Protests and strikes signal mounting hostility toward Italian government

Allison Smith

A wave of strikes and protests across Italy this month reflects widespread and increasing hostility toward the coalition Five Star Movement-Lega government and increasing concerns over the rapidly deteriorating standard of living for the vast majority of Italians.

This past Saturday, nearly 10,000 Romans marched to protest against the crumbling infrastructure in Italy’s capital city. The protest, organised by a group of women that founded Roma Dice Basta (Rome Says Enough), put forward demands for Rome to return to a city that is “inclusive, liveable, welcoming, and forward thinking.”

There is widespread disgust for Rome’s mayor, Virginia Raggi of the Five Star Movement, who was elected on an anti-establishment campaign with promises to clean up the city and significantly improve its infrastructure, but has been mired in scandal since taking office and hasn’t fulfilled any of her election promises. Raggi was indicted last month on charges of making false statements regarding the appointment of Renato Marra as director of Rome’s tourism department.

Residents and visitors are rightly shocked that garbage has been left to pile up, to the point that rats and wild boar regularly feast on the fetid mess, and that maintenance and improvement of transport services has been all but abandoned, with 35 percent of the bus and tram fleet out of commission and at least 30 buses in the city’s aging fleet catching fire between 2017 and 2018.

Rome’s problems, however, began many years ago, and since the onset of the 2008 world financial crisis, the city has been faced with increasing challenges as its administrators have either sought to find short-term solutions or been involved in shady financial derivative transactions that have further deepened the Eternal City’s budgetary crisis.

Contrary to the common mantra echoed by the servile media that workers as well as inept administrators are the main cause of Rome’s budget imbalances, the role of finance capital and derivative schemes is largely responsible for Rome’s—and Italy’s—crisis. Raggi is merely a continuation of this trend.

The protest in Rome followed on the heels of a 24-hour “Black Friday” general strike by public sector workers in transportation, hospitals, and schools across Italy who walked off the job in protest over “salary, welfare, representation in the workplace, universal rights, against privatisation and liberalisation, the abolition of inequalities, and health and safety.”

The four largest unions (USI, CUB, SGB, COBAS), sensing unrest among their membership, put forward workers’ requests for “real increases in pay, provisions for sufficient staff, respect for the dignity of staff, and the right to retirement at 60 or with 35 years of contributions.”

Since the 2012 Jobs Act, pushed through by the Democratic Party, public sector workers have faced increasingly harsh conditions. Citizens interviewed by local media outlets on the day of the strike were overwhelmingly sympathetic with the strikers, even as they expressed frustration over service interruptions.

Last month’s protests and strikes took place as the coalition government continued its crackdown on immigration and submits the latest austerity national budget for approval by the European Union (EU).

While there is widespread concern among Italians about immigration, there is also mass sympathy for the plight of immigrants and an understanding that the significant increase in immigration is due to the unending wars and economic destruction abroad.

Last week, upon visiting the site in Rome where a young woman was allegedly murdered by a group of Italian and immigrant men, Lega Party leader Matteo Salvini was met by hundreds of protesters who roundly jeered him as a “jackal” for taking political advantage of human tragedy to further vilify immigrants.

At the beginning of October, nearly 6,000 people demonstrated in Riace(southern Italy), Rome and Milan, to denounce the arrest of Riace’s immigrant-friendly mayor and the “fascist” anti-immigrant policies of the coalition government. Contrary to the government’s accusation that Riace’s immigrants represent a threat to Italy, the town’s immigrant policies are widely viewed as a role model for how immigrants can be integrated into society.

As the Italian government builds up a vast police state apparatus to carry out mass deportations of hundreds of thousands of immigrants, it is implementing further austerity through the latest national budget that pledges billions of euros for the military and the police, and tax breaks for businesses, while promising a miserly €780 per month “basic income” for Italian citizens, which comes with so many strings attached that it will be virtually impossible to qualify.

On October 24, the WSWS noted that a violent struggle is set to unfold on the summits of European bourgeois politics, as both pro-EU and far-right populist forces fight to impose their version of austerity while trying to avert a financial panic that could provoke an Italian and global market crash. The central question is a perspective for independent political opposition by the working class, uniting workers’ struggles against austerity in Italy and across Europe.

Japanese PM visits China in bid to improve relations

Peter Symonds

Japanese Prime Minister Shinzo Abe late last week made his first visit to China since taking office in December 2012. The trip, aimed at further thawing the frosty relations between the two countries, took place as both China and Japan are being affected by the Trump administration’s trade war measures.

Abe took the first steps toward ending the standoff with China by suggesting, in June 2017, that Japan could provide conditional support for Chinese President Xi Jinping’s massive Belt and Road Initiative (BRI) aimed at linking East Asia with Europe and Africa.

Chinese Premier Li Keqiang visited Japan in May, after years of bitter exchanges, particularly over the disputed rocky outcrops in the East China Sea known as the Senkakus in Japan and the Diaoyu islands in China. Li, however, barely referred to these divisive issues and stressed instead the value of economic cooperation between two countries.

Following Li’s visit, Abe declared that he wanted “to lift the Japan-China relationship to a new stage” and described Li’s trip as “an important first step toward a dramatic improvement.” Abe reiterated that theme when he met Li and Xi in Beijing last week, saying: “From competition to coexistence, Japanese and Chinese bilateral relations have entered a new phase… With President Xi Jinping, I would like to carve out a new era for China and Japan.”

Responding in kind, Xi said the two countries should move in a “new historic direction” and work together at a time of growing global “instability and uncertainties.” Abe was welcomed with all the pomp of a state visit, including a 19-gun salute, an honour guard, the playing of the two national anthems, and a ceremony in the Great Hall of the People.

China faces aggressive moves by the Trump administration on all fronts—trade war measures, accusations of Chinese interference in American politics and US military provocations in the South China Sea and Taiwan Strait.

Japan has been hit by US trade threats, both directly and indirectly through its exports to China, which is Japan’s largest trading partner. Last financial year, Japan exported $137 billion worth of goods into Chinese markets—much of it semiconductors and other components that are incorporated into items sold in the US.

For China, hi-tech imports from Japan are vital as the US seeks to choke off access to such goods on the grounds of “national security.” In the name of halting the alleged theft of American technical secrets, the Trump administration is seeking to undermine China’s efforts to become a global leader in advanced technology. Abe and Li agreed to start talks about cooperation in state-of-the-art technology, while protecting intellectual property rights—a move that Washington will not welcome.

Abe brought 500 corporate executives as part of his entourage. According to Li, Chinese and Japanese companies signed deals worth $18 billion during the visit. At the same time, the two central banks signed a three-year credit swap agreement allowing them to exchange $30 billion worth of each others’ currencies and helping to facilitate trade.

Abe and Xi announced 50 joint infrastructure projects, although these are not formally part of China’s BRI. This is another move that will displease the US. Washington regards the BRI as undermining its efforts to isolate China and has been pressuring countries not to participate.

Other deals concluded during Abe’s visit included cooperation between stock exchanges and a pledge by Japan to promote the Regional Comprehensive Economic Partnership led by China.

This warming of relations, however, remains tentative. While both sides played down long-festering disputes during Abe’s visit, the potential for a sudden deterioration of relations remains. “Without stability in the East China Sea, there can be no true improvement in bilateral relations,” Abe reportedly told his hosts. He sought assurances that China would stop sending vessels into waters around the Senkaku/Diaoyu islands, regarded by Japan as its territory.

Nevertheless, the first tentative steps were taken to defuse the dispute. Tokyo and Beijing signed an agreement to cooperate in maritime search and rescue operations. They also agreed to open a hotline to avoid accidental clashes at sea and in the air, and resume talks on the joint development of gas fields in the East China Sea.

Japan remains dependent on the US-Japan Security Treaty and is not about to take steps that would endanger it. As such, Tokyo is vulnerable to pressure from the Trump administration to distance itself from Beijing. President Donald Trump last year publicly suggested that Japan and South Korea had to pay more of the costs of US military bases, and could press the issue again.

While resting on the US military alliance, Abe has been remilitarising Japan—boosting the defence budget and removing legal restraints on the use of the military overseas. He also has pushed for a revision of the country’s post-war constitution, under which Japan nominally renounces war and pledges never to maintain “war potential.”

Beijing is deeply suspicious of Abe, a right-wing militarist who defends the war crimes of the Japanese military during the 1930s and 1940s in China and elsewhere in Asia. Abe’s visit in 2013 to the notorious Yasukuni Shrine, a symbol of Japanese militarism that inters the remains of class A war criminals, marked a low point in relations with Beijing. China branded the visit “absolutely unacceptable.

During his trip to Japan in May, Premier Li pointedly pushed these fractious issues to one side and used the formula favoured in Tokyo that the two countries should “look to the future”—that is, not dwell on the past. Nonetheless, the bitter experiences of Japan’s brutal invasion of China in the 1930s continues to colour relations between the two countries and form a core component of the Chinese nationalism that the Chinese Communist Party (CCP) exploits to buttress its rule.

Moreover, like the US, Japan is deeply concerned that Chinese economic expansion is undermining its own ambitions to become the dominant power in Asia. The Japanese ruling class was shaken in 2010 when China overtook Japan as the world’s second largest economy and has never reconciled itself to being eclipsed. Japan’s remilitarisation is above all to ensure the ability of Japanese imperialism to aggressively prosecute its economic and strategic interests in Asia and internationally.

These underlying tensions continue to simmer and could rapidly erupt, ending the present moves toward economic cooperation.

GM makes record quarterly profit as US corporations accelerate cost-cutting

Jerry White

General Motors saw a 25 percent rise in third quarter profits to a record $3.2 billion, the US automaker announced Wednesday. The spike in profits, despite falling sales in GM’s two largest markets, North America and China, is the result of relentless cost-cutting, which has been enforced through the collaboration of the United Auto Workers (UAW) union.

The Dow Jones Industrial Average, which saw a sharp decline throughout October on fears of trade war with China, rising interest rates and a minuscule uptick in wages, rose 241 points Wednesday in response to profit reports from GM, Facebook and other companies.

US corporations are averaging around a 20 percent increase in profits chiefly through the suppression of workers’ wage demands, the intensification of work and the spread of part-time and temporary employment. This has been the principal strategy pursued by corporations in the US and around the world since the global financial crash of 2008 and the brutal reality behind the so-called economic recovery.

Just hours after announcing its profit results, GM said it had sent out voluntary buyout packages to 18,000 of its 50,000 North American salaried employees, or 36 percent of its white-collar workforce. Workers will have until November 19 to decide on whether to take the offers, a GM spokesman told the Wall Street Journal, and layoffs were possible if the buyout effort and other cost-reduction measures did not achieve GM’s targets, he said.

While GM made $500 million in profits in China, offsetting losses in South America, the center of the company’s money-making operations was North America where profits shot up 37 percent to $2.8 billion. The company’s North American profit margin was 10.2 percent despite an 11 percent fall in US sales.

GM reported earnings per share were up 41.7 percent from the same period last year. The profit report, which beat investors’ expectations, and the job cutting announcement drove GM shares up 3 percent Wednesday. GM is continuing to spend billions on stock buybacks and dividend payments to its richest investors after squandering $6.7 billion on buybacks last year.

Like GM, Ford and Fiat Chrysler Automobiles (FCA) are relying on North America for the bulk, if not all, of their profits. Although net third quarter profits for FCA fell 38 percent—due to an expected settlement with the federal government over the illegal manipulation of emission results—the Italian-American company’s operating profit in the US and Canada surged 51 percent, to $1.9 billion, and it had a profit margin of over 10 percent.

Ford Motor Co. reported North American operating profits of $2 billion during the July to September period. With Wall Street punishing the company’s stock for achieving a profit margin of just 8.8 percent, Ford announced plans to reduce its salaried US workforce of about 70,000 employees, without specifying a number. The company has already temporarily laid off 2,000 production workers at its Kansas City assembly plant from October 22 to November 4.

US automakers are facing increasing difficulties due to rising costs associated with Trump’s tariffs on steel and aluminum imports, and the rise of the US dollar, which undermines their exports to Asia and other regions. The companies have increasingly relied on sales of higher priced SUVs and pickup trucks in North America, but sales have already declined since their peak in 2016. This could turn into a rout as interest rates on car loans and gas prices rise, resulting in a new round of factory closings, mass layoffs and demands for wage and benefit cuts for the industry’s hundreds of thousands of workers.

The huge profits in North America are due largely to the collaboration of the United Auto Workers union, which has suppressed all resistance by workers to speed up and the decimation of autoworkers’ living standards and working conditions.

The American ruling class, which never forgave autoworkers for their powerful struggles—from the sit-down strikes of the 1930s to the militant wildcats of the 1970s—that wrenched significant concessions from the corporations, used the 2008 crash as an opportunity to intensify its attack on these gains and set a precedent for the whole working class.

During the 2009 bailout of GM and Chrysler, the Obama administration and the gang of Wall Street investors on Obama’s auto task force collaborated with the UAW to destroy the hard-won gains of generations of autoworkers, including halving the wages of new “second tier” workers, abolishing the eight-hour day and eliminating income security for laid off workers. UAW backed the purging of higher-paid “legacy” workers and their replacement with temporary part-time employees who can be fired at will without paying supplemental unemployment benefits or other costs.

The transformation of autoworkers—once the highest paid industrial workers in the US, if not the world—into a largely casual and disposal workforce epitomized the historic change in class relations overseen by the Obama administration and continued under Trump. In exchange for its collaboration, the UAW was handed billions in corporate shares and given control of a vast retiree health care trust. In addition, top UAW executives were showered with millions in luxury items and other bribes to sign pro-company labor agreements, as federal prosecutors have exposed.

Angela, a Fiat Chrysler transmission worker in Kokomo, Indiana, who is on temporary layoff, denounced the UAW for collaborating in the ever-greater exploitation of workers, saying the UAW is “nothing but a tool of management” that has ignored Kokomo workers’ unanimous vote to strike over unresolved safety grievances. She also denounced efforts by Trump to scapegoat immigrants for the loss of jobs and wages while all the money was going to corporate executives and Wall Street. “It’s time we wake up and realize there are powerful forces trying to divide us,” she declared. “They’re using smoke and mirrors to distract us. My mother was a wage slave at Chrysler; my father at GM; and I’m a wage slave too. All workers, no matter where we are from, bleed the same and want the same thing: peace and security for our loved ones. The working class is the majority and we have more in common with workers of all nationalities and races than we do with the people dictating our lives.”

Other major corporations, such as United Parcel Service (UPS) and US Steel, are also making enormous profits even as they demand more sacrifices from workers. UPS recently reported a 20 percent year-on-year increase in third quarter profits to $1.5 billion dollars, while US Steel, benefiting from Trump’s tariffs, has seen profits rise by 20 percent.

At both companies, the unions are doing everything to prevent strikes, with the Teamsters going so far as to defy a majority vote by UPS workers in order to impose a deal that will establish a new lower-paid tier of drivers and maintain poverty wages for part-time warehouse workers who make up 70 percent of the workforce. At US Steel, the United Steelworkers union is trying to push through a sellout deal that would raise wages by 14 percent over the next four years, barely above the rate of inflation, and shift more health care and pension costs onto workers.

Far from the profit boom leading to workers recouping the wages they have lost over the last decade, total compensation costs—both wages and benefits—for private and public sector workers rose by only 2.8 percent in the 12-month period ending September 2018, according to report by the US Labor Department released Wednesday. For manufacturing workers, compensation costs were only 1.9 percent, while teachers and other state and local government workers got a miserly raise of 2.5 percent.

The current inflation rate for the United States is 2.3 percent for the 12 months ending in September 2018, according to the Labor Department. This means workers have seen a rise in real wages of only 0.5 percent, while manufacturing workers suffered a fall in real income.

After a decade in which the unions limited the number of strikes to historically low levels and facilitated the unprecedented transfer of wealth to the corporate and financial elite, millions of workers in the US and around the world are coming into struggle. Since the beginning of the year the number of major work stoppages in the US has nearly tripled since 2017, including walkouts by more than five percent of all K-12 public education employees, the largest number in more than a quarter of a century.

The fight for living wages, safe working conditions and fully funded health and pension benefits requires the building of new organizations of struggle: rank-and-file factory and workplace committees, which are independent of the corporate-controlled unions and democratically controlled by ranks of workers themselves. In addition to taking up the responsibilities long ago abandoned by the unions, including opposition to speed-ups, management abuse and victimization, these committees must link up workers across industries and fight for the establishment of industrial democracy and workers’ control over production.

The development of a powerful industrial movement, including the preparations for a general strike, must be combined with a new political strategy to unite American workers with their class brothers and sisters around the world to fight for socialism and the democratic and collective ownership of the wealth produced by the labor of the working class.

The American oligarchy’s attack on birthright citizenship

Eric London

The Trump administration’s proposal to end birthright citizenship for all people born on United States soil, enshrined in the 14th Amendment to the US Constitution, is another milestone in the assault on democratic rights.

With this move, the American oligarchy is repudiating the basic democratic principle upon which the American republic was founded, embodied in the Declaration of Independence’s proclamation that “all men are created equal.” If the American president can, by executive fiat, strike out the 14th Amendment, what is to stop him from overturning the entire Bill of Rights, which guarantees free speech, protection from unreasonable search and seizure, due process, and the right to counsel, among other fundamental protections?

Trump’s proposal, which comes in the final days of the midterm election campaign, is a provocation by the administration and its fascist staffers aimed at whipping up xenophobic sentiments and creating a constituency for a right-wing extra-constitutional movement. Such a movement is deemed necessary to implement Trump’s pro-corporate, pro-war, anti-immigrant agenda.

The impact of rescinding birthright citizenship on the working class and on immigrants would be disastrous. It would place 300,000 infants born in the US to noncitizen parents at risk of detention and deportation each year.

It would produce an underclass of immigrant families afraid to send their children to school, give birth in hospitals, or send their sick children to the doctor’s office. Millions of children would become stateless, lacking citizenship in any country. Slum districts and even walled ghettos with third world, apartheid conditions would become commonplace.

If applied retroactively, the rescission of birthright citizenship would reportedly place over 10 million people at immediate risk of deportation. Either way, the government will respond to the growth of the undocumented population with further moves toward martial law, including the construction of more detention camps and the deployment of more immigration agents and soldiers, not only to the border but to major metropolitan areas.

As the American Immigration Council wrote yesterday, the decision “would also impose hardship on all Americans, who could no longer point to a birth certificate as proof of citizenship. If place of birth no longer guaranteed citizenship, then all Americans—not just those whose parents were undocumented—would be forced to prove their parents’ nationality to the government in order to be recognized as a US citizen.”

Workers and the poor would have the most difficult time tracing family heritage and would therefore be denied the right to due process, the right to vote and access to social services.

The move reveals the extent of the erosion of democratic principles within the ruling class. Nearly 20 years after the stolen election of 2000 and the launching of the “war on terror,” both parties have already torn the Bill of Rights to shreds, bombing countries under false pretenses, assassinating thousands with drones, conducting torture, mass surveillance and mass deportations.

The Democratic Party and the pro-Democratic corporate media have either supported Trump’s birthright citizenship rescission or deliberately downplayed it.

Democratic Senator Joe Donnelly of Indiana announced yesterday that he was supportive of the repeal of birthright citizenship, while Democratic Senator Claire McCaskill of Missouri told CNN, “I support the president 100 percent doing what he needs to do to secure the border.”

NBC reported that Bernie Sanders, speaking Tuesday at a campaign rally for a Democratic Senate candidate in Maryland, deliberately avoided referencing Trump’s attack on birthright citizenship.

The day before, Sanders downplayed the danger of the extreme right, denouncing those who attempted to link Trump’s fascist rhetoric with Saturday’s shooting of 11 Jewish people at the Tree of Life synagogue in Pittsburgh. “I’m not going to sit here and blame the president” for the shooting, Sanders said.

Of the 28 editorials and op-eds featured on yesterday’s online editions of the New York Times and Washington Post, just three addressed Trump’s attack on birthright citizenship.

Of those, one Post op-ed by George Conway and Neil Katyal offered the soporific that Trump’s move will “undoubtedly” be stopped by the courts, while the other, by Megan McArdle, defended Trump, claiming it is “offensive lunacy” to say his moves against immigrants have anything to do with fascism or dictatorship. “It is nonsense to argue this way, and the left-wing folks ought to knock it off,” she wrote.

The response of the Democratic Party and Democratic Party-aligned newspapers proves that this faction of the financial aristocracy is just as hostile to democratic rights as Trump and the Republicans, although they have different priorities.

While the Republicans and Trump seek to instigate backward elements of the population to create a pogrom atmosphere against immigrants, the Democratic Party’s chief aim is to work with the military-intelligence agencies and tech companies to censor the Internet and gag any political views that the corporations and the CIA deem “non-authoritative.”

Replace “foreign meddling” and “Russia” with “immigrant invaders” and “bad hombres” and the right-wing hysteria promoted by the Democrats and Republicans becomes indistinguishable. In both cases, the most vicious attacks on democratic rights are justified by endless warnings of threats to “national security.”

Birthright citizenship is enshrined in the 14th Amendment of the US Constitution, passed by Congress in 1866 and ratified by three-fourths of the states just over 150 years ago, on July 28, 1868.

The amendment begins with the words, “All persons born or naturalized in the United States…are citizens of the United States,” and goes on to establish that, bound up with this right, no state can “deprive any person of life, liberty, or property, without due process of law.”

Defending his proposal, Trump tweeted yesterday, “This case will be settled by the United States Supreme Court.”

The “case” of birthright citizenship was already settled—by a Civil War that claimed the lives of over 600,000 people. As President Abraham Lincoln explained in his 1863 Gettysburg Address, the war, which lasted from 1861 to 1865, tested whether a nation “dedicated to the proposition that all men are created equal…might long endure.”

The 14th Amendment is known as one of the three “Civil War amendments.” Along with the 13th Amendment, which banned slavery, and the 15th Amendment, which guaranteed adult men the right to vote, the Civil War amendments enshrined in law what the Grand Army of the Republic accomplished in fact.

The birthright citizenship clause of the 14th Amendment rejected the conception that rights and citizenship derive from blood, race or noble status. It was specifically a response to the notorious 1857 Supreme Court decision in Dred Scott v. Sandford, which ruled that persons of African descent were not citizens and could not exercise basic rights such as the right to due process.

The ultimate target of this and related moves is the American and international working class. Amid rising social inequality, a growing strike movement and broad disillusionment with the political establishment, those truths the bourgeoisie once held in its revolutionary era to be “self-evident” it now loathes as incompatible with its drive for corporate profit and world military domination.

The right to free speech and the right of immigrants to enjoy citizenship and its associated rights on US soil—alongside all other democratic rights—can only facilitate, in the eyes of the ruling elite, the unification and education of the world working class, laying the basis for what they fear most—socialist revolution and the expropriation of their wealth for the benefit of mankind.

GSBI Accelerator Program for Social Entrepreneurs (Silicon Valley Mentorship) 2019

Application Deadline: 3rd November, 2018

Offered annually? Yes

Eligible Countries: All

To be taken at (country): Silicon Valley, California, USA

About the Award: Past participants include many in water supply, energy, agriculture, and environment in developing countries. The Global Social Benefit Institute (GSBI) at Santa Clara University serves social entrepreneurs around the world who are developing innovative solutions that provide a sustainable path out of poverty. The GSBI Accelerator assists selected participants with business plans and other capacity building in support of investment.

Type: Entrepreneurship

Eligibility: GSBI seeks applicants who:

• Lead an existing for-profit, nonprofit, or hybrid enterprise
• Are a mid-stage enterprise (3+ years) ready for scale and investment
• Develop innovative solutions to provide sustainable paths out of poverty

Number of Awardees: Not specified

Value of Program: Program staff time, in-residence meals, and accommodations for the GSBI Accelerator program are all paid through the fundraising efforts of Miller Center. Participants in the GSBI Accelerator are expected to pay only for round-trip airfare to San Jose or San Francisco, California for the August in-residence portion of the program.

• Silicon Valley mentorship
• Due diligence folder
• Financial plan for scaling
• Organizational development
• Talent management
• Marketing strategy and execution
• Operational excellence at scale

Duration of Scholarship: 10 months

How to Apply: Please read the Eligibility and Programme Details carefully before you apply here

Visit Program Webpage for details 

Award Provider: Santa Clara University, The Global Social Benefit Institute (GSBI)

Argentina in Turmoil

Jérôme Duval

Seventeen years after the 2001 crisis in Argentina, the Macri government, which came to power in December 2015, is reinforcing a fierce structural adjustment plan for its population following the loan requested from the IMF. The country, which in 2018 holds the presidency of the G20, is one of the most affected by the rise in interest rates in the United States, the leakage of capital, the soaring dollar and speculation on the stock market, as with the crisis that is emerging in Turkey.

In the context of President Trump’s trade war to favour US exports over others, the rise in interest rates in the United States has led to a rush on the dollar, which is now seen as safer than ever. Dollars are being repatriated to the United States to take advantage of the interest rate hike, cash flows suddenly dry up, the currencies of so-called “emerging” countries fall sharply.

Turbulence in Argentina

The peso is in free fall, prices are exploding, consumption is reduced to a minimum, the middle classes are being squeezed, many firms and businesses are closing, hunger is spreading in outlying areas and speculators are panicking without knowing what to invent to avoid the shipwreck that has been announced. However, we could have learned from past crises not to reproduce them: Argentina has already seen this situation before… the people remember it, 2001; there was hunger, the clatter of empty pots hit by hammering spoons in front of closed banks. This was the “corralito” [1]. On the other side, capital flitters away discreetly to await better times. The scenario orchestrated by the IMF all over the globe infinitely repeats itself, which does not prevent it from distilling its same nauseating recommendations whatever the latitude of the country concerned.

“Zero poverty” Macri repeated during his election campaign. Today his popularity is plunging, and this slogan lies among his many election promises that will never be fulfilled, once again the people’s trust has been trampled on, betrayed by the power of money. At fault, the austerity cure that only aggravates the social situation already rolled out by more than two years of a hard right government.

The first 15 billion dollars of the IMF’s 50 billion dollar mega-loan in June does not seem to be enough to stabilise the economy, which has been buffeted by inflation of around 30%, itself stimulated by a depreciation of its currency. The Argentine peso lost nearly 20% of its value against the dollar in two days, 29^th and 30^th of August, and 98% over the last 12 months (more than 50% since the beginning of the year) reaching an historic all-time low at over 40 pesos for a dollar.

In a frenzy, the Argentine Central Bank raised its key rate from 45% to 60% on 30 August, one of the highest in the world after having increased it from 40% to 45% on 13 August, to encourage investment in local currency [2]. However, this action, like the efforts of the Central Bank of Argentina, which has sold more than 12 billion dollars of its foreign exchange reserves since the beginning of the year to stabilise the peso [3], failed to contain investors’ fear of default, or to mitigate falling prices. As if provocatively, on 31 August, the day after the spectacular rise in central bank rates, the US rating agency, Standard & Poor’s, placed the note of the Argentine debt “under negative watch”.

IMF austerity

Argentine President Mauricio Macri announced, on 3^rd September, a brutal austerity plan under IMF supervision. This included the introduction of a tax on agricultural exports of 4 pesos per dollar exported [4], which Macri himself acknowledged were “very bad taxes”, but the level of the budget deficit required emergency action. After so much austerity applied to the poor, this measure may not appeal to the producers of soybeans and maize, the largest purveyors of foreign exchange of the state, hard hit by a record drought early this year. In addition, Macri announced the removal of 12 out of 22 ministries! Mr Macri is claiming to eliminate the ministries of Culture, Labour, Science and Technology, Energy, Agribusiness, Health, Tourism and the Environment to convert them into State secretariats under the dome of other ministries: Culture and Science and Technology pass for example under the mandate of the Ministry of Education, Work under the orbit of the Ministry of Production, Health is absorbed by that of Social Development and Agro-industry moves to the Treasury Department while dismissing 600 workers. So far, only the dictators Pedro Eugenio Aramburu and Juan Carlos Onganía had ventured to eliminate the Ministry of Health.

On 4 September, Argentine Economy Minister Nicolas Dujovne and Central Bank Vice President Gustavo Cañonero went to the IMF in Washington to negotiate a revision of the agreement signed in June and speed up payments. Argentina is sorely lacking in cash. At the same time, the prosecutor Jorge Di Lello indicted President Mauricio Macri for abuse of authority and violation of the duties of a public official for signing the agreement with the IMF on 7 June, without submitting it to Parliament, thus violating the Constitution. For his part, President Macri is unable to calm the growing discontent. He has said on TV and keeps repeating, “This crisis is not just another crisis, it must be the last (…) the worst is behind us. [5] However, the same mistakes produce the same effects and history repeats itself…

In the street, soaring prices are resurging popular discontent. In Buenos Aires, La Plata, Rosario, Mar del Plata, or in other cities of the country, the people express their anger at the rise in prices or the budget cuts imposed on the public administration in exchange for the IMF loan, like those applied to public universities. On strike for more than a month, the professors of the fifty-seven public universities are demanding pay rises. Awakening the tragic memories of the financial collapse of 2001, soup kitchens are again overwhelmed, not only with children but entire families… Galloping inflation is reducing margins on falling consumption and the US supermarket giant, Walmart, has sold a dozen hypermarkets. The price of bread has increased by more than 20% in a few days [6]. As in 2001, the people are hungry, for social justice and bread.

Chilean police attack pensioners’ protest in Santiago

Cesar Uco

On Wednesday October 24, thousands of Chileans marched on the streets of Santiago protesting against the current pension fund system known as AFP—“Association of Pension Funds.” The march was summoned by a group called NO + AFP (or No M ore AFP ) and it was repressed by well-armed Carabineros (the notorious militarized Chilean police) who beat up demonstrators, used tear gas and brought in water cannon to stop the protest.

Workers (both young and old) and students are seeking the elimination of AFPs (which were created under Pinochet’s fascist military dictatorship) and a return to the old system of public pensions.

In spite of the violent repression last Wednesday, dozens of people remained in the center of the city on the main avenue La Alameda, facing continuous harassment by the Carabineros.

While workers and retirees were being beaten up in the streets of Santiago, the right-wing President of Chile, Santiago Piñera, a former businessman and Chile’s wealthiest man, made clear with whom he stood, deciding to spend the day dressed as a soldier. The newspaper La Tercera reported that “dressed in a military uniform, the president joined...the closure of Operation Storm 2018,” a military exercise involving the Army, the Air Force and the Navy.

NO + AFP also held marches across the country from Arica, on the northern border with Peru, to Punta Arenas, on the Strait of Magellan, the southernmost region of South America. Included were the main Chilean cities such as—in addition to Santiago—Valdivia, Antofagasta, Iquique, Valparaíso, Rancagua and Puerto Mont.

Students also demonstrated, linking their fight for free education to the struggle of retirees. Amanda Luna, spokesperson for the Coordinating Assembly of Secondary Students (ACES), said: “Secondary students will be in conjunction with the workers of this country demanding more decent pensions, more dignified working conditions and a free public education. That’s why the high school students are here in support, and we will continue to fight alongside the workers.”

Since 2016, the movement to eliminate the AFP system—a hallmark of Pinochet’s anti-worker measures—has brought hundreds of thousands of workers and youth into the streets. Former president Michell Bachelet (of the Socialist Party) tried to placate the population, promising the reformation of the system by having companies increase their contributions to workers’ pension funds. But her failure to do so opened the way for right-wing Piñera to return to power in January 2018. (He had previously been president between 2010 and 2014.)

The television network teleSUR reported: “In addition to the arrest of several people, including the spokesman and leader of the movement, Luis Mesina, 62, who was violently assaulted and taken to the police station...the teleSUR correspondent’s team was attacked, [including] journalist Paola Dragnic and cameraman Hugo Silva, who were covering the event.” Mesina was arrested along with a dozen leaders representing workers and retirees from the banking, commerce and health sectors.

The leader of the NO + AFP movement said to teleSUR: “For the next few years, it is projected that more than 60 percent of those who retire will get a pension that is lower than the minimum wage and 40 percent will be below the poverty line.”

President Piñera is presenting his own proposed “reform” of the pension system. Given the stark truth that most retirees receive pensions below the minimum monthly wage of $292, it is expected that Piñera’s reforms will be a defense of the neoliberal system with cosmetic changes.

Despite the fact that last week’s mobilizations did not reach the dimensions of those of the last two years, Mesina told the daily La Tercera that “Today we have shown that this movement, despite everything that is done to try to revile it, has managed to express itself throughout the country.”

A review of the Chilean economy following the September 1973 coup reveals why the AFPs are so important to the Chilean ruling class, as well as to world capitalism and institutions like the IMF.

The AFPs were created by decree on November 4, 1980, in the midst of a huge economic crisis that had plagued the Chilean economy since the military coup of September 11, 1973. Dictator General Augusto Pinochet imposed the AFPs upon Chilean workers by force.

Contrary to what bourgeois newspapers said about a “Chilean miracle” arising in the wake of the overthrow of the elected government of Socialist Party President Salvador Allende, the reality is that Chile was plunged into its worst economic crisis during the first decade of the Pinochet dictatorship.

Under shock therapy prescriptions made by the reactionary American economist Milton Friedman and under the auspices of the International Monetary Fund, Chile suffered the greatest drop in GDP in the years following the military coup. (In recent history, the magnitude of Chilean shock therapy was only surpassed in the 1990s when capitalism was reintroduced in Russia.)

It was not until Finance Minister Jose Piñera, brother of today’s President Sebastian Piñera and one of Milton Friedman’s “Chicago Boys,” implemented what amounted to the systematic theft of Chilean workers’ salaries, through AFP monthly contributions, that Chile was able to surpass economically other Latin American countries. These contributions served directly to inject capital into Chilean enterprises

It is significant that both the Chilean Armed Forces and the Carabineros did not adopt the AFP model for themselves, instead staying with the old pension model.

Together with the creation of private pension funds, the dictatorship initiated a large program of privatizations, which resulted in a sharp increase in unemployment between 1980 and 1982, with figures skyrocketing over the rest of South America. A decade had to pass for Chilean unemployment to come close to the average for the continent.

Currently, five of the six AFPs are managed by multinationals such as MetLife, Prudential Financial, BTG Pactual, Sura Group and Principal Financial Group.

For example, in 2013 MetLife bought AFP Provida and Chile became its fourth largest market in the world. Since that year, MetLife’s policy has been to strengthen asset management to increase fee income. If the objective is to increase commissions, it should not be surprising that retirees’ pensions have been decreasing over time.

In March 2016, Prudential Financial bought 40 percent of the Chilean AFP Habitat, one of Chile’s largest private pension funds, for $529 million. It has $43 billion in assets under management. In 2015, it generated about $127 million in revenue before tax and $125.7 million in 2014.

In other words, the Chilean AFPs have mutated from being the growth engine of Chilean industry to becoming cash cows for multinational financial interests focused on increasing commissions.

By law, the AFPs invest 10 percent of workers’ salaries. The economist Gonzalo Durán of the Economic Commission for Latin America (in Spanish, CEPAL) believes that “an AFP invests workers’ money in banks...whose interest rates fluctuate between 4 percent and 4.5 percent per year.” The banks then offer workers “consumer loans, at annual rates of 25 percent...a very profitable business.”

It is clear for to Chileans who have joined the protests against the AFPs that the system emerged in order to boost the profits of national companies and transnational investment funds at the expense of pauperizing retirees.

UK: NHS subsidiary companies—tools for tax exemption and privatisation

Ben Trent 

The destruction of the National Health Service (NHS) continues apace, with outsourcing one of the most effective methods of diverting public assets into private hands.

At the start of the month, 250 NHS estates, procurement and facilities staff working at East Kent Hospitals had their jobs outsourced to a subsidiary company, 2together Support Solutions. This follows a four-day strike at the end of September by affected staff, after 85 percent of them voted in favour of a strike.

The new subsidiary company was announced in May and formally began trading on August 1. The company was set up by East Kent Hospitals University Foundation Trust (EKHUFT).

The subsidiary company is just one of numerous companies—also referred to as “subcos”—that have been set up primarily as a tax avoidance move by multiple NHS trusts. Private companies that operate within the NHS can apply for VAT exemption, whilst NHS Trusts are unable to apply. The Guardian reported in September that “around 35 trusts have set up “subcos” and moved non-medical staff into them, or said they intend to do so.”

The 250 staff will be added to the already 850 that were transferred from Serco, which used to hold the contract for clearing and catering in the trusts. While the 250 transferred workers will retain the pay and conditions they currently have with the NHS trusts, new hires and the 850 moved from private conglomerate, Serco, are not going to be on NHS pay or conditions, creating a de facto two-tier workforce.

A spokesman for the subsidiary claimed, “We have confirmed NHS staff who are transferring to 2gether Support Solutions do so on their existing terms and conditions, this includes pay, annual leave and access to the NHS pension scheme.”

Such assurances are bogus. On October 11, staff at the subsidiary company iFM Bolton went on strike over pay. The pay deal offered by the subsidiary brings most staff to less than £8 an hour, which is under the rates for counterparts within NHS trusts. This was after promising staff they would be employed on NHS rates of pay. A domestic worker, speaking to the Salford Star, declared, “We need the same pay as the NHS staff. We’re on poverty pay at the moment and we work damn hard.”

Amid the growing concerns over the use of “subcos,” NHS Improvement (NHSI)—the regulator of the country’s NHS trusts—issued a notice to “pause any current plans to create new subsidiaries or change existing subsidiaries.”

Jonathan Ashworth, Labour’s Shadow Health Secretary, heralded the move by NHS Improvement as a “victory.” Similar comments came from Unite’s national officer for health and UNISON’s head of health also referring to an apparent victory. These claims have already proved to be false, as both the East Kent Hospitals University NHS Foundation Trust and the York Teaching Hospital NHS Foundation Trust ignored the notice and the strikes opposing the outsourcing.

As the Salisbury Journal reported, Salisbury NHS Foundation Trust began consultation in September to move 375 health care workers into the subsidiary company Salisbury Healthcare Solutions (SHS). Upon the release of the NHSI notice, a spokesman for the SHS merely declared that after the consultation was finished it would simply pause the implementation of the plans. Even though the consultation was made under existing guidelines, the trust is not looking to withdraw the entire proposal. Staff had expressed concerns, outside the September annual general meeting, that the proposal lacked details around pay and conditions of the workers set to be transferred.

Over the last year, several high-profile subsidiary transfers have failed. The Guardian reported in September that Tees, Esk and Wear Valleys NHS Foundation backed down from moving 600 staff members to its subsidiary body—Tees, Esk and Wear Valleys Estates FM Limited—after UNISON threatened legal action. Wrightington, Wigan and Leigh foundation trust also abandoned plans to move 900 staff members to its subsidiary WWL Solutions in June.

In 2010, Southern Health NHS Foundation Trust created TQtwentyone—a separated business entity, as a part of the privatisation process—creating the conditions to attack pay, terms and conditions. By 2013, TQtwentyone, which provided social care services to people with learning difficulties and mental health needs in southern England, forced its 1,886 workers to sign new contracts. These included a restructured pay system, an end to unsocial hours payments and a drastic reduction in annual leave.

TQtwentyone managers argued that workers had to agree to lower their wages and conditions because they cannot compete with private providers “who are fiercely competitive on price in the social care market.” However, the crucial role in facilitating the contracts going through was played by the health unions. Unison, Unite and the Royal College of Nursing isolated the struggle of the health workers and made sure that this inferior contract was imposed on health workers as the employers wanted.

NHS Fightback, initiated by the Socialist Equality Party, warned about the consequences, stating, “The [subsidiary] was expected to increase new business by 9 percent a year, by taking over services from other Trusts and local authorities. The merger of services with the accompanying slashing of jobs, wages and conditions and rationing of services is a vital stage in the government’s strategy of privatising the NHS” (emphasis added). Now, large swathes of these services have been sold off to the private sector, driving down the pay, terms and conditions of workers and hugely reducing the quality of services.

In 2014, a document was published by the Smith Institute in cooperation with UNISON, which consisted of case studies examining five different areas of outsourcing of various public services to private companies. One study analysed the outsourcing of patient transport services (PTS) from the University Hospital North Staffordshire NHS Trust to two separate bodies—Parkwood and NSL. It made several key findings, among which were:

“Underlying problems with providing a service for the price agreed … with knock-on effects for patients.” Along with “the breakdown in the employment relationship,” this “made it more difficult for [the staff] to do their jobs.” Other observations were that the overall employment package was “markedly inferior” across all the key criteria—pay, leave, overtime, sick pay and antisocial hours.

NHS FightBack urges the formation of rank-and-file committees of action, independently of the unions, to organise and coordinate opposition to the privatisation of the NHS.

We urge health workers to contact NHS FightBack to discuss these vital issues and take the struggle forward.

Bolsonaro’s victory and the debacle of Brazil’s Workers Party

Bill Van Auken

The election last Sunday of Jair Bolsonaro, the fascistic and buffoonish former army captain and seven-term federal legislator from Rio de Janeiro, poses a serious threat to the working class in Brazil and throughout Latin America.

Having won 55 percent of the vote—compared to 44 percent for his opponent, Workers Party (Partido dos Trabalhadores–PT) candidate Fernando Haddad—Bolsonaro has already begun to assemble what will unquestionably be the most right-wing Brazilian government since the end of the two-decade-long military dictatorship that came to power in a US-backed coup in 1964.

What is most striking about the incoming government is the predominant role being assumed within it by senior officers of Brazil’s military. His vice president will be the right-wing general, Hamilton Mourão, who retired only last year after publicly declaring his support for a “military intervention” to secure “law and order.” On the day of the election, it was announced that retired Gen. Augusto Heleno will be the incoming defense minister, an appointment that breaks with the post-dictatorship practice of putting civilians in that post.

Heleno was part of the so-called “Brasilia group,” a cabal of senior military officers who served as a pillar of Bolsonaro’s campaign. The group has reportedly submitted 25 names for appointment to Bolsonaro’s transition team, which if accepted would form fully half of the body.

Over the course of his political career including in a television interview on Tuesday, Bolsonaro has insisted that Brazil’s military regime, responsible for murdering, torturing and imprisoning tens of thousands of workers, peasants, students and left-wing activists, was not a dictatorship.

In 1999, he told a television interviewer that Congress should be shut down and that the country would be changed only by civil war that completes “the job that the military regime didn’t do, killing 30,000 people.” In the final days of his campaign, he indicated that his political opponents, whom he described as “red bandits,” would have to choose between jail and exile.

An emblematic campaign gesture employed by the candidate Bolsonaro, and aped by his followers, was pointing his finger like a gun, meant to symbolize his support for summary executions of criminal suspects. He wants to unleash the police in a country where cops killed over 5,000 people last year—five times the number in the United States—not to mention the many more killed by off-duty police death squads.

The security forces and reactionary sections of the judiciary are clearly getting the message. On the eve of the election, military police acting on the orders of electoral court justices invaded 17 universities across the country, tearing down banners and posters expressing opposition to fascism and support for democracy, confiscating leaflets and interrupting a class on the history of fascism, all on the grounds that they constituted unlawful campaign activities against the candidate Bolsonaro.

How is it possible that such a figure has been elected to the presidency of the largest country in Latin America, with a population of nearly 210 million, and the eighth-largest economy in the world?

It is the outcome of the thorough-going degeneration, under the impact of economic crisis and boiling social tensions, of the bourgeois democratic order established 30 years ago this month with the adoption of the 1988 constitution. The process of transition from military dictatorship to civilian rule was touted by its stewards as “slow, gradual and secure.” It assured a blanket amnesty to the assassins and torturers of the Brazilian military and a defense of the property and profits of the capitalists who had supported the dictatorship.

The pivotal role in this transition was played by the Workers Party, which served to divert the mass strikes and revolutionary militancy of the Brazilian working class that shook the dictatorship at the end of the 1970s back under the domination of the bourgeois state.

Crucial to the formation of this party were the political activities of groups that had broken with the Trotskyist movement, the International Committee of the Fourth International, and rejected the revolutionary role of the working class. Some of them had previously promoted Castroism and petty-bourgeois guerrillaism as a substitute for the development of a mass revolutionary socialist workers’ movement, with disastrous consequences throughout Latin America. In the founding of the PT, they swung over to the conception that a bourgeois reformist party with ties to the unions could provide a unique Brazilian parliamentary road to socialism.

As the PT’s electoral fortunes rose, winning it control of municipal and state governments as well as increasing numbers of seats in parliament, its politics turned steadily to the right. By the time the former metalworkers union leader Luiz Inácio Lula da Silva won the presidency in 2002, the party had become the preferred instrument of rule of the Brazilian bourgeoisie, seen as best equipped to contain the struggles of the working class, while fully committed to carrying out the IMF-dictated economic policies of its predecessors.

Despite its diversion of a small share of the spoils of booming commodity prices and emerging market capital flows into minimal social assistance programs, the PT ruled over one of the most socially unequal countries in the world, with six individuals controlling more wealth than the poorest 100 million Brazilians.

With the advent of the worst economic crisis in the country’s history, the PT government pursued policies that placed the full burden of this crisis onto the backs of the working class, while defending the obscene wealth of the financial elite. With average real wages falling 30 percent and 14 million people joining the official jobless rolls, Brazil’s billionaires’ fortunes only grew, with the wealth of the top 1 percent soaring by 12.3 percent.

The PT, like all of the other bourgeois parties, was fully implicated in massive corruption that siphoned some $4 billion out of public coffers to pay out bribes and kickbacks.

The votes for Bolsonaro largely represented an expression of popular hatred for all the established parties that presided over social catastrophe and rampant corruption, but most particularly for the PT, which tried to dress up its reactionary policies in fake “left” and even “socialist” colors. This same hatred found expression in the record numbers—fully a third of the electorate—who refused to cast a ballot for either candidate.

The growth of the right wing due to the anti-working class policies pursued by the nominal “left” is by no means a uniquely Brazilian phenomenon. In the US, the identification of the Democrats and Hillary Clinton with the interests of Wall Street and the military-intelligence apparatus opened the doors of the White House to Trump. In Italy, the coming to power of the right-wing anti-immigrant government of Matteo Salvini was prepared by the pro-capitalist austerity policies pursued by a series of “left” governments, based on successor organizations to the Italian Communist Party. A similar growth of the right has been witnessed throughout Europe, while in Latin America the so-called “Pink Tide” has receded, giving rise to a series of right-wing governments.

How can the working class confront the threat posed by a Bolsonaro administration and the encroaching grip of the military over political and social life in Brazil? It will not be through support for the Workers Party. PT candidate Haddad responded to the election of the fascistic former captain by wishing him “success” and “luck” in forming his government. Party leaders, including Lula, have appealed for “calm,” while stressing the “legitimacy” of Bolsonaro’s presidency.

The PT has raised the slogan of a “democratic front,” by which it means another rotten parliamentary alliance—like the one it previously had with Bolsonaro himself—in an attempt to save the party’s sinking fortunes. Various pseudo-left groups have tried to dress up this same policy as a “united front against fascism,” in an attempt to justify their backing of the PT. They have all pitched their appeal entirely on the basis of identity politics to the layer of the upper middle class that constitutes their social base.

In the 1930s, with the rise of fascism in Germany, Leon Trotsky stated that the “political situation as a whole is chiefly characterized by a historical crisis of the leadership of the proletariat.” This assessment retains all its validity in today’s Brazil and throughout the planet.

With the debacle of the PT and its pseudo-left apologists, the decisive political task is that of turning to the working class and building within it a revolutionary leadership based upon the program of socialism and internationalism. This means building sections of the International Committee of the Fourth International in Brazil and throughout Latin America.