of conciliation, intransigence, and more often of late, arrogance".

	That Michael Holding, the owner of the calmest, coolest voice in the menagerie we call the commentary box should feel compelled to raise it to such a pitch should not be dismissed lightly

Once upon a time, at the risk of tooting my own horn, I was party to a similar collective effort to aid less fortunate colleagues. When Robert Maxwell suddenly closed the London Daily News in 1987, after the bouncing Czech had lured scores of journalists from safe jobs to launch the paper just five months earlier, those of us who had been on board from the start voted to take a 50% cut in our severance pay. We decided on this course in order to ensure that the latest appointees, who had left their previous publications but had yet to report for duty at the LDN (of whom there were a fair number), could be compensated. It didn't help them enormously but I like to think they appreciated the gesture. On the other hand, I was single and childless at the time; I'm not at all sure I would have backed such a vote 20 years later.

But let's not get distracted. The bottom line could not be clearer. In the centuries-old struggle between management and players, across all major professional sports, the workers, emboldened by free agency, agents and endorsements, are now asserting their rights as never before - and management doesn't like it one eensy-weensy bit. Particularly not when it breeds season-shortening strikes (witness Major League Baseball in the mid-1990s), let alone season-nullifying strikes (witness the National Hockey League in 2004-05). The abrupt cessation of activities in an ODI series, barely a month after FICA, the international brotherhood, welcomed the signing of a collective bargaining agreement between the WICB and the WIPA, is merely another small landmark on the long, steep, rocky climb to respect.

Nothing proclaims the extent to which the tables have turned over the past half-century than a remarkable statistic from the winter of 2012-13: for the first time since Major League Baseball owners consented to salary and contract arbitration in 1974, not one of the 133 players took his claim as far as a hearing, the upshot of the clubs' increasing willingness to sign younger players to multi-year deals, affording even non-stars a degree of security. Unfortunately West Indies cricket is neither wallowing in record attendances nor benefitting from equitable revenue-sharing.

The funny thing about all this - as in funny-peculiar rather than funny-ha-ha - is that this latest downing of tools should happen in India, where resistance to players' unions, among the players themselves, has been fiercest. For all the vicissitudes of the BCCI, the fact that Sachin, Rahul and Anil never felt much, if any need, to form one says a great deal about their contracts, but must also say something at least faintly complimentary about N Srinivasan and his posse.

By the same token, the reality is unavoidable: without Indian support FICA will remain toothless. Fearless as the WIPA is, the day that MS Dhoni and/or Virat Kohli declare public solidarity with their brothers in charms is the day the WICB, Sri Lanka Cricket and their ilk start pondering the wisdom of their conniving and bullying. Only then will professional cricketers truly feel that the pendulum has swung as far as it needs to swing.

It takes two to tango, but it takes a lot more to stop a rot.