I’m launching a new conference on tax justice in London on May 2nd through International Tax Review magazine. It’s free to attend if you’re an activist or with an NGO and you’ll hear from a whole host of great speakers including former Secretary of State for International Development, Clare Short, and anti-poverty activist Richard Murphy.

I would urge you to come and make your voice heard. Tax transparency is one of the biggest issues facing the developing world right now, and indeed our own public services as UK Uncut activists seeking to ensure multinational corporations pay their fair share of tax have shown.

Development agencies such as Christian Aid and ActionAid, which have long argued that poor countries lose more through tax avoidance than they receive in aid, are pushing for country-by-country reporting, a standard which is soon to become a reality for companies in the extractive industries. The NGOs argue that tax is not simply a legal issue, it is a moral one, and it is not enough that taxpayers remain within the letter of the law, rather they must adhere to its spirit. Most multinationals remain sceptical about country-by-country reporting, but where it was once a niche issue demanded only by hardened activists calling in from the cold, now it is something companies cannot afford to ignore.

Check out the full programme and register here.

John Maynard Keynes (1883-1946) was an economic theorist whose views on money and unemployment became some of the most influential of the twentieth century, shaping government politice worldwide. Seeming to forget how badly that century went in its latter half as much as the first, scores of leftists have now been turning to various versions of Keynes theories as a one-size fits all catch phrase for what ever economic policy they want the government to pursue. Proponents include the New Economics Foundation, the Trade Union Congress, Counterfire, UkUncut and many other voices liberally beaitifed by the Guardian‘s typography.

The ideas of the grand Eton and Cambridge educated statesman are being used like leftist magic dust, in which any austerity measure can be batted away with the response that ‘Keynesian’ ideas prove that the government could increase unemployment by not cutting public services. This is, as I hope I can show a bit below, untrue on a number of levels. It’s not what Keynes said, it wouldn’t work, and I don’t think the left should want it to either – ultimately.

1. All problems can be solved by investment

Keynes was not a transhistorical writer, summing up decades of careful investigation so that we, the forunate inheritors, could apply his maxims to any given situation. He was, rather, a pragmatist. His theories were forged in the India Office before the Great War, and from that moment changed with the needs of his dear government. When people say that we need Keynesian investment, I assume they mean of the kind which boostered the British economy after the World War – an investment which was not levied through high taxation of the rich, but instead made on the back of the greatest loan from the USA the UK has ever had (negotiated by Keynes), and which vastly increased the deficit and the debt. So ‘increasing investment’ means ‘borrow more from richer governmemts’.

2. We need more Keynesian policy

This is exactly what the UK government is trying to do at the moment. The frantic sloughing off of labour and labour regulations – in other words, slashing wages and sacking people – is a method to increase profits. This is classic business strategy: when faced with a crisis, who get rid of your workforce and invest in machines instead, because they make surplus value more efficiently. By slashing public sector employment and encouraging the private sector to do the same, Cameron and co are trying to (1) increase national and business profits, and (2) prove to the world that the UK is a great place to invest their bonds in. Bonds = debt. The government is trying to increase its debts so that it has the money to invest in grand infrastructural projects. The Olympics are our version of 3rd Reich motorways.

3. Increased wages will make the UK economy grow

The trickle down effect has its mirror image in this beautiful neo-Keynesian mirage, the trickle up – in which it is imagined that so long as money is distributed from corpoations to their employees, then the money will immediately be poured into a circulation of consumption which will boost business and equal generalised national growth. This ignores the global dimension of the economic crash. Given the global insecurity of jobs, thanks to the tactics of businesses *everywhere* in response to a fall in profits, any extra money put into the sphere of the consumer is likely to stay there as savings rather than active consumption of products. This idle money can of course then be used by banks to fund a round of lending – but the lending will foremost go into the excellent rates being offered by desparate bond markets, not petty personal consumers. Second, any excess wages will be put into buying cheap products from wherever they derive – which is highly unlikely to be Britain just yet. Increasing wages here, if those monies did magically find their way back out into the sphere of consumption, would leave the country and boost another’s – though still probably insignificantly.

4. The state should enforce sustainable capitalism

This sounds weird when phrased as above, but it really is the argument that gets made. The new Keynesians phrase it like this: ‘the organisations of the workings class, or mass social movements a la UkUncut, need to push for growth in the economy in order to alleviate the poverty of normal people. Economic growth based on investment by this mass state capitalism (i.e. state control of industry and strong regulation of the financial sector, plus high taxation) will create a form of capitalism which put economic power back into the hands of the majority, and an environment without the risks of economic crisis, the disastrious effects of which we are currently witnessing.’ On an economic level, this misses an inherent structural fact of capitalism: it needs crises in order to survive. Capitalist crises are a method of rejuvenation, in which labour costs are slashed, new machines are bought, and the the classes (ruling and working) are recomposed. Crisis is part of the life cycle of the capitalist beast. Capitalism which is made more stable (i.e. with longer periods without crises) simple brings on harder, longer periods of crisis. The historical proof for this is quite simply the mid 1970s, the period in which the great Keynesian boom period turned out to have had nothing to do with Keynes, but instead was the elongation of american productive growth through industry built on the back of imperialist war, racist labour policy and interest from war loans. The crash came, and lasted for half a decade. This crash will last longer (we’re already five years in remember).

5. Growth is good for the working class

And here’s the moral peak of the new Keynes mountain, where the bureaucrats of the future throw their hands up and praise the monetary policy king. Economic growth, they cry, is the saviour of working people. It will provide jobs and with those, wages – and with wages, a higher standard of living. Underneath, many of the Labour party hacks understand that high standards of living are not the same as freedom, so I won’t make that critique here. However, they should understand that more jobs, once the effect of the crisis management has pulled through, will mean more bad jobs. This government is Keynesian. It wants to provide lots of jobs for working people – long, hard, badly paid jobs. Economic growth will arrive, but at a cost – perhaps on the back of a cheap war with Iran, perhaps through a reintroduction of racist immigration policy (mass cheap labour). If the working class benefits, it will only be because another mass of people have been delicately ignored. Economic growth can only happen through the massive extraction of labour from people; this is a far leap away from freedom or strength.

This week has seen a huge furore over the Government’s “workfare” scheme, whereby unemployed people, and those on disability benefits, can be forced to work for 30 hours a week. If they refuse, they can have their benefits removed for a period of three months. Amidst the uproar, I thought it might be worthwhile to detail some of the other work- and benefit-related policies that currently exist in the UK, to make clear that the workfare scheme is not anomalous, but rather that it is part of a systemic attempt by the Government and business to drive down wages, and to exploit the most those who suffer most in the current financial crisis.

Minimum wage

In 1999 New Labour introduced the national minimum wage in the face of fierce opposition from the Tories, then in opposition. The current rates of minimum wage are as follows: £4.98 per hour for 18-20 year olds, and £6.08 for 21+.  Significantly, these numbers fall short of the “living wage”, which is the estimate of what someone needs to earn in order to live “outside of poverty”. The official figures for this are produced by the Greater London Assembly’s Living Wage Unit. The current living wage is £8.30 per hour for London, and £7.20 per hour outside of London.

Workfare

It is probably best to begin by outlining the “workfare” scheme as it currently exists. Under this scheme, those who have been unemployed for a number of months can be forced to work 30 hours a week for no more than their jobseekers’ allowance. JSA at current rates is £53.45 for 18-24 year olds, and £67.50 for 25+. By dividing these figures by thirty (the number of hours work), we get hourly rates of £1.78 for 18-24 year olds, and £2.25 for those aged 25+.

Apprenticeship Schemes

In October 2010, the Government launched its first major attack on the minimum wage, by introducing a special rate for “apprentices” at £2.50 per hour. Last October this was upped to £2.60. This work can be paid at this lower rate for up to a year, after which point the standard minimum wage applies so long as the apprentice continues work for the same employer. Significantly, the Government’s definition of an apprenticeship is essentially nothing more than “full time work + gaining a qualification.” What this means in reality, is that by throwing in the possibility of getting an NVQ, a BTEC, or a “key skills” qualification, any employer can now pay a worker less than half the minimum wage. The laws also, therefore, give financial incentives to not offering employment at the end of an apprenticeship, as the employer would have to pay the national minimum wage. Instead, it is cheaper to keep contracts to a year, and each year employ a new apprentice at the cheap wage rate. It is notable that for workers age 25+, the apprenticeship rate is only 35p more per hour than Jobseekers’ Allowance/Workfare. Apprenticeships have been rolled out not only in private businesses, but in local authorities, and in the higher education sector. This massively underpaid work is now holding together the country’s infrastructure.

The Big Society

The “Big Society” was the flagship policy of the Government in its first year. The idea was to encourage huge amounts of “volunteering” (otherwise known as entirely unpaid work.) Whilst the idea hasn’t exactly taken off in all sectors, one place that it has is in preparation for the Olympic Games, where the Government has attempted to recruit 70,000 volunteers. Lloyds TSB has predicted that the Olympics will generate £10bn for the UK economy. No doubt, much of this money will head straight to the pockets of multinational companies, such as McDonalds, who have guaranteed a monopoly on food sales in the Olympic park. It is hardly a surprise that people working for no money at all can produce large profits.

Prison work

Perhaps the most super-exploited workers in the UK are prisoners with jobs. They have a minimum wage set at £4 per week, with the average wage being £10 per week – while Justice Secretary Kenneth Clarke has suggested that prisoners should work 40 hours per week. This would give a minimum wage of 10p per hour, and an average wage of 25p per hour. The UK prison population hit a low of about 45,000 in 1993. Today this figure stands at approximately 97,000 allowing for huge inputs of labour at minimal cost to businesses.

This affects all of us

It is often assumed that these schemes of work only affect the unemployed. But the truth is that they affect everyone. Unemployment figures are tricky things, but what is without doubt is that there are huge numbers of people out of work who want to be in work (even the most conservative estimates from the Office of National Statistics, find six jobseekers per vacancy. And in some areas, particularly urban centres, these statistics are much much worse. What this means is that there is a huge demand for employment, and with that demand employers can afford to pay less for work. High unemployment leads inevitably to suppression of wages for all workers – all employers can find someone who will do the same work for less money. To an extent workers have been previously protected by the national minimum wage. But as we have shown, this has been massively attacked by the workfare programme, the new minimum wage for internships, the ‘Big Society’, and the possibility of super-exploitation of prisoners. All of this adds up: the Government believes that the way out of the crisis is the provision of hugely exploitative cheap labour to increase profitability for employers. In real terms, that means they believe in a policy of impoverishment and immiseration of everyone who isn’t an employer.

Living and dying with benefits

It should be remembered that the current benefit schemes fall significantly short of what is necessary to live. Those who are unemployed will live in poverty. In 2009 a statistic slipped out: in one area of the UK, 15% of young people who are “not in education, employment or training” are dead within a decade. The Government are keen to claim that today’s mass unemployment is a result of people being “workshy”, but if this were true, then there would be no demand for apprenticeship work at half the minimum wage. Indeed, the Government are determined to claim again and again that mass unemployment is anything but a structural problem (as if, since the crisis hit in 2008, a million people quite randomly lost the ability to work.) Last week, the Guardian produced an excellent video on the lack of work available. The Government’s current strategy will condemn more and more people to poverty whether they work or not. As a solution, the Government suggest “entrepreneurship”. By this, they imagine a magical solution to all of the ills of mass unemployment. If only, they believe, the unemployed would think harder, would become more entrepreneurial, they will drag themselves out of poverty. What the Government has failed to notice, is that the most entrepreneurial people in today’s society, the managers of large businesses and corporations, and indeed the Government itself, are making their profits from employing large numbers of people at less than the minimum wage. Entrepreneurship, thus, is not a “way out” of poverty, but the very thing keeping people in it.

“Take away their benefits”

Time and again, there have been demands from the press (and indeed a section of the UK population) to take away people’s benefits. It is perhaps worth dwelling for a moment on what this might actually mean. Under the current system, if you have no money you cannot live – you cannot buy food or clothes, you can’t rent somewhere to live, and you can’t keep warm. The point of benefits is to allow for these minimum requirements for life, where they cannot be gained through earning a wage. As we have seen, even on benefits people will live in poverty, but the demand that people “have their benefits taken away” is nothing but the demand that they are made homeless and starve. The UK Government has argued that those unwilling to take part in workfare will lose their benefits. In a situation in which there is simply not enough work for everyone, they demand that you work for £1.78 an hour. If you refuse, you can probably expect not to survive.

Athens has begun to burn. Since 2008, Greece has sacrificed everything – up to and including its multi-party democracy – in order to ensure that French and German banks can continue to recieve tribute on their loans, and that the Euro can go on in its present form. On sunday night, a people with little left to give boiled over with anger at the sight of even more being taken from them.

It is perhaps unsurprising to see some Greek activists drawing a connection between the German government, which has effectively colonised the Greek treasury, and the German government of the 1940s. Yet perhaps a better comparison might be made with the role played by the United Kingdom during its heyday as a commercial and financial hegemon.

Like Germany today, Britain in the late 19th and early 20th century was a creditor nation. It ran a current account surplus, selling far more to the rest of the world than it bought. The flipside of this was that, like contemporary Germany, its banks were a source of loans and investment funds for the rest of the world.

And Britain, in its position as a creditor nation, faced the same potential vulnerabilities that Germany does today. As a major exporter it needed to keep markets open to its goods. Meanwhile, the outward flow of loans and investment funds meant that its banks built up assets abroad that somehow needed to be protected. How could they stop British-owned businesses abroad being nationalised, or foreign debts to British financiers being repudiated?

As it turned out the gunboat proved rather useful in these respects. When China closed its markets to our goods we shelled them. We shelled Greece to ensure they compensated Don Pacifico for the many shares and bonds he allegedly lost when a Greek mob burnt his home. We invaded Egypt when they appeared unable to pay their debts, and, in the early 20th century, shelled Caracas for similar reasons.

Germany of course, has not had to resort to such unsubtle measures in order to protect its trade and foreign assets. And that’s because, in the Euro and ECB, it has a more powerful gunboat than Britain could ever hope to possess. Here in Britain, the government is inflating away some of its debts. The Bank of England is printing money and fuelling inflation, which in turn reduces the real value of the national debt. The bondholders have little choice but to such it up.

This is, however, not a luxury enjoyed by the heavily indebted governments of Southern Europe. They can’t print more money, because their money is printed by the German-dominated European central bank. Even at the cost of higher unemployment, and a deeper European recession, the ECB has kept money tight and interest rates relatively high. This keeps inflation down and protects the value of the debts owed by Southern European govenrments to French and German banks. Meanwhile the potentially cataclysmic costs of exiting the Euro have proven sufficient to whip into shape any government that dares considers defaulting on its debts (under normal circumstances, it would be madness for a government in Greece’s position to consider any option other than default).

Yet of most importance is the political power wielded by the EU over its member states. Even the most potent structural adjuster at the IMF must have been creaming in his pants to see the ease with which the EU helped to depose the government of Papandreou, before its apparatchiks parachuted in the bailiff regime of Papademos – a veteran of the European Central Bank, whose sole mandate is to keep the cuts going, and the interest payments flowing.

And as though this were not enough, the EU’s Economic chief has back German andFrench proposals to set up a seperate account that will manage a portion of the Government’s revenues, in order to ensure debt payments. The EU will, in effect, be given the right to directly tax the Greek population. The basic, longstanding, democratic principal of “no taxation without representation” – the idea the people may be taxed by none but their elected representatives – is to be torn aside for the benefit of the bondholders, and the European banking system. As an international debt collection agency, the EU really is second to none.

To contact Reuben email reuben@thethirdestate.net

Imagine a door-to-door salesman comes to your house one day to try and sell you a burglar alarm by telling you about the terribly high crime rate is in your area. You’re not convinced, so you tell him you don’t want one. A little while later that same salesman breaks into your house, nicks the TV and does a crap on the sofa.

Now replace “door-to-door salesman” with “David Cameron”, “your house” with “France” and “burglar alarm” with “financial transactions tax”, and you’ve pretty much summed up our government’s attitude to attempts to rein in the forces of global finance.

This was Cameron speaking a few months ago (bolded text my emphasis):

The danger, we have always believed, is driving transactions to a jurisdiction where it wouldn’t be applied. So a global tax would be a good thing, but in Britain also we have put in place stamp duty on share transactions, a bank levy.

…and this was him this week:

Boris Johnson and David Cameron today urged French bankers to quit Paris and move to London in a dramatic escalation of a row with the French president.

The Mayor joined the Prime Minister in calling for traders to escape Nicolas Sarkozy’s plans for a financial tax by setting up business in the Square Mile.

Mr Johnson said: “Bienvenue à Londres. This is the global capital of finance. It’s on your doorstep and if your own president does not want the jobs, the opportunities and the economic growth that you generate, we do.”

Hours earlier Mr Cameron condemned Mr Sarkozy’s plans for a new financial transaction levy. Speaking at an EU summit in Brussels, he stressed that the new tax could cost the EU half a million jobs.

He added: “If France goes for a financial transactions tax, then the door will be open and we will be able to welcome many French banks to the United Kingdom.”

So, in November you have Cameron telling us that of course a tax on bank transactions is a lovely fluffy idea, which we’d be only too happy to implement if only we could, but you see it just isn’t possible because all those nasty banks would move their operations abroad if we did that, and we don’t want that, do we? Then this week, he explicitly invites those very same nasty banks to move from France to the UK so they don’t have to pay the transactions tax which Sarkozy is threatening to bring in.

Cameron, in short, is explicitly trying to bring about the very thing which he previously said would make a transaction tax untenable, despite ostensibly supporting such a tax in principle. Which, perhaps not surprisingly, suggests rather strongly that his original commitment to it was somewhat less than whole-hearted. Whether this also applies to Cameron and the Conservatives’ attitude to other redistributive taxes is something about which I leave the reader to draw their own conclusions.

This is a guest post by Natty

As we all struggle to grasp what David Cameron’s veto in Brussels last Friday actually means, one theme continues to re-emerge. Indeed it’s a theme that has emerged time and time again in the history of British politics. When asking ourselves why the PM decided to ostracise the British economy from 26 other EU countries, of which we do over half our trade with, one answer stands out above all others; The City.

This was not simply some principled stand by an aristocratic leader with frankly aristocratic views of Britain’s place in the world, although Cameron’s ‘defiant’ post-match analysis did betray such a worldview. Neither was this a weak PM caving into his Europhobic MPs. Instead Friday morning’s events were an archetypal case of the financial hub of British capital, and one of the financial hubs of world capital, exercising their veto.

All 27 European leaders in Brussels knew this. Sarkozy explicitly (and by some reports expletives were used) made it clear to Cameron that several of the safeguards and protections The City had enjoyed for decades would be dropped if Britain were to retain their already awkward place in Europe. Commentators are now painting the picture of a ‘two-track’ Europe, although a multilane highway may be a far more accurate analogy.

Cameron’s use of the ‘veto’ has clear implications on the UK’s trade and diplomatic relations with what we can now more than ever demarcate as ‘Europe’. However the veto also conveys what the Coalition government believe a recovery in our economy should look like. Despite sound bites suggesting an economic recovery based on growth in manufacturing [note Obsorne’s ‘march of the makers’] it seems that productive capital will yet again play second fiddle to The City. It is here where the Government is hoping growth will arrive and the money to cut the deficit will be found. Cameron’s veto was not only a diplomatic gamble, but also an economic one.

But what do we mean by The City? Well for one thing its no longer a ‘square mile’ geographically, with many banks and all London offices of the big three rating agencies based in Canary Wharf. The financial core of The City consists of the Bank of England, Merchant Banks (the traditional trading houses and newer investment banks), Clearing Banks (you’re everyday high street banks) and the London Stock Exchange. Obviously despite their interconnectedness, to completely homogenise the interests of such a diverse range of institutions is a simplification. They can however be impressively cohesive in advancing their cases on capital controls and tax regulation to government.

Indeed The City have historically counted the Treasury as close friends in these battles, consistently supporting the role of The City as a global hub of financial transactions. Their help has historical foundations in the civil service’s sense of imperial entitlement that Cameron himself expressed on Friday. The relationship between the Bank of England and Government has been crucial too. In the mid 1960s the Bank’s chief Lord Cromer explicitly told Harold Wilson that his much-vaunted plans for industrial modernisation were to be curtailed in order to retain the position of sterling as a world currency. Wilson backed down. In 1947 Clement Atlee was forced to make a very similar decision by the Treasury. This is not to say that what many term ‘productive capital’ have starved over the last hundred years; they clearly haven’t. But as far as the direction of the British economic policy goes, with a few short exceptions, its been the financial hub who have been in the driving seat.

Clearly Cameron’s desperation to protect The City has short-term benefits for the ‘Square Mile’. But some commentators are already arguing that in the long term it may hasten its demise. The City doesn’t always follow their long-term interests and regulations from Europe may still arrive. Many merchant banks opposed the ‘Big Bang’ deregulation of the 1980s, and already some are pointing to the powerful enemies in Europe and elsewhere the British have made. Given the speed at which EU institutions work there will be the time, if not the political will for U-turns. History tells us whatever happens those in The City are up for a fight. And for the coalition government, we now know that they need The City to win big.

Well, my friends, the suspension of Greek  democracy appears to be complete. When Papanderou was forced out, to be replaced by a government of national unity. I remarked:

Greece’s multi-party democracy has in effect been supplanted by one party – The Austerity Party. The political elites have, in effect, formed a cartel. Greece’s major parties imagine that they can force through the huge austerity package without facing the wrath of the electorate – just as long as they all in on the game

But even a few days ago, I did not grasp quite how far the shelving of democracy would go. I imagined that, at the very least, the National Unity government would be made of people whose parties had actually won some votes at election time, and who were planning to stand for office again. Not so. Meet Greece’s new Prime Minister, Lucas Papademos, former Vice-President of the European central bank.

“I am not a politician” he announced yesterday. Well no, he certainly isn’t. Politicians are people who have to do a whole lot of dreary things, like making themselves known to the  public, winning their confidence and standing in elections. Papademos, by contrast, has never stood for public office. He has assumed his position purely on the strength of his career in banking, and in particular his connection – via the ECB – with Europe’s political and financial establishment.

Neither does he intend to stand for office in the future. His sole function will be to ensure that Greece impoverishes its citizens enough that it can keep the interest payments flowing to Europe’s major banks. He will preside over the most important political and economic decisions that have faced Greece since the 1970s. And will be to do so without worrying a jot about the opinions of those who will have to live with his decisions – i.e. the people of Greece.

For Papademos, this is probably a fine way to cap to his grand career. He better just hope that he doesn’t find himself on the wrong end of a revolution. After all, the only democracy that exists in Greece today is on the streets of Athens.

To contact Reuben email reuben@thethirdestate.net

There are serious tensions building up within the Conservative Party ahead of tomorrow, as MPs prepare on whether Britain should have an in/out referendum on the EU. Cameron has whipped has MPs to vote against it, and the possibility of a minor rebellion has generated numerous column inches. However most commentators have failed to grasp what these intra-conservative tensions are fundamentally about.

According to some accounts this is an insurgency by the Conservative right. Certainly there is a hardcore of traditional Tories who feel deeply alienated from Cameron and Co’s metropolitan clique. Yet despite the huffing and puffing in the Telegraph, Cameron is not the Conservative Party’s Tony Blair. The “modernisation” of the Tory Party has been very much a cosmetic job, and Cameron and Osborne have made no serious attempt to pull the party’s politics towards the centre. Equally flawed is the tendency in the Liberal press to frame this as simply a repetition of previous conservative squabbling over Europe. Back in the early 1990s the were a number of serious, ideological Europeanisers at the top of the Conservative party – think Michael Heseltine, or indeed Geoffrey Howe, whose resignation over the government’s failure to follow a sufficiently integrationist path lead to the fall of Thatcher.

This is not, in any sense, true today. The Conservative ministers holding the line against their Eurosceptic bankbenchers are themselves a heavily Eurosceptic bunch – not least David Cameron. The tensions we are seeing arise not from a clash between different ideological wings of the conservative party, but from a dissonance between the ideology of the Conservative party, and the politics Conservative government.

Throughout most of the 20th century, the Conservative party has been the primary representative of the interests of British business, and, in turn, has generally won its backing. Yet, having a political life of its own, the Tory party has never been a perfect vehicle for the interests of the business class. This is partly because, while the interests of business are liable to change over time, politics is not simply a matter of turning one tap off and another tap on. There have been periods in which fiery patriotic rhetoric – of the kind we may see from the conservative backbenches on Monday – deeply suited the interests of capital. The word “jingoism” arose at the turn of the 20th century, as the conservative government was firing up up hundreds of housands of ordinary Brits to fight and die for the gold and diamond mines of South Africa. More recently, Margaret Thatcher leant heavily upon the rhetoric of “making Britain Great” in order that the destruction of many people’s living standards could be reframed as sacrifices made for the sake of national salvation. Meanwhile, across the 19th century and into the 20th, the Tories made a point of fetishising Britain’s ancient constitutional machinery in order to stem the tied of democracy – again something that will feature in tomorrow’s debate.

Given the party’s philosophical baggage, it is not surprising that its activists, its Parliamentary party, and its leadership display an instinctive antipathy towards the European project. But here’s the rub. The party relies on the backing of big business, and, like any government in capitalist economy, relies on the acquiesence of corporations in order to get things done. And a desire to get out of Europe is utterly incompatible with the party’s crucial relationship with corporate Britain.

Despite the delusions of some on the liberal left – who see the EU as nothing more than a cuddly internationalist project – it is in no way surprising that the FT has consistently taken a ridiculously integrationist stance on Europe. Britain’s major corporations have little to gain and a great deal to lose from British withdrawal from the EU. Not only does the current situation grant them a huge open market. It also enables matters like the EU-India FTA – wherein the working class stand to take a huge hit for the benefit of the investor class – to be hived off beyond the reach of democratic institutions. Moreover it grants British business unfettered access to enormous reserves of cheap non-British labour (an uncomfortable truth for us lefty internationalists, but a truth nonetheless). In other words, British business would not countenance a decision to put Britain’s relationship with Europe in the hands of the mainly Eurosceptic public.

Cameron gets this. As the leader of business backed party, and as a Prime Minister who relies upon the co-operation of business, he knows that a referendum on the EU is not an option. Yet, it appears that these realities are less prominent in the minds of those lower down the conservative food chain. Thse people are less invested in conservative government, and for them the trade-off between politics and strategy is rather different. And so tomorrow we will se the manifestation of tensions inherent in the Tory party’s relationship with business. Yet the possibility of the British people actually being given a say over how they are governed remain as slim as ever.

To contact Reuben email reuben@thethirdestate.net

On reading George Osborne’s oh-so-convincing CiF piece setting out exactly how tough he’s going to get with tax dodgers (they’re “like benefit cheats” apparently – can you imagine the depths of their perfidy?), one sentence in particular jumped out at me:

Tax evaders also make use of tax loopholes, and the truth is that over the last decade they have multiplied.

Really? I could have sworn that all those boring snarky rightwingers who like to have a go at UKUncut repeatedly told us that tax evasion (as opposed to avoidance) was illegal, while making use of legal loopholes is kind of within the law by definition. Ah well. Lucky Osborne isn’t supposed to know about economics for his job or anything, or that would have been really embarassing.

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.