Young people in UK hit hardest by austerity

Thomas Scripps

People under 34 in Britain currently face the worst life prospects in generations. “Is Britain Fairer?”—published this October by the Equality and Human Rights Commission (EHRC)—reports a continued worsening of their living conditions over the past five years.

The EHRC publishes the statutory report on equality and human rights progress in England, Scotland and Wales every five years. Key sections of the report show that during the recession and up to 2013, young people were hit by the steepest drops in pay and employment, had less access to decent housing and better-paid jobs, and experienced deepening levels of poverty.

The findings add to a mountain of evidence of an immense crisis facing millions of young people across the UK.

Wages have plummeted since the 2008 crisis. Between 2008 and 2013, those aged 16 to 24 lost 60 pence an hour on average, taking average pay for the bracket down to just £6.70. For those aged 25 to 34, the average fall in hourly pay was £1.40—down to £10.60 an hour.

The sharpest period of decline occurred throughout the years 2009-2011, during which pay for 22- to 29-year-olds declined 10.6 percent, according to a January report by the Institute of Fiscal Studies (IFS).

The effect on young people’s’ lives is devastating. People in their 20s are £1,800 worse off than they were in 2010. Last year, the Resolution Foundation found that almost one in three young people (29 percent) were classified as low-paid: 1.5 million people. The proportion has more than trebled from a 1975 figure of less than one in ten (8 percent). Low pay is defined as earning less than two thirds of the hourly median wage—an already low £11.56—meaning these 1.5 million young adults earn less than £7.71 an hour.

It is little wonder that poverty rates for those between the ages of 16 and 25 climbed from 25 percent in 2003 to 32 percent in 2013, as reported by the UK Wealth and Assets Survey. More broadly, the IFS reports that living standards for young people “remain well below their pre-crisis peak.”

Last year, a report by the National Institute of Economic & Social Research showed that Britain’s youngest workers have suffered an unprecedented fall in real wages since 2008, while the Organisation for Economic Co-operation and Development warned that millions more young people across Europe will struggle to fulfil their ambitions because of low pay.

Analysis by the House of Commons Library for the Labour Party, conducted this year, showed that young people in Britain now fare comparatively worse than at any point since 1992.

Besides crumbling wages, two driving forces behind the collapse of British youths’ fortunes are worsening conditions in the labour market and superheated housing costs (particularly in London, but across the UK as well).

At 14.4 percent for 16- to 24-year-olds, young people are nearly three times as likely to be unemployed than their older co-workers—the biggest gap in 20 years. Problems continue far beyond the numbers of officially unemployed. A Local Government Association study in March 2014 suggested 1.2 million young workers were either underemployed or overqualified. It calculated that this amounted to 2 billion potential hours of work wasted each year.

Between 2013 and 2014, the Office of National Statistics (ONS) reported an increase of 19 percent, from 624,000 to 744,000, in zero-hours contracts—and a substantial and consistent rise since the 2008 crash. The real number is likely to be much higher.

In addition to the insecurity and lack of employment this brings and the absence of benefits like sick leave and maternity pay that such contracts imply, research by the Trades Union Congress shows that a majority pay less than the living wage. It is a sign of desperation that 47 percent of young people would be willing to accept a zero-hours contract, compared to 40 percent of adults and just 25 percent of those aged 55 or over.

More than half of unemployed young people are feeling anxious about everyday life, as reported by the Prince’s Trust. A third of those unemployed surveyed agreed with the statement that they were “falling apart,” and one in five among young people generally.

To make matters worse, their difficulties are compounded by an ongoing housing crisis. Just 3 percent of house buyers in June 2014 were aged between 18 and 30, according to the National Association of Estate Agents. Accountancy firm PwC predicts that by 2025 more than half of those under 40 will be living in rented accommodation. ONS figures show that since January 2011 rents across the UK have increased 10.2 percent—with the fastest rate of increase occurring between June 2014 and 2015. With the housing shortage set to continue, this trend shows no sign of reversing.

The government has published a budget widely considered one of the most penalising for young people (particularly the poor) in recent memory. Housing benefit is to be denied to 18- to 21-year-olds under the cynically titled “earn or learn obligation.”

The compulsory living wage, which the Conservatives tried to pass off as a progressive measure, will not even apply to people under 25, and the minimum rate will remain at £6.50 for 21- to 25-year-olds. Added to this were the scrapping of maintenance grants, the possibility of tuition fee increases and a freezing of the level of income at which graduates must start repaying their debts (£21,000 a year), decoupling it from inflation adjustments.

There are already attempts being made to construe the situation as an intergenerational crisis, rather than one rooted in the profit system and the imposition of austerity. In fact, people of working age are those most likely to be wealthy, with two thirds of the richest 10 percent of households aged between 45 and 64. Only about a quarter of such households are aged 65 or above, and only 5 percent of this group pay the higher rate of income tax.

TUC general secretary Frances O’Grady responded to the EHRC report’s finding with a plea to the government that “This report should be a wake-up call to ministers.” She continued, “Without better employment and training opportunities many young people will continue to be shut out of the recovery.”

It will come as a surprise to many that any recovery at all is taking place for working people.

Japan enters “technical recession”

Nick Beams

The Japanese economy has entered a technical recession, defined as two consecutive quarters of negative growth. The contraction in the third quarter, which was the result of a fall in business investment, has dealt another blow to the claims that so-called “Abenomics” would restore growth to the world’s third largest economy.

It is the second such recession since Prime Minister Shinzo Abe took office in December 2012 promising radical measures, based on increased fiscal stimulus and a major expansion of the money supply, to end the cycle of deflation and anaemic growth which has characterised the Japanese economy over the past two decades.

According to official government figures, gross domestic product declined at an annualised rate of 0.8 percent in the three months to the end of September, following a 0.7 percent contraction in the second quarter.

The main factor in the contraction was a fall in business investment, prompted by fears of the impact of lower growth in China and a weakening global economy.

Atsushi Takeda, an economist at Itochu Corp in Tokyo, told Bloomberg: “This report shows the increasing risk that Japan’s economy will continue its lacklustre performance. The weakness in capital spending is becoming a bigger concern. Even though their plans are solid, companies aren’t confident about the resilience of the economy at home and abroad.”

The fall in inventories subtracted 0.5 percentage points from growth in the third quarter as companies ran down stocks built up over the previous six months, while lower business investment shaved off a further 0.2 percentage points. Increased consumption spending added 0.3 percentage points to growth but it was insufficient to overcome the downward trends in the business sector.

Abe has appealed to businesses to advance their spending plans and use their record cash holdings for expansion but his urgings are falling on deaf ears, with investment falling by 1.3 percent in the three-month period.

Faced with the failure of its policies, the government is trying to put the best face on a bad situation. Akira Amari, the minister for state and fiscal policy, and said to be a key Abe economic adviser, told a press conference on Monday that Japan’s economic recovery was on track despite some risks in overseas economies.

But other remarks appeared to counter that relatively upbeat assessment. “The problem is that capital spending is not robust, which indicates that the mindset of company executives remains deflationary,” he said.

This situation points to the underlying contractionary trends. Business investment plays a key role in the capitalist economy and is the driving force of expansion. Increased capital spending leads to the hiring of more workers, thereby boosting consumption spending. Likewise, the increase in purchases for raw materials leads in turn to further growth and helps lay the foundations for a broad economic expansion. This is clearly not taking place.

Some economists have drawn comfort from the fact that the biggest factor in the third quarter contraction was the rundown of inventories, a process which can only go so far before there is a reversal.

The Chief Cabinet Secretary Yoshihide Suga struck an upbeat tone. “Corporate profits are at a record level and employment income is still rising,” he said. “The basic trend is gentle recovery.”

But the failure of companies either to undertake investment, or, where they do, to go overseas, belies that assertion.

According to Kiichi Murashima at Citigroup in Tokyo: “Unlike in 2014, when the consumption tax was raised, the economy contracted for two quarters in a row without any exogenous or systemic shock, which in our view highlights its underlying weakness.”

The ongoing stagnation of the Japanese economy and the failure of “Abenomics” to provide a boost will increase pressure in two policy areas.

There will be increased demands for the implementation of the so-called “third arrow” aimed at attacking working conditions and introducing great labour market “flexibility.”

Hiroshi Shiraishi, senior economist at BNP Paribas, told Reuters that the first two arrows of “Abenomics”—monetary and fiscal policy—were meant to buy time but Japan had “failed to make progress with painful reforms needed to boost its growth potential. Without reform (the ‘third arrow’), the economy’s growth potential remains low, making it vulnerable to shocks and to suffering recessions more often.”

The contraction will also increase pressure on the Bank of Japan to step up its quantitative easing (QE) program, which at present involves increasing the money supply by about $920 billion per year—the largest such program for any economy.

The Bank of Japan did not increase QE at the last meeting of its governing council but that could change next January. “With rising slack dampening price pressures, we remain convinced that more monetary stimulus will eventually be needed,” said Marcel Thieliant of Capital Economics in Singapore.

Further monetary expansion could have global consequences. In a comment published on Tuesday, Adam Carr, a columnist with the Australian Business Spectator, noted that the muted response to the news of Japanese recession—with so many over the past few years that another does not register—could be “a little too blasé.”

“The reality is that renewed recession risks not only an intensification of the global currency wars, but also markedly higher financial market volatility,” he continued.

This is because moves by the Bank of Japan to carry out additional monetary stimulus will further push down the value of the yen, increasing tensions with its competitors in the region. The yen is down about 60 percent against the Korean won and is at its lowest level against the Taiwanese dollar and the Chinese renminbi in a decade. This causes a problem for each of these economies because exports are critical—comprising up to 50 per cent of the total economy—and “export growth is already weak or non-existent.”

In conditions of slowing Chinese economy growth and a stagnant world economy, opposition to the further devaluation of the yen will increase and possibly lead to retaliatory measures.

Coming as it did in the midst of the G-20 economic summit in Turkey, the Japanese announcement also underscored the fact that not only is “Abenomics” in tatters but all the commitments by the major economies to boost growth.

The G-20, which was largely concerned with discussing the military and political response to the Paris terror attacks, announced no new economic initiatives and simply reaffirmed the already empty commitment made at the Brisbane summit in 2014 to take measures to lift global growth by an additional 2 percentage points.

The official communiqué did, however, have to acknowledge reality, noting that “global growth is uneven and falls short of our expectations”, that “risks and uncertainties in financial markets remain” and that a “shortfall in global demand and structural problems continue to weigh on actual and potential growth.”

When the G-20 summit meetings were launched in the wake of the 2008 financial crisis, it was claimed they would provide a new forum to advance global economic expansion. Seven years on, their failure to do so prompted one commentator to pose the question “What on Earth is the point of the G-20?”

The same question could just as well be asked of other international bodies, including the G-7 group of major economies and the World Trade Organisation, where the so-called Doha Round of trade negotiations remains stalled amid fears growing of intensifying trade and currency conflicts.

It could also be extended to the United Nations as well. Set up in 1945, supposedly to prevent war, its 70th anniversary on October 24 passed without a ripple, an expression of the fact that the UN is going the way of its ill-fated predecessor the League of Nations in the period leading up to the outbreak of World War II.

The deepening recessionary trends, of which the Japanese data are the latest expression, the total inability of the G-20 or any other economic body to advance a remedy, coupled with the predominance of so-called “security” and military questions at every international forum, are a sure indication that the conditions that prevailed in the 1930s are making a return.

The state of emergency and the collapse of French democracy

Alex Lantier

The measures being taken by the government of President François Hollande in response to Friday’s terrorist attacks in Paris constitute an unprecedented attack on democratic rights.

The Socialist Party (PS) government has declared a state of emergency and mobilized more than 100,000 security personnel throughout the country, including regular police, gendarmes, paramilitary riot police and military forces. It is impossible to walk the streets of any major city without running into individuals decked out in camouflage or dressed in black, toting automatic rifles. These paramilitary forces have been given the power to raid any home and arrest or kill anyone declared a threat, with no opposition from within the political or media establishment.

Now Hollande is proposing to amend the French Constitution to allow the president to decree emergency rule, extendable indefinitely, and vastly expand the powers granted to the army and police. The proposal, published online, provides the legal basis for transforming France into a presidential dictatorship.

The existing 1955 law grants the president and the security forces far-ranging powers during a state of emergency. They can carry out warrantless searches and seizures, impose curfews and ban public assemblies, detain and order the house arrest of anyone “whose activity proves dangerous to security and public order,” and dissolve any organization linked to people under house arrest that “participates in, facilitates or incites” disturbances of public order.

The changes introduced by the Socialist Party’s constitutional amendment make the law even more ominous. President Hollande has declared that he intends to renew it as long as France faces a threat from any terrorist group similar to ISIS, i.e., for an indefinite period of time.

An examination of the amendment makes clear, however, that the measures are not about fighting ISIS, which in any case emerged from the NATO powers’ own policy of sponsoring Islamist militias as proxy forces to wage war for regime-change in Syria. The horrific attacks in Paris are the pretext for implementing dictatorial measures that cannot be rationally explained by the threat posed by ISIS.

Under the cover of fighting ISIS, the French state is giving itself absolute powers against anyone it calls a threat to “security and public order.” This vague, all-embracing category has long been used against the constitutionally-protected right to strike and protest—as in the Socialist Party’s decision last year to ban protests against the Israeli state’s war in Gaza.

The legal changes introduced by the PS document effectively make any expression of oppositional sentiment potential grounds for arrest. Instead of allowing police to detain persons whose “activity proves dangerous for public security and order,” the amended law allows them to detain anyone “who gives reason to believe that his behavior constitutes a threat to security and public order.” The PS explains that this allows police to target “people who attracted the attention of police or intelligence services by their behavior, friendships, statements, or plans.”

The implications of these proposals are immense. To arrest and detain someone, police will have to do no more than assert that they believe that this person might conceivably disturb public order at some future time, based on something this person said or posted on social media, or on someone with whom he associated.

A statement suggesting sympathy with calls for strike action against a wage cut or factory closure, for a protest against war, or for any number of legal activities would be grounds for detention and house arrest.

It is worth recalling that the law the PS is now proposing to expand was drafted in 1955 to provide the legal framework for France to carry out mass torture and repression in a failed attempt to crush the Algerian people's struggle for independence in the 1954-1962 war against French colonial rule. This brutal war cost the lives of between 250,000 and 400,000 Algerians. It anticipated and fed into deep social tensions within France that erupted in the general strike of May-June 1968.

The current moves to effectively dismantle democratic rights in France are motivated by a similar crisis of class rule. First, as its ultimately unsuccessful attempt to ban last year's Gaza war protests showed, the PS government is desperate to suppress all opposition to the militarist policies of French imperialism. In the aftermath of the Paris attacks, Hollande has moved rapidly to expand France’s bombing campaign in Syria, part of the efforts of the French ruling class to assert its interests on a world stage.

Second, bourgeois democracy can no longer handle and adjudicate the immense and increasingly uncontrollable social tensions of contemporary capitalist society. In all of the advanced capitalist countries, including France, the state is controlled by tiny, super-wealthy elites who view rising discontent among broad masses of workers with hatred and fear.

The Hollande government epitomizes the domination of the financial aristocracy. Elected on promises that “austerity was not our destiny,” Hollande soon proved to be a pro-austerity politician presiding over surging unemployment and a “zero growth” economy.

The PS turned to a strategy of trying to divert social opposition to reactionary domestic policies by means of a foreign policy based on militarism and war. As Hollande launched a war in Mali in 2013, one official told Le Point that the PS hoped it would be their version of British Prime Minister Margaret Thatcher's Falkland Islands war: a “military adventure that ensured her re-election in 1983.” Wars across France's old colonial empire, however, have only contributed to the growing social tensions within France.

The political dynamic in France is mirrored in every major capitalist country. Since the “war on terror” began in 2001, governments throughout the world, led by the United States, have sought to erode and dismantle basic democratic rights. They have participated in the “extraordinary rendition” of prisoners for torture, mass warrantless wiretapping and extra-judicial drone murder. The domestic deployment of heavily-armed military units is now common.

From the police suppression of the 2011 youth riots in London to last year’s heavily-armed crackdown on protests against the police killing of Michael Brown in Ferguson, Missouri, these measures are ever more clearly directed at the suppression of class struggle.

There is virtually no constituency for the defense of democratic rights within the political or corporate establishment. That task falls to the working class, which retains a deep commitment to democratic principles. However, there is no room for political complacency. The ruling class is moving very far with dictatorial measures to deal with internal crises for which it has no solution.

The defense of democratic rights and opposition to police-state forms of rule must be rooted in the independent political mobilization of the working class, based on a struggle against imperialist war and social inequality and their source in the capitalist system.

New genetic data show “Back to Africa” migration in Neolithic times

Philip Guelpa

Newly reported human DNA from a cave in Ethiopia supports previous evidence that a major migration of Eurasians back to Africa occurred sometime between 3,000 and 4,000 years ago (Llorente et al., “Ancient Ethiopian genome reveals extensive Eurasian admixture throughout the African continent,” Science, 12 October 2015). The study by an international team of 19 researchers was based on a genetic sample from a human skeleton, the remains of a hunter-gatherer man, found in a cave, known as Mota, in highland Ethiopia.

The man lived approximately 4,500 years ago, based on radiocarbon assay. Genetic analysis demonstrated that “Mota Man” was closely related to the modern Ari population living in the same area. The particular importance of this find is that it yielded no indication of Eurasian genetic admixture. It lacks 4 to 7 percent of the genetic material found in modern Ari. This result provides firmer dating for previous evidence that a significant “backflow” of people into Africa occurred after the original “Out of Africa” migration of modern humans more than 40,000 years ago.

Until now, the study of ancient human DNA has largely been restricted to samples from temperate and Arctic regions, due to the generally poorer preservation of the molecule in hot and humid climates. Consequently, the genetic history of humans in Africa has, heretofore, had to rely on extrapolations based on the characteristics of very recent populations. The Mota specimen, recovered from a dry, high-altitude cave, retained its DNA and thus affords a datable “baseline” for geographic and chronological comparisons.

It has long been known that Neolithic farmers from the Near East and Anatolia, where agriculture had developed following the end of the last glacial period, roughly 10,000 years ago, had moved into Europe around 8,000 years ago. It was also known that a similar migration had taken place into Africa, based on the presence of Eurasian genes in modern African populations. However, the timing and scale of this movement were poorly understood.

By using the DNA from the Mota specimen, which had no indication of Eurasian genes, researchers drew the conclusion that the backflow had to have occurred later than its age of 4,500 years ago, thus supporting the previous estimates for this migration event dated back to between 4,000 and 3,000 years ago.

In addition, the researchers conducted further genetic studies on contemporary African populations. This analysis demonstrates that, although the Eurasian admixture was greatest in East Africa (i.e., closest to the Near East), it reached all the way into western and southern Africa as well. Furthermore, they found that the genetic contribution from the immigrants overall was greater than had previously been thought. Even relatively isolated African populations, such as the Yoruba and Mbuti, had 7 percent and 6 percent Eurasian admixture, respectively.

This new evidence complicates the use of modern African genomes as a “baseline” to define the ancestral genetic makeup of modern humans. Africa was the “cradle” of anatomically modern humans, at least 80,000 to 100,000 years ago. They began to migrate into Eurasia more than 40,000 years ago. Subsequent population movements within Eurasia are known to have taken place, based on archaeological, genetic, and linguistic data.

Among the principal motivators of such migrations was the development of agriculture in the Near East, Southeast Asia, and elsewhere. The growing populations permitted by farming would have, over time, prompted territorial expansion in the search for additional fertile land, subsuming or displacing resident hunter-gatherers or those with less productive agricultural practices in Europe, interior Asia, and Africa.

The new findings do not necessarily indicate that Eurasian individuals themselves spread across the whole of Africa. More likely, the actual movement of people was confined to the northeastern part of the continent, where the highest proportions of Eurasian genes are found. Subsequent internal migrations or interactions between resident populations would have spread the new genes to the rest of the continent. However, the relatively high proportion of foreign genetic material even in the farthest reaches of Africa implies the movement of large numbers of individuals. This process may also have spread new agricultural crops, though agriculture was already being practiced there.

In recent years, DNA analysis has demonstrated that as modern humans moved into Eurasia they intermingled with resident populations, including Neanderthals. Modern Eurasians contain a small component, 2 to 3 percent, of Neanderthal DNA, while modern Africans were said to have none. The research by Llorente and his colleagues found that there is, in fact, a minute, yet detectible percentage of Neanderthal genetic material present in post-reflux African populations. This further supports the interpretation that some modern humans, having spent time in Eurasia and intermingling with the existing populations there, returned to Africa and contributed genetically to the modern population of that continent.

Using a single genetic sample to characterize the modern human African genome prior to the Eurasian “reflux” should be viewed with some caution. The authors recommend that even earlier African genetic samples should be sought to further elucidate the history of ancient human migrations.

In addition to its valuable scientific contribution, these new data and analysis reinforce the understanding of the overwhelming genetic unity of modern humans. From the beginning of the genus Homo, adaptation to new environments, increasingly permitted by technological and other cultural innovations, has led humans to move across the landscape and eventually populate the globe. The movement of populations and the genetic intermixing that inevitably followed were accelerated by the development of agriculture. The Mota study is a reminder that this movement did not take place only in one direction or at a single time.

The relatively minor genetic diversity that exists among humans in modern times is merely a momentary “snapshot,” a slice in time, which is the result of millennia of mixing and remixing of populations, a mosaic produced by the dialectic of stability and change. The variations in skin color and other superficial characteristics we currently observe are far outweighed by this fundamental genetic unity.

This new study once again demonstrates that racist ideas alleging the existence of significant biological and intellectual differences between different human populations, supposedly based on long-standing genetic differentiation, have no scientific support.

The “Great Recession” and the deepening austerity drive

Nick Beams

A comment by Financial Times economic columnist Martin Wolf published November 11 points to the depth of the downturn in world economic output resulting from what he calls the “Great Recession” that followed the global financial crisis of 2008.

According to Wolf, a “recovery” is now underway but “only in a limited sense.” Just how limited and whether it can even be called a “recovery” in any meaningful sense is highlighted by the global economic trends to which he points.

While most crisis-hit countries are now showing positive growth rates, he writes, gross domestic product “remains far below what might have been expected from pre-crisis trends.” He continues: “In most cases, growth has not recovered, mainly because of declines in productivity growth. In the euro zone, GDP was still below pre-crisis levels in the second quarter of 2015. In crisis-hit members, a return to pre-crisis output is still far away. They will suffer lost decades.”

This analysis underscores two decisive conclusions: the crisis of 2008 was not a conjunctural downturn, but a breakdown in the functioning of the capitalist economy; and the measures implemented by governments and central banks, with the claim that they would promote “recovery,” have failed completely. In fact, as research cited by Wolf in his comment makes clear, they have exacerbated the slump.

Wolf draws attention to a survey conducted by Professor Laurence Ball of Johns Hopkins University, who found that losses of potential output ranged from zero in Switzerland to more than 30 percent in Greece, Hungary and Ireland.

Summing up Ball’s results, Wolf writes: “In aggregate, he concludes, potential output this year was thought to be 8.4 percent below what its pre-crisis path would have predicted. This damage from the Great Recession is… much the same as if Germany’s economy had disappeared.”

As is always the case with comments by Wolf, while he can perceptively point to significant trends in the global economy and bring to light certain relevant facts, as an ardent defender of the profit system he never goes so far as to suggest that these phenomena are the result of inherent contradictions within the very structure of the capitalist economy. Consequently, he always maintains that there is some way out if only more rational policies are followed. And when what he sees as necessary remedies are not applied, he attributes this to failure of either the will or the intellect.

Addressing the question of the euro zone, which seven years after the Lehman Brothers collapse still has not returned to pre-crisis output levels, he insists that its governments and financial authorities “should have done better” and that even today Europe “lacks the will and the institutions it needs.”

Why such measures have not been developed is never probed. This is because any such examination would raise the question of whether the present policy outcomes are not the result of the “lack of will” to pursue more effective measures, or some kind of mistake, but are, in fact, the expression of another agenda which is being assiduously implemented.

Despite all the evidence to the contrary, Wolf maintains that it “might be possible to return to pre-crisis trend rates of growth” and that a mix of “aggressive support for demand and contributions to long term supply,” via far higher levels of public investment, would work both to increase output levels and restore growth rates to their previous trend.

He points to evidence that “festering recessions have prolonged effects on prosperity,” and adds that “one conclusion is that it is vital to act swiftly to restore demand.” But the question as to why government and economic authorities around the world have proceeded in the opposite direction—cutting spending on health, education, pension and other vital social services and refusing to undertake public investment spending—is never examined.

The impact of government spending cuts on economic growth is highlighted in a 2014 paper co-authored by former US Treasury Secretary Lawrence Summers and Antonio Fatás, cited by Wolf. Since then, Summers has advanced the proposition that the world economy is not experiencing a conjunctural downturn, but has entered a period of what he calls “secular stagnation,” akin to that of the 1930s.

The 2014 paper details the predominant downtrend in the world economy, particularly in the euro zone, where, relative to the situation in 1999 when the euro was launched, GDP is below where it would have been had the trend at that time been maintained. The International Monetary Fund estimates that by 2019, the euro area will be 15 percent below the level of output that would have existed had pre-crisis growth continued.

The Summers-Fatás analysis examines the persistent overestimation of IMF growth forecasts compared to the actual outcomes since 2008 and notes that if the “deviations were… transitory, we would expect the forecast error to decrease over time as output returns to trend.”

But, in fact, there is a “very large amount of persistence” in the forecast errors for all advanced economies, suggesting that the first shock—the crisis of 2008—continued its propagation and “became permanent.”

The authors conclude that government programs of “fiscal consolidation”—the reduction of government spending for the purpose of decreasing debt—lowers growth, creating a “negative feedback loop” where the more that spending is cut and the sharper the fall in output, the more the debt to GDP ratio rises, leading to a push for even more spending cuts. There is “strong support for the notion that austerity policies not only have caused significant temporary damage to growth, but that they might have resulted in exactly the opposite outcome that they were seeking by permanently reducing output.”

They maintain that countercyclical fiscal policy should have been “more aggressive given the nature and persistence of the crisis.” In other words, instead of government spending being cut, it should have been increased.

But the same question arises here as with Wolf. Why were such policies not carried out from the beginning, and, furthermore, why, when the damaging impact of government cuts has now been definitively established in facts and figures, has the austerity agenda not been reversed?

The answer to these questions lies in a probing of some of the basic features of the capitalist economy, which none of the “critics” of the present agenda undertake, as they seek to promote the illusion that the deepening breakdown can be halted if only more enlightened policies are followed.

The Summers-Fatás paper indirectly points to the direction in which such an analysis must proceed. The authors note that from early 2007, GDP growth in many advanced economies began to slow. This trend was increasingly evident by the end of the year before it turned into recession in 2008, which deepened in 2009.

However, these trends were the outcome of processes that went further back. The analysis of bourgeois economists focuses on shifts in output measured by GDP. But the driving force of the capitalist system is not economic growth as such, but the accumulation of profit, and, in particular, the return on capital as measured by the rate of profit.

While profit rates tended to rise during the decade of the 1990s, they had started to turn down towards the end of the decade, resulting in a recession in the US in 2001. The interest rate cuts initiated by the US Federal Reserve provided a temporary boost, helping to fund a cheap-money boom in the first half of the decade both in the US and globally, such that the IMF recorded that world growth in 2006 was at its highest level since the early years of the 1970s.

But the downward pressure on profits, which had led to cuts in productive investment in the real economy and an increasing resort to financial speculation, was not overcome. Consequently, when the orgy of speculation exploded in 2008, it did not give way in due course to an upturn, but resulted instead in growing stagnation, outright recession and further financial crises as took place in Europe in 2012.

Placed within this context, the essential class logic of the spending cuts, attacks on wages and social conditions and the incessant demands for labour market “restructuring” becomes clear. Viewed from the standpoint of the process of profit accumulation—the driving force of the capitalist economy—government spending on social services, as well as increases in real wages, represent a drain on the wealth that would otherwise be available to capital in the form of profit, and must be driven down.

In other words, the ongoing and deepening austerity programs being pursued by governments around the world are not some irrational response to the crisis, or the product of intellectual failure, lack of will or any of the other reasons advanced by Wolf, Summers and other would-be critics. Rather, they are an expression of the remorseless class logic of the capitalist economy, where, as Marx put it so clearly, the accumulation of wealth at one pole depends on the accumulation of poverty, misery and degradation at the other.

Widespread fraud in Haitian presidential vote

John Marion

On November 5, Haiti’s Provisional Electoral Council (Conseil Electoral Provisoire, CEP) announced the results of the first round of presidential elections on October 25. Jovenel Moïse, the candidate of President Michel Martelly’s PHTK, placed first with slightly less than 33 percent of the vote. Jude Célestin of LAPEH (la Ligue Alternative pour le Progrès et l’Emancipation Haïtienne) placed second with slightly more than 25 percent.

A run-off election between Moïse and Célestin is scheduled for December 27. Nonetheless, the results and allegations of widespread fraud led to protests by thousands in the streets of Port-au-Prince last week, along with violence in at least two northern towns.

Ten thousand Haitian police and 2,500 MINUSTAH (United Nations Stabilization Mission in Haiti) personnel were deployed during the October 25 voting, and both MINUSTAH and the United Nations Office for Project Services (UNOPS) were involved in the transportation of ballots for tallying in Port-au-Prince.

Voter turnout was very low. The CEP reported approximately 1.54 million valid votes, less than 30 percent of total registered voters. Moïse won less than 9 percent of all registered voters.

There were 54 presidential candidates, significantly more than the 34 who ran in the 2010 election. In all, 128 parties took part in this year’s campaigning, which includes municipal and legislative elections.

Seven presidential candidates have demanded an independent investigation of the voting results, but only two—Dr. Maryse Narcisse of Fanmi Lavalas and Vilaire Cluny Duroseau of MEKSEP—have filed official challenges. A decision on those challenges was expected on Sunday. Célestin himself was forced out of the second round of the 2010 presidential elections in favor of Martelly, after the intervention of Hillary Clinton and the Organization of American States.

Martelly, along with his wife, son and top advisers, have relentlessly used the presidency for fraud and other crimes. In a July 2013 incident, Jean Serge Joseph, the judge in a corruption case against Martelly’s wife and son, was called to a meeting in which he was interrogated by the president, prime minister and minister of justice. Joseph suffered a massive brain hemorrhage at the meeting and died two days later. An investigation of the incident by a committee of the Haitian Senate concluded that the hemorrhage was a result of intense psychological pressure put on the judge by the other attendees, and that they had built a “fortress of lies” afterward.

While the Haitian Constitution does not allow Martelly to run for a second consecutive term, his disdain for democratic processes is reflected in the name of his political formation, the Parti Haitien Tet Kalé (PHTK). “Tet Kalé” means “Bare Head” in Haitian Creole, and is Martelly’s longstanding nickname. Moïse, the PHTK candidate, was a businessman with no political experience before this campaign and was handpicked by Martelly.

The October 25 voting was rife with fraud. The CEP disallowed tallies from 490 voting places for reasons including more votes than registered voters, irregularities in the use of national identity cards (CINs), discrepancies between the number of ballots and people who voted, and alteration of ballots.

In Haiti, each political party is issued passes for mandataires—its own observers—in each of the country’s 13,725 polling places. A person possessing a mandataire pass can vote wherever they are, without their national identity card being checked against the voter list.

A total of 916,000 mandataire passes were issued for these elections, but many of the political parties did not have the resources to send an observer to each polling place. As a result, the cards were bought by better-funded parties that needed votes. Marie Yolene Gilles of the National Network for the Defense of Human Rights (Réseau National de Défense de Droits Humains, RNDDH) told the Miami Herald that the cards were selling for as much as $30 apiece before the elections, and $3 apiece the day of.

A January 2014 Haitian election law allows for political parties to be formed by as few as 20 people, while at the same time assuring government control by requiring that parties file detailed statements of policy and goals, along with a notarized list of the names, national identity card numbers, and addresses of the members. The US Center for Economic and Policy Research has reported that at least 12 of this year’s political parties are proxies for the government, established to distract and confuse voters.

Antoine Rodon Bien-Aimée, a parliamentary deputy who is rumored to have switched from Martelly’s PHTK to Célestin’s LAPEH, accused UNOPS of adding to the fraud by switching out ballots as they were transported to Port-au-Prince. The UN has adamantly denied the accusation, while the Miami Herald reported it as a case of mistaken identity. According to the Herald, the person involved—Sylvain Coté—was a photographer with a name similar to the UN staffer’s.

On Wednesday, Thursday and Friday of last week thousands of people took to the streets of Port-au-Prince to protest the announced results. Protests were called by LAPEH, Fanmi Lavas, and the Pitit Desalin party of Moïse Jean Charles. Video of police beating a protester has gone viral, with the head of the Haitian National Police (PNH) issuing a threadbare promise of an investigation into the incident.

Violent protests have occurred in the northern town of Limbé, while barricades of burning tires went up in the streets of Trou-du-Nord, Jovenel Moïse’s hometown. The Haiti Sentinel reported that the Trou-du-Nord protesters are opposed to Moïse, who benefitted from massive fraud in that location.

The elections are occurring against the backdrop of Haiti’s desperate poverty, increasing inflation rate, and government graft. Transport workers, supported by students at the State University of Haiti (l’Université d’Etat d’Haiti, l’UEH), called a two-day strike beginning Monday, November 9 after the government announced increases of up to 450 percent for the cost of a driver’s license (depending on category), the doubling of the cost of a passport, and an increase in the cost of a tax ID from the equivalent of US$3 to US$20. The government had also announced an increase in the perks given to former government ministers and secretaries.

Faced with the strike, the government backed down on these measures and the strike ended at midday. Nonetheless, students lit tires on fire in the streets and threw rocks. Students from the UEH law school demanded government action to improve living conditions for the population and against increased taxes, according to Le Nouvelliste. They were confronted with tear gas from the CIMO corps of the riot police.

Riot and Responsibility: Governance in Sri Lanka

Asanga Abeyagoonasekera

One of the greatest Buddhist monks of Sri Lanka, Most Ven Maduluwawe Sobitha, who spoke fearlessly to overthrow the previous Government to usher in a better political order, has passed away. The entire nation mourns the loss of this great human being. In his speech at the book launch of this author’s “Towards a better world order,” a clear statement was made: “politics in Sri Lanka is a direct ticket to hell.” 

The first serious shock to the new Government was the resignation of the Minister of Law and Order Hon Thilak Marapana over an issue about Avant Garde, a floating armoury. While political stability should remain a priority, looking at the present state of the economy, Sri Lanka should spend time working towards the economic vision indicated by Prime Minister in his economic policy statement. 

In Colombo, 39 students from the Higher National Diploma in Engineering (HNDE) were arrested after an intense battle with the police. The student protest was to reinstate their Higher National Diploma to a B Com degree for recruitment and promotion purposes as well as a few other demands against privatisation of education, increasing levels of university intake, and upgrading existing infrastructure. All these demands could have been discussed and peacefully worked out but unfortunately it turned to a violent police attack. The opposition and some members supporting the 18th Amendment are now requesting the National Police Commission to investigate the incident. It was the present Government that re-installed the independent commissions that were Government scrapped by the previous. 

It is important that the Government address the student issues. Unfortunately, the Education Ministry’s portfolio is split across many Ministries and due to this it will be difficult to take policy measures. The university student intake would be increased to 40,000 and this should be increased further with adequate infrastructure. Producing the best competent graduates that could contribute to the economy should be the priority just as the example of Singapore which invested heavily to create a world-class labour pool during the time of Prime Minister Lee Kuan Yew. Investment in education and R&D is essential as a nation and getting the right education policy to introduce a single qualifications authority to certify this is essential. Most students that graduate are not qualified for jobs or have an opportunity as graduates to find work. These challenges have to be addressed by the government as student unrest can lead to serious complications if unheard. Sri Lanka has previously faced two insurrections before as a nation in 1971 and 1989.  

The gruesome pictures from the protest were available in all social media. This is a significant negative blow to the country and the administration that promised to introduce good governance. Some comments from media were a re-visit to the past regime. However, authorities have now taken measures to address the issue. 

Sri Lanka with its new administration needs to fix many areas in the economy, ignored by the previous Government. As a nation Sri Lanka is the only South Asian country that has moved to stage 2 - an efficiency-driven economy - this year according to the Global Competitiveness Index report. All others are in Stage 1 – factor-driven - or in transition to stage 2. This shows that Sri Lanka has done comparatively well with other South Asian countries to improve the basic factors of the economy. It is time to start competing with the East Asian economies, as it should aim to achieve a per capita of US$ 8000 in 2020. For this several wheels of the economy need to be strengthened. 

Value-added exports need to be increased from the existing low percentage to a higher value. Sri Lanka should aim to map as a regional financial centre such as Singapore and Dubai, to be planned out by Finance Ministry. Improving university infrastructure and providing space to more students to get a world-class education is a priority. The recommendations from Chamber, IPS and all top think-tanks in the country and outside need to be carefully looked at and considered. 

After more than a decade, there will finally be high-level political representation with the Sri Lankan Prime Minister present at Davos 2016. This is a great opportunity for him to spell out the new Government’s economic policy to win investment and build confidence. The first top-level foreign conference Daw Aung San Suu Kyi attended after being in house arrest was the World Economic Forum in East Asia where she clearly spelled out her political vision for the people of Myanmar. This author was honored to meet her in person at the conference where she shared her view on the importance of national reconciliation in Sri Lanka after a three-decade war. 

When a fearless voice dies, another is elevated to victory. The late great priest Ven. Sobitha Thero and the force of Daw Aung San Suu Kyi, and their desire for change is what helps instill good governance in their own societies.

The mergers boom, the financial oligarchy and imperialism

Andre Damon

According to press reports Thursday, the drug makers Allergan and Pfizer are in the advanced stages of talks to merge and form the world’s largest pharmaceutical company, a $330 billion giant that will be based in Ireland and pay next to no income tax.

The merger, which would be the largest so far this year, is only the latest in a wave of corporate mergers and acquisitions that is expected to make 2015 a record year for takeovers, eclipsing the $3.4 trillion in deals made in 2007, the year before the Wall Street crash.

The Allergan-Pfizer announcement came the day after the Walgreens pharmacy chain announced plans to buy competitor Rite Aid in a deal valued at $17.2 billion. The resulting company would control 41 percent of the US pharmacy market, with competitor CVS controlling another 58 percent. All other companies combined would account for a mere 0.6 percent.

This is only the latest in a record year for health care mergers, including the $54.2 billion purchase of health insurer Cigna by its rival Anthem, and the $37 billion takeover of Humana by Aetna. As a result of these mergers, the five largest health insurers in the US were consolidated into three in a matter of weeks.

A central motive in the Walgreens/Rite Aid and Allergan/Pfizer mergers was increasing pricing power by further monopolizing the market. The transformation of the US pharmacy market into a duopoly will have a dramatic upward impact on drug prices paid by consumers.

The growing monopolization of the health care field has contributed to soaring costs in the United States. In 2013, the last year for which data is available, the price of top brand name prescription drugs increased by 12.9 percent, eight times faster than the rate of inflation.

These mergers, far from expressing economic health and “dynamism,” reflect the economic rot at the heart of global capitalism. Record merger activity in 2015 goes hand in hand with the lowest level of global economic growth since 2008-2009.

In the most immediate sense, these mergers are the response of corporations, driven on by the demands of Wall Street for ever-bigger payouts, to conditions of reduced demand amid a global slump and the collapse of workers’ incomes.

The wave of mergers, along with record stock buybacks and other completely parasitic activities, are facilitated by the policies of the world’s central banks, led by the Federal Reserve, which have kept interest rates near zero and injected trillions of dollars into the financial markets through bond purchases, dubbed “quantitative easing.”

Far from using the funds pumped into the financial system for productive investment, major corporations are sitting on a record cash hoard of $1.4 trillion, which they are using to buy back shares (further inflating stock prices and the portfolios of the rich and the super-rich), boost executive pay, and carry out mergers and acquisitions.

The mergers, while generating bumper profits for investors and huge payouts to corporate executives, generally lead to layoffs, wage cuts, speedups and the shutdown of plants and retail outlets. Such financial parasitism is the process by which finance capital boosts profits by cannibalizing the productive forces of society.

While these processes have accelerated in the aftermath of the 2008 financial crash, they have been ongoing for decades, resulting in a social disaster for ever-broader sections of the working class. Millions of American workers have been reduced to a state of semi-penury, with 40 percent making less than $20,000 per year.

Abject social misery is coupled with fantastic levels of wealth. To cite just one example, the hedge fund mogul Kenneth Griffin of Chicago-based Citadel LLC, who made $1.3 billion last year, has gone on a real estate spending spree, lavishing some $300 million on properties in three cities, including three full floors at the condo tower under construction at 220 Central Park South, which he purchased for $200 million, a record for New York City real estate.

Economic and political life in the United States and indeed the whole world is dominated by the parasitic and money-mad financial oligarchy that Griffin embodies. The policies of global central banks and major capitalist governments have had as their sole aim to protect and increase the wealth of this financial elite and to subsidize their plunder of man’s resources all over the world for their own personal fortunes.

These are characteristics that the Russian revolutionary and theoretician Vladimir Lenin identified at a much earlier stage of their development. In his 1917 masterwork, Imperialism, the Highest Stage of Capitalism, Lenin explained that the tendency toward financial parasitism, monopoly, dictatorship and war are not simply the result of subjective policies chosen by political leaders, but an expression of the fundamental tendencies of capitalism in its period of decay and morbidity.

Lenin wrote, “Political reaction all along the line is a characteristic feature of imperialism,” defined by “corruption, bribery on a huge scale and all kinds of fraud.” The domination of the banks over all aspects of social life finds political expression in the erosion of democratic rights at home. “Finance capital strives for domination, not freedom.”

There is a connection between the criminal character of this financial aristocracy and the criminal character of foreign policy. The war at home against US workers mirrors the predatory wars launched by the US against the people of the Middle East and Africa. Used to speculative gambling to make its billions, the financial elite turns to geopolitical “risk-taking” and homicidal recklessness in its international policy.

But the corollary of Lenin’s theory, proven in the subsequent history of the 20th and 21st centuries, is that imperialism is the epoch of not only reaction and war, but also of revolution. Now, as the fundamental characteristics of capitalism express themselves in the most naked form, the consequent sharpening of class antagonisms will lead inevitably to revolutionary upheavals.

Capitalism and mortality: Death rate soars for middle-aged US workers

Joseph Kishore

A study published this week in Proceedings of the National Academy of Sciences documents a sharp rise in the mortality rate for white, middle-aged working-class Americans over the past fifteen years. The report’s authors are Nobel laureate Angus Deaton and Anne Case, both economists at Princeton University.

Their calculations show that the rising death rate since 1999 for this segment of the population translates into 96,000 more deaths than if the mortality rate had remained flat. Had the rate continued on its declining trajectory for the period 1978-1998, the authors state, there would be 500,000 more people alive today in the United States.

“Only HIV/AIDS in contemporary times has done anything like this,” commented Deaton.

The increase in the mortality rate is due mainly to a dramatic rise in the rate of deaths from suicide, drug abuse and alcoholism—all expressions of social and personal crisis.

Dr. Case and Dr. Deaton found that the overall mortality rate (measured as the number of deaths each year) for white, non-Hispanic adults between the ages of 45 and 54 increased by 34 per 100,000 between 1999 and 2013. For those with a high school education or less, the rate increased by 134 per 100,000 (reaching 735.8 per 100,000) over this same period. This is a rise of 22 percent. In the study, education level served as an approximate stand-in for income level.

The increase in mortality for middle-aged white Americans with a high school education or less is attributed to: poisonings (including drug overdoses), which rose from 13.7 to 58.0 deaths per 100,000 (an increase of 400 percent); suicide, which rose from 21.8 to 38.8 deaths per 100,000 (an increase of 78 percent); and chronic liver cirrhosis (caused by alcoholism), which rose from 26.7 to 38.9 per 100,000 (an increase of 46 percent).

The authors also document the growth of morbidity, or ill health, within this social layer, showing that reports of good health fell, while reports of physical pain, psychological distress and poor health rose sharply.

The study confirms and provides additional substantiation for the conclusions of previous reports, including one from September of this year that found a dramatic decline in life expectancy for poorer middle-aged Americans.

Behind these figures lies an immense social retrogression and sharpening of class divisions. They reflect a catastrophic decline in the social position of the working class resulting from the protracted decay of American capitalism and a relentless, decades-long assault by the ruling class on all of the past social gains achieved in the course of a century of bitter class struggle.

While white workers, particularly white men, are routinely denounced as “privileged” by the pseudo-left proponents of racial and gender politics, they have seen perhaps the most dramatic reversal in their conditions of life. Middle-aged blacks still have a higher mortality rate than whites, but the difference between the two groups is closing rapidly.

Consider the experiences of the age group involved. A worker aged 50 in 2013 was born in 1963, at the height of the postwar economic boom. He or she would have reached employment age around 1980, the onset of a ruling-class offensive aimed at driving down workers’ wages and living standards and dismantling social services and public infrastructure. With the “deindustrialization” of America, huge swaths of industry were shut down, working-class cities were devastated, and millions of decent-paying jobs were wiped out.

This social counterrevolution has only accelerated under the Obama administration in the years since the financial crisis of 2008. The Wall Street crash of that year, triggered by the greed and criminality of the financial elite, has been utilized by that same financial aristocracy to strengthen its control over every aspect of social and political life in the United States.

The number of manufacturing jobs in the United States peaked at 19.5 million in 1970, falling to 17.4 million in 1999 and collapsing to just over 12 million by 2013. The share of working-age men between the ages of 25 and 54 who are not working has tripled since the late 1960s. Those jobs that are available pay less and less. Households headed by someone with a high school education or less have seen a 19 percent decline in their inflation-adjusted income.

Immense resources have been diverted into financial speculation, with the stock market becoming the primary mechanism for redistributing wealth from the poor to the rich. The share of national income going to the top one percent has nearly tripled, increasing from about 8 percent in the 1960s and 1970s to more than 20 percent today.

The consequences have been disastrous for predominantly African American cities such as Detroit, but the most concentrated growth of poverty in recent years has occurred in the suburbs—an increase of 64 percent from 2000 to 2011, according to one study.

Workers who are now middle-aged have experienced an unending decline in living standards. They have had their homes taken away, their retirement and health benefits gutted, their life savings wiped out. Millions are drowning in debt, exhausted by overwork or scraping by on unemployment, often unable to provide for their families and facing the permanent stress of economic insecurity. The “American dream” has become the American nightmare.

The organizations through which workers previously resisted the dictates of the corporations have collapsed. The trade unions have become labor syndicates, serving as a police force for the corporations to suppress the class struggle and impose mass layoffs, wage cuts and speedup. Under these conditions, the anger and frustration of workers, unable to find any organized expression, have in many cases been turned inward and taken personally and socially destructive forms.

This, however, is not a permanent state of affairs. The increase in mortality for large sections of the American population testifies to the failure of the capitalist system and the bankruptcy of all of its agencies, including the official unions. The objective crisis of capitalism is already giving rise to a growth of social opposition and anti-capitalist sentiment, which will inevitably find expression in a new upsurge of class struggle.

That the ruling class has nothing to offer to address the spiraling social crisis is reflected in the lack of serious attention paid to the shocking findings of the Princeton economists. In an earlier period, they would have been treated as a national disgrace.

Today, the Democrats and Republicans compete with each other in slashing social programs. A decline in life expectancy is seen as a positive good by a ruling class that is determined to cut spending on health care and pensions in order to finance an ever-expanding stock market bubble.

Under capitalism, society is marching backwards. The only social force that can reverse this counterrevolution is the working class. The growing sentiment of anger and opposition must assume an organized, political and revolutionary form. The turn is to socialism and the building of the revolutionary leadership, the Socialist Equality Party, required to lead the struggle for the socialist transformation of society.

Washington prepares for World War III

Patrick Martin

The US military-intelligence complex is engaged in systematic preparations for World War III. As far as the Pentagon is concerned, a military conflict with China and/or Russia is inevitable, and this prospect has become the driving force of its tactical and strategic planning.

Three congressional hearings Tuesday demonstrated this reality. In the morning, the Senate Armed Services Committee held a lengthy hearing on cyberwarfare. In the afternoon, a subcommittee of the House Armed Services Committee discussed the present size and deployment of the US fleet of aircraft carriers, while another subcommittee of the same panel discussed the modernization of US nuclear weapons.

The World Socialist Web Site will provide a more detailed account of these hearings, which were attended by a WSWS reporter. But certain preliminary observations can be made.

None of the hearings discussed the broader implications of the US preparations for war, or what a major war between nuclear-armed powers would mean for the survival of the human race, and even of life on our planet. On the contrary, the hearings were examples of what might be called the routinization of World War III. A US war with China and/or Russia was taken as given, and the testimony of witnesses and questions from senators and representatives, Democrats and Republicans alike, concerned the best methods for prevailing in such a conflict.

The hearings were component parts of an ongoing process. The witnesses referred to their past writings and statements. The senators and representatives referred to previous testimony by other witnesses. In other words, the preparations for world war, using cyber weapons, aircraft carriers, bombers, missiles and the rest of a vast array of weaponry, have been under way for a protracted period of time. They are not a response to recent events, whether in the South China Sea, Ukraine, Syria or anywhere else.

Each of the hearings presumed a major US conflict with another great power (sometimes unnamed, sometimes explicitly designated as China or Russia) within a relatively short time frame, years rather than decades. The danger of terrorism, hyped incessantly for the purposes of stampeding public opinion, was downplayed and to some extent discounted. At one point in the Senate hearing on cyberwarfare, in response to a direct question from Democrat Jeanne Shaheen of New Hampshire, the panel witnesses all declared that their greatest concern was nation-states, not terrorists.

One of the witnesses at that hearing was Dr. Peter W. Singer, listed as a “Strategist and Senior Fellow” for New America, a Washington think tank. He titled his presentation, “The Lessons of World War 3.” He began his prepared statement with the following description of that imagined conflict:

“US and Chinese warships battle at sea, firing everything from cannons to cruise missiles to lasers. Stealthy Russian and American fighter jets dogfight in the air, with robotic drones flying as their wingmen. Hackers in Shanghai and Silicon Valley duel in digital playgrounds. And fights in outer space decide who wins below on Earth. Are these scenes from a novel or what could actually take place in the real world the day after tomorrow? The answer is both.”

None of the hearings saw any debate about either the likelihood of a major war or the necessity of winning that war. No one challenged the assumption that “victory” in a world war between nuclear-armed powers is a meaningful concept. The discussion was entirely devoted to what technologies, assets and human resources were required for the US military to prevail.

This was just as true for the Democratic senators and representatives as for their Republican counterparts. By custom, the two parties are seated on opposite sides of the committee or subcommittee chairmen. Without that arrangement, there would be no way of detecting, from their questions and expressions of opinion, which party they belonged to.

Contrary to the media portrayal of Washington as deeply divided between parties with intransigently opposed political outlooks, there was bipartisan agreement on this most fundamental of issues, the preparation of a new imperialist world war.

The unanimity of the political representatives of big business by no means suggests that there are no obstacles in the path of this drive to war. Each of the hearings grappled, in different ways, with the profound crisis confronting American imperialism. This crisis has two major components: the declining economic power of the United States compared to its major rivals, and the internal contradictions of American society, with the deepening alienation of the working class and particularly the youth.

At the House subcommittee hearing on aircraft carriers, the chairman noted that one of the witnesses, a top Navy admiral, had expressed concern over having “an 11-carrier navy in a 15-carrier world.” There were so many challenges confronting Washington, he continued, that what was really needed was a navy of 21 aircraft carriers—double the present size, and one that would bankrupt even a country with far more resources than the United States.

The Senate hearing on cybersecurity touched briefly on the internal challenge to American militarism. The lead witness, retired Gen. Keith Alexander, former director of the National Security Agency and former head of the Pentagon’s CyberCommand, bemoaned the effect of leaks by NSA contractor Edward Snowden and Army private Chelsea Manning, declaring that “insider attacks” were one of the most serious threats facing the US military.

Democratic Senator Joe Manchin of West Virginia asked him directly, referring to Snowden, “Should we treat him as a traitor?” Alexander responded, “He should be treated as a traitor and tried as such.” Manchin nodded heartily, in evident agreement.

While the witnesses and senators chose to use the names of Snowden and Manning to personify the “enemy within,” they were clearly conscious that the domestic opposition to war is far broader than a few individual whistleblowers.

This is not a matter simply of the deep-seated revulsion among working people in response to 14 years of bloody imperialist interventions in Afghanistan, Iraq, Somalia, Libya, Syria, Yemen and across North Africa, important as that is.

A war between the United States and a major power like China or Russia, even if it were possible to prevent its escalation into an all-out nuclear exchange, would involve a colossal mobilization of the resources of American society, both economic and human. It would mean further dramatic reductions in the living standards of the American people, combined with a huge blood toll that would inevitably fall mainly on the children of the working class.

Ever since the Vietnam War, the US military has operated as an all-volunteer force, avoiding conscription, which provoked widespread opposition and direct defiance in the 1960s and early 1970s. A non-nuclear war with China or Russia would mean the restoration of the draft and bring the human cost of war home to every family in America.

Under those conditions, no matter how great the buildup of police powers and the resort to repressive measures against antiwar sentiments, the stability of American society would be put to the test. The US ruling elite is deeply afraid of the political consequences. And it should be.