The European Union, in pursuit of an austerity agenda supported only by the elite, has now effectively suspended democracy in two European countries. We have now, within the space of a week, entered the age of the Technocrat government (described brilliantly by one writer in The Times as ‘a form of civilian junta’). It is unclear when this new era will be behind us.

Yesterday’s Independent provided an excellent and very worrying analysis of the extent to which Europe’s technocratic elite are almost a subsidiary of Goldman Sachs, providing yet more evidence – as if we needed more – that the austerity project is being carried out for the benefit of financial institutions. (“The [Goldman Sachs] Project is to create such a deep exchange of people and ideas and money that it is impossible to tell the difference between the public interest and the Goldman Sachs interest.” Read the full thing here: http://ind.pn/snfaQ7).

This is not simply an attack on democracy in the form of the suspension of the democratic process, but the destruction of any relationship between public opinion and government policy. The concerns of Europe’s citizenry – mass unemployment, public services, pensions etc. – will not be addressed until Europe’s financial interests start to share these worries, an unlikely contingency.

What I want to ask is: why is support for this institution still considered progressive? It doesn’t matter that many of the arguments against the European project are often cogent, reasonable and progressive; there remains a nagging feeling that its still all a bit too UKIP. The assumption remains that to be pro-Europe is to be a good progressive type with the correct opinions, whereas to oppose the EU makes you a reactionary Little Englander.

This makes little sense when you look at the politics of other European countries in which the assumptions are the exact opposite. Both Sarkozy and Merkel represent the main conservative parties in their respective countries. In Scandinavia, the tradition has always been protecting the institutions of social democracy from encroachment by Brussels. It is almost as if our politics concerning Europe are the wrong way around.

The case used to be made that even before we begin to argue about fishing quotas, butter mountains, sovereignty or the CAP, we had to concede that the European Union has been a bastion of peace and stability for the continent after the horrors of the Second World War. It is an argument with which I had much sympathy. But is it not now perfectly clear that the European elite, by bypassing democracy and condemning millions of European workers to years of austerity, threatens that very stability? The EU may once have protected peace in the continent – it is now its principal threat.

Last week’s seminar at the Frontline Club asked a very pertinent question of the Occupy London movement pitched outside St. Paul’s. What do you want? I was surprised to see from the show of journalistic hands that the majority in the room did not know exactly what the protesters are camped out for, though, given the lineup of speakers included accountant turned campaigner Richard Murphy and Julian Assange, fresh from court after losing his extradition appeal earlier that day, it was less surprising that the majority supported their broad aims.

Self-confessed occupy sceptic, Harry Cole, one of only two voices of dissent on the panel, accused the protesters of possessing an overwhelming mismatch of ideas.

“If you’ve got a movement that is calling for a realignment of capitalism, having speeches about climate change and Kurds within the space of 10 minutes, it’s not working,” Cole said.

More baffling opposition came from Daniel Ben-Ami, who described himself as of the left, but lost me when he called the protesters a deeply conservative movement loved by the establishment.

It fell to Murphy to give the most passionate defence of the movement, offering a rare charisma I had thought was bred out of accountants at playschool.

“The message from Occupy is you guys have got it wrong,” Murphy said. “After 30 years of neo-liberalism, which has actually suited both left and right in many ways, we end up with a social movement which is actually saying hang on a minute, what this is about is creating a geography of dissent. A space where people can say we are looking for alternatives ideas because our right to dissent, our right to even think has been crushed.”

“Yes it’s messy, but so is reality,” Murphy added.

Assange, confessing he had “had a bit of a busy day”, played up the importance of new forms of media and criticised the role of the mainstream press as the reason movements like Occupy were not in place five years ago.

“We now have ways to bypass the mainstream press,” said Assange, whose own means of bypassing the mainstream press, Wikileaks, has already helped topple governments, “pouring oil on the fire” that fuelled the Arab Spring.

From the speeches, particularly that of activist Naomi Colvin, and from contributions from the floor, it was clear that Occupy, despite the disparate groups that came together to form it, knows what it wants. A stand against cuts and tax avoidance and for the reform of a broken capitalism; a stand for the world’s poorest against the excesses of the world’s richest.

After my lunch breaks spent at the camp and marching on Westminster, swapping caps between journalist and protester, I find it hard to see why anyone could accuse the movement, messy and messianic as it is, of not knowing what it wants. They are persistent in their cause and assured of their politics – turning on, tuning in and dropping out in true radical spirit – and in that I can only wholeheartedly support them.

Equally, when Colvin talked of government not working in the interests of the general population and of her concern with financial services out of control, I found it hard to disagree. What worries me slightly, however, is the tendency of some protesters to link the movement to the Arab Spring.

“It’s one manifestation of a global emancipation movement that began with Egypt and Tunisia,” said Colvin.

Those make for stirring words, powerful, pretty, but also pretentious. It’s a pretention exemplified for all to see in the sign sitting opposite St. Paul’s reading ‘Tahrir Square EC4M’.

I can see what Occupy is trying to do and in showing solidarity with the people of Egypt, Tunisia, Libya and the millions oppressed across the Arab world yearning for freedom from the yoke of dictatorship, they have a noble cause.

But where are the bullets and the cavalry charges? Where are the arrests, the beatings and the killings? I do not envy the Occupy protesters shivering in tents towards Christmas. But Paternoster Square is not Tahrir Square and they are not putting their lives on the line trying to get into it. I’m sure no one in the camp means to belittle the struggle for democracy in the Middle East, or lay claim to a struggle as dangerous, but as destructive and exploitative as modern capitalism is, as immiserating as its failings have been for the most vulnerable people in this country, the Arabs paid in blood for their emancipation, while the St. Paul’s protesters have been given a protected space by state and church – at least until the new year – in which to air their rightful grievances. To forget that, or to elevate a lengthy unseasonal politically charged festival to the status of a fundamental struggle against a sovereign that is trying to destroy you for speaking out against it, smacks of pretention.

That said, what they have done, in creating a space for discussion and democracy, linked with movements across the world, with a clear sense of what they are for and who they are against, is create a powerful symbol that politicians cannot afford to ignore.

As Sun Tzu famously wrote, “if know your enemies and know yourself, you can win a hundred battles”. I suspect there will be more than a hundred battles ahead. Capitalism will not be over by Christmas and the camp may be gone by Easter. But the Occupy movement has tapped into a mood that stretches much further than a few hundred tents outside a famous London landmark. And, if indeed they do this once speak for the 99%, then that mood is not going away anytime soon.

Last night, the American House of Representatives passed legislation to raise the debt ceiling and heavily cut public spending – a historic move if you take into account the first has never been conditional on the latter. Today, the Senate unsurprisingly passed it.

This trimming of the budget was inevitable considering the normalisation of neoliberal policies. Horrendous facts and figures regarding the extent of the cuts aside, the focus is on negotiations which took place and the ideological victory won by the Republicans and their Tea Party offshoot who succeeded in their desire to see no tax increases. The Democrats were evenly split in House votes (95 for and 95 against), whereas the Republicans were heavily in favour of the bill (174 for and 66 against).

Talk of a compromise being made flatters to deceive, with even staunch Obama supporters disillusioned by this legislation. Obama’s posturing has been to attract support from the centre of his party and the independents who are worrying about the deficit and its relationship between Wall Street investment for Main Street businesses and services. However, this will not wash when imagining the destruction of public services, social security and education. If people don’t have these things, they can’t get to work, won’t be qualified to work, and won’t be able to afford the rising costs of living in urban towns and cities.

Its easy to say Obama isn’t to blame; that he’s held in thrall to corporate interests and a Republican majority in Congress. However, it is easy to say he is to blame too. It is foolish for anyone to think he has failed because no one person should ever have that much responsibility or power anyway. The criticism will always be easy if it is about him. I am not taking anything away from his agency as president here, but we must not forget the words being whispered into Reagan’s ear to “hurry up” by Don Regan , his policy man, during a speech, or Clinton and the continuation of the Washington Consensus, or Bush Jr. and both the recent invasions. These men, while being the public faces of the problem, deflect away from a festering undergrowth of corruption, corporate collusion, nepotism and class warfare perpetrated by those who wish to maintain the status quo, their own corporate welfare, and social immobility.

Commentators have suggested this outcome is a severe weakening of Obama’s already lacklustre authority and maybe even his re-election chances, but this is all too simplistic and linear. Americans love a narrative, preferably with a soundtrack, of individuals with ideals battling their nemeses and prevailing for the ambiguously greater good.

It is popcorn politics the American mainstream media try and peddle, and it is the American public who start feeling powerless and apathetic because of it.

While austerity will be pushed onto us here and we will fight it tooth and nail, it is the Americans I wish to see rally and fight this new bill once it is enforced. If a large scale movement can be built with the support and enthusiasm the “Save Our Schools” campaign has recently generated there, there will be huge protests in all the major cities in the U.S, which will in turn reverberate around the developed world.

It has been said capitalism would destroy itself for a profit. We may be witnessing the beginnings of America’s implosion. After all, as we’ve seen with Spain’s “Indignados”, a movement which has been virtually ignored as of late despite daily protests and demonstrations held by thousands, “No es la crisis, es el sistema” (its not the crisis, its the system) must come to mind.

I think, or rather hope, more Americans act on the realisation that it is not Obama who they are now feeling increasingly alienated from, but the sacred system which both major parties defend and maintain with very little deviation.

A version of this article was first published in International Tax Review

Bongo players, Robin Hood, men dressed as drag dinner ladies and Mrs Doyle from Father Ted proclaiming the only tea she does not like is poverty greeted activists as they filed into Westminster Central Hall to lobby their MPs. But behind the fun and frolics of Tea Time for Change, organised by seven of the UK’s leading development agencies, was a serious message. The government must act to shore up aid, crack down on tax avoidance and push for a Robin Hood tax on financial transactions to help the world’s poorest people.

Tax justice

“It’s a scandal every day that 850 million people are going hungry,” said Chris Bain, director of CAFOD, which helped organise the event. “But aid alone won’t enable us to end global poverty. Developing countries need sustainability.”

It is for this reason that tax was such a central focus of the event, which attracted 131 MPs, and activists welcomed International Development Secretary Andrew Mitchell’s positive words on the subject.

“Everyone should pay their taxes due,” said Mitchell. “We champion transparency.”

Mitchell told the audience that the government is working in Rwanda and the occupied Palestinian territories to help them build the capacity necessary to ensure companies are not avoiding taxes.

Mitchell’s opposition counterpart, Harriet Harman, was even more forceful in talking about the role of multinational companies in development, pointing out that developing countries lose more through tax avoidance than they receive in aid.

“Many developing countries are rich in natural resources – in oil, diamonds, and precious metals – but their people go hungry,” Harman said. “Businesses can play a major part in helping development. But they can also be an ugly force for exploitation – the unacceptable face of global capitalism.”

Harman urged the government to act to ensure companies play their part in development and backed the Publish what you Pay campaign.

“We want the government to require companies to show what they pay in the developing world – country by country,” said Harman. “So that the world can see whether the relationship between a multibillion dollar multinational and a poor country is fair. And so that the people in that country can see that too – and hold their leaders to account.”

Chris Jordan, an economic justice campaigner at ActionAid, one of the charities behind the event, welcomed the government accepting the principle of transparency in the extractive sector, but argued that it should be wider.

“The government needs to take tangible steps before the G20, there’s no reason why transparency shouldn’t apply to all sectors,” Jordan told International Tax Review.

Financial transactions tax

Mitchell was positive on the possibility of a FTT and he stressed that using revenue from a new tax to finance development goals would not replace Britain’s commitment to spending 0.7% of its national income on aid.

“The Treasury is warm to this approach and it is looking at means to raise additional income,” Mitchell said, pointing to the report Bill Gates is preparing for French President Nicolas Sarkozy on financing for development. “We are looking at all the ways.”

Harman also supported taxing the financial sector to fund development.

“We back the demand that within Europe, in the G8 and in the G20, the Prime Minister leads on how we make the financial sector play its part in extra finance for development to tackle global poverty and climate change,” said Harman.

Campaigners were encouraged by the arguments heard from the government and the opposition.

“We welcome that the government is warming to a Robin Hood tax,” said Jordan. “We want to see those warm words turned into a commitment. Lots of the technical work has already been done, there’s no reason to delay.”

The benefits of a FTT for development, given its ability to raise large amounts of revenue with a tiny rate because of the breadth of the tax base, are obvious. So too are the difficulties. The European Commission, while giving its support to the FTT, said that it is something that needs to be implemented on a global level.

“It’s going to be most effective if it’s international, but there’s no reason why countries can’t go it alone,” said Jordan. “The concept is feasible, we already have a share transactions tax in the UK.”

The mood on the day was upbeat, with more than 1000 activists clearly excited to be drinking tea with their MPs and talking to them about tax and development. And despite the levity of the event, personified by Spitting Image comedian Jan Ravens impersonations of Sarah Palin – “When I heard there was a tea party I just had to come” – no one was in any doubt as to the gravity of the issues as the charities prepare to step up their campaign ahead of the G20 meeting in November.

“I want to share an African proverb because to me it sums up why you are here,” said Adwoa Kwateng-Kluvitse, country director for ActionAid Ghana. “When spiders webs unite they can tie up a lion.”

Vince Cable, the Business Secretary, has just provided yet more evidence that he is, in fact, an odious little shit. In a speech to a union conference, he warned that if widespread public sector strikes take place (which seems likely), the government would enact new anti-strike legislation. This is part of the speech obtained by the Guardian before the conference:

“We are undoubtedly entering a difficult period. Cool heads will be required all round. Despite occasional blips, I know that strike levels remain historically low, especially in the private sector. On that basis, and assuming this pattern continues, the case for changing strike law is not compelling,”

“However, should the position change, and should strikes impose serious damage to our economic and social fabric, the pressure on us to act would ratchet up. That is something which both you, and certainly I, would wish to avoid.” (Here: http://bit.ly/jecJFc).

What’s really amazing about this rubbish is the fact that this is regarded a fantastically clever move by the Business Secretary at this tense moment in negotiations. From the Guardian, again:

A business department source insisted that Cable was issuing a “subtle” message to the unions. “We hope the unions will see this as quite comforting that the secretary of state says there is no case at the moment. But at the same time if circumstances change, the government’s position will change,” the source said.

This is the language of the mafia thug. (“Nice labour movement you got here. Shame if something happened to it…”)

If the government cared, actually gave a shit, about avoiding recession and saving thousands from destitution, the message to the unions would be very different.

It is becoming increasingly clear that the economy cannot recovery properly without a policy of wealth redistribution. Increasing inequality and stagnating wages have destroyed real affluence in this country, and it’s hard to see how effective demand will be able to recover when what little wealth the country now produces goes increasingly to the top of the income scale, where it sits and does nothing. The unions are the force in society best suited to tackle this. On the economic front, stronger collective bargaining power will ensure that the benefits of economic growth are enjoyed more widely, increasing the spending power of ordinary people; on the political side, the unions can articulate an alternative to austerity economics(something Labour has failed to do).

The UK needs more strikes: they’re good for the economy.

“There is nothing necessarily dignified about manual labour at all, and most of it is absolutely degrading…To sweep a slushy crossing for eight hours on a day when the east wind is blowing is a disgusting occupation. To sweep it with mental, moral, or physical dignity seems to me to be impossible. To sweep it with joy would be appalling. Man is made for something better than disturbing dirt.” – Oscar Wilde, The Soul of Man under Socialism (1891)

This story should have got much more attention than it did:

Researchers at Australian National University have found that positions with low security, high demands, and imbalanced effort-reward ratios cause more mental distress than unemployment. Over seven years, the researchers followed 7,000 respondents in an Australian labor survey. People who moved from no employment to jobs of “high psychosocial quality” showed gains in mental health. But those who went from jobless to employed in thankless, unstable positions were found to be more depressed and anxious than those who never got hired at all.

The authors of the study conclude (a bit mildly) that their ”results suggest that employment strategies seeking to promote positive outcomes for unemployed individuals need to also take account of job design and workplace policy.”

Anyone who has studied some economic theory knows the long list of costs associated with unemployment (including the often dramatic psychological costs). Hence the general view that work is better than worklessness. But when was the last time somebody brought up the issue of the psychological costs of work in a discussion on benefits and unemployment? (Clearly the sorts of people on the dole for a great length of time are not very likely to ever have jobs of a “high psychosocial quality”.)

For the necessary dirty work to be carried out, our economic system requires a permanent underclass of underpaid, overworked and under-appreciated human beings, for whom the mind-bending boredom and squalor of long term unemployment would actually be an improvement in their lives. (This is often the kind of work, remember, that stops the sewers overflowing and keeps our rubbish from piling up and rotting in the sun.)

Findings like these should provide an opportunity to openly and frankly discuss capitalism’s sheer fucking barbarity. Maybe we could decide that our current division of labour needs to be replaced with something more humane; we could defend the rights of individuals to abstain from jobs that will do incredible damage to their long-term health (maybe we could even decide that such people should not be denounced as ‘scroungers’ for doing so).

I’m not holding my breath.

The International Monetary Fund has released a paper entitled Inequality, Leverage and Crisis making the case that inequality was an ‘underlying cause of the Great Recession of 2008-2009′, The Telegraph reports:

“Global unemployment remains at record highs, with widening income inequality adding to social strains,” he [IMF chief Dominique Strauss-Kahn] said, citing turmoil in North Africa as a prelude to what may happen as 400m youths join the workforce over the next decade. “We could see rising social and political instability within nations – even war,” he said. [my emphasis]

I doubt the IMF has taken a drastic leftward turn (as this article suggests, it is subtley backing Washington’s position on the emerging ‘currency war’ between the US and China, and it has come out against any form of capital controls). Still, paragraphs like this are startling:

The paper, by the Fund’s modelling unit, warned of “disastrous consequences” for the world economy unless workers regain their “bargaining power” against rentiers. It suggests radical changes to the tax system and debt relief for workers.

During the current crisis the IMF has found time from its busy schedule of structurally readjusting the living shit out of third world countries to give some decent advice to the world’s policymakers. Last year it released a paper arguing that one of the best ways to boost global demand would be to increase wages as a proportion of national income (thus ending a decades-long trend of wage stagnation in countries like Britain and the US). It has also warned countries of the dangers of public spending cuts. (See the brilliant Duncan of ‘Duncan’s Economic Blog’ for more: http://bit.ly/gAzOEH).

The fact that the countries currently up in flames are all vastly unequal (intuitively something likely to encourage civil strife) hasn’t been pointed out much recently. These revolts aren’t just pro-democracy, they’re also against the parasitic elites who enjoy stunning opulence while hundreds of thousands live and die well below the poverty line. Hopefully with pronouncements like this coming from the IMF this might become a talking point.

The growth of inequality in recent decades seems to be at breaking point. A few months ago I wrote about some research showing that increasing inequality isn’t even making the rich feel better off (quite the opposite), and multi-billionaires Bill Gates and Warren Buffet have even offered to pay more taxes to deal with the US’s deficit crisis. Without the veneer of increasing consumption and cheap credit to distract us (and with spending cuts for the many coupled with tax cuts for the few on the way), the vast inequalities developed over the decades are now almost offensively obvious.

Sam Harris on the Huffington Post recently commented: “We now live in a country [the US] in which the bottom 40 percent (120 million people) owns just 0.3 percent of the wealth. Data of this kind make one feel that one is participating in a vast psychological experiment: Just how much inequality can free people endure?” I feel we may be reaching that limit (and we now know to ask how such inequality can be endured by people much less than free.)

When explaining the Conservative vision of the ‘Big Society’ to the public, Cameron and co. have always emphasised the role to be played by the voluntary sector (after all, most people would agree that charities are generally a good thing). The state, they claim, often ‘crowds out’ other non-government organisations that are better suited to the task of providing social services. Moreover, the state often does this in an impersonal, alienating way; Francis Maude talks about the ‘We are the State, you are the citizen’ mentality of the bureaucrat that the Big Society is meant to end. The picture that emerges is one of closely-knit communities all chipping in while Leviathan keeps its distance. Lovely.

Too bad we now know that private firms, not voluntary groups, are in line for most of the contracts to run public services in place of the government. The Independent’s 20p counterpart I (or ‘the I’, whatever we’re meant to call it) reports that:

“Private firms Serco, Sodexo and Mitie have been chosen as preferred bidders to run the Community Payback scheme for offenders, with no voluntary groups on the shortlist…Only two voluntary bodies are among 35 groups to qualify to bid for welfare-to-work contracts worth £2bn.”

There’s a word for this: privatisation.

Far more worrying is the plan by the American firm LSSI to manage public libraries in several local authorities. Libraries are inherently unprofitable (the reason they’re public in the first place) and to make the difference it has been suggested that libraries could open coffee shops and introduce self-scanning technology, a prospect that minsters have said they are “relaxed” about. So, rather than having spaces held in common by a community, the Big Society intends to liberate us by providing garish, overpriced coffee shops with under-staffed book-lending appendages attached.

We really are dealing with people who know the price of everything and the value of nothing. A public library to them is just a possible venue for another bloody Starbucks; social housing is a real estate opportunity gone to waste; ancient woodland is just so much potential lumber. Luckily the British public isn’t putting up with it (most identified Cameron’s vision as a cover for spending cuts in a recent poll.) Let’s hope the ‘Big Society’ will be for Cameron what ‘Back to Basics’ became for John Major – a Tory joke.

“There’s always a bigger fish.” – Qui-Gon Jinn

Paul Krugman on his New York Times blog notes a symptom of just how far the West has regressed in the distribution of income: so much of America’s wealth is concentrated in the top 1% of the income scale that those only just below actually feel insecure about their standing. The differences in income among the rich are now so dramatic that Americans in something like the top 10% of earners confidently call themselves ‘middle’ or ‘upper middle’ class. (Read it here: http://nyti.ms/iiA7cV.)

As Catherine Rampell (also of the NYT) explains: ”those who aspire to hop from the 30th percentile to the 35th percentile would need to increase their cash income by $4,000 annually (or by about 17 percent); those who aspire to hop from the 94th percentile to the 99th percentile would require an increase of $324,900 (or 171 percent)…In other words, at least in dollar terms, there is much greater inequality at the very top of the income scale than at the bottom or in the middle.” Put another way, the differences in income between neighbours in a ‘gated community’ are greater than those between people in an actual community. A businessman on several hundred thousand a year can pull back the curtains, scowl at the couple across the street and quite sincerely mutter, “This is bullshit, why don’t I have a jet?”

All this shows that ‘wealth’ is, indeed, relative and psychological. The Thatcherite justification for greater inequality was that the working class was better off in absolute terms. This is barely a sufficient excuse once we realise that people judge their social standing next to their neighbour’s.

The same can only hold true in Britain, a country that has followed America’s example in inequality (we’re now on the way to regaining the distribution of income of c. 1920). Is it any wonder our ‘Business Leaders’ desperately set up ficticious establishments in Monaco and threaten to jump ship if the top rate of tax is increased 1%? (The poor devils, I know…)

So, ever-increasing inequality – the objective of politics in the West for 30 years now – doesn’t even make the rich happy. All this social dislocation, insecurity and resentment is for the benefit only of the super-super rich, who have no social betters (all of whom could probably fit in a medium-sized school assembly hall). Is that what a democracy looks like?

Meet Eric. He’s an ordinary schoolboy who lives at 29 Acacia Road. But what most people don’t know about Eric is that he leads something of a double life. For whenever Eric eats a banana, an amazing transformation occurs. You see, Eric is Bananaman.

I felt a bit like Eric today, running from my city media job down to the protests in Parliament Square. It’s an interesting way to spend your lunch break, swapping a heated office for cold streets and angry chants, but I did it for Eric. Because like most intelligent boys his age, Eric dreams of going to university one day. Sadly his dreams have been crushed by the evil David Cameron and his flip-flopping sidekick who promised Eric (whose love for all things banana coloured and free education won him over at the election) the world because he never believed he’d actually get into power.

Like Bananaman I arrived early at the scene of the crime. When I made it to Westminster there were hundreds of police laughing and joking and a few people on the Socialist Worker stand handing out placards and collecting signatures. No sign of the riot gear to come, the kettles, the charging horses and swinging batons, the brutality of the state that Eric, a firm believer in civil liberties and human rights, has sworn to oppose. Sadly, like Eric, the more ordinary side of my amazing double life took over and my banana powers ran out when my lunchbreak was over and I had to watch the real heroes on BBC News when they made it to Parliament Square.

A couple of weeks ago I was in Germany, reporting on a corporate tax conference. Realising I was in the birthplace of Karl Marx, my amazing double life took over once again and I took a trip to his old house. All fired up and ready to save the world from the tyranny of modern capitalism (before heading back to listen to bankers and lawyers) I felt myself wishing ideology paid the bills.

But it could be worse. At least I believe in something.

Unlike that shallow, vacuous, rent-a-popular-pre-election-policy, Rorschach shitstain of a man, Nick Clegg.

Watch Eric transform into Bananaman: