The Horowitz Foundation for Social Policy was established in 1997 by Irving Louis Horowitz and Mary Curtis Horowitz as a not-for-profit 501(c)(3) organization. Its general purpose is to support the advancement of research and understanding in the major fields of the social sciences. Its specific purpose is to provide small grants to aspiring PhD students at the dissertation level to support the research they are undertaking for their project.
The idea for the Foundation emerged from Irving Louis Horowitz’s experience working with doctoral students. He found that many faced financial barriers to completing their research. Dr. Horowitz initially provided assistance to these scholars personally, and later through Transaction Publishers’ Grants-in-Publication Program. After the termination of that program, the foundation was established in 1997. The first grants were issued in 1999.
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The United States armed forces are facing a deepening recruitment crisis, with far-reaching implications for the struggle against imperialist war.
This year, the US Army is expected to fall almost a quarter short of its annual 65,000 recruitment goal. According to an April 20 press release from the Department of Defense, the Navy is expected to be 6,000 enlistees short, and the Air Force 10,000 enlistees short of their 2023 goals.
This is not a fluke or one-time occurrence, but a mounting problem for the armed forces to which considerable attention is now being given and large sums of money allotted.
Last year, the Army tried to bring in 60,000 new recruits, but was only able to enlist 45,000 soldiers.
Members of the Xavier High School Army JROTC march up 5th Avenue during the annual Columbus Day Parade, Monday, October 10, 2022, in New York. [AP Photo/Mary Altaffer]
Thomas Spoehr, director of the Center for National Defense, described the crisis as “the worst since the institution of the all-volunteer force in 1973.” That is, the worst since widespread social unrest and mass protests against the Vietnam war and the draft forced an end to military conscription.
Spoehr added that the crisis “is not abating.”
Last month, a new book appeared, authored by Matthew Weiss and titled We Don’t Want YOU, Uncle Sam: Examining the Military Recruitment Crisis with Generation Z. The book, written by a younger, well-to-do Marine officer, examines how the military is “scrambling to get a grasp” on Gen Z. It offers a series of proposals to reform the military so as to better attract the younger generation.
Billions of dollars are now being spent by the military as it “scrambles” to get hold of new bodies for its operations. In 2018, the Army signed a $4 billion contract with the global marketing company Omnicon to produce a large-scale advertising campaign aimed at young people.
US Army Secretary Christine Wormuth describes the recruitment shortfalls as a “serious situation.” According to The Week, Wormuth “has begun drafting a sweeping overhaul of her branch's recruitment and outreach process.”
Numerous plans are being discussed in military circles to offset the manpower shortage. Alongside changes to domestic recruitment, these include plans to expand and deploy AI and autonomous fighting technology, the development of a “foreign legion” that could fight in return for US citizenship, and the implementation of new rules to force or entice veterans back into the military.
Causes
Numerous reasons have been given for the crisis. The “unfit” character of potential recruits and the need to “lower the bar” for admission are the most superficial among them.
Michael O’Hanlon, a fellow at the Brookings Institution, goes somewhat deeper, blaming the “bad news stories about sexual assault, accidents and other things.” He adds, “Losing a war in Afghanistan doesn’t help.” Others point to “culture wars” and “wokeness.”
Ultimately, the crisis reflects a changed and increasingly hostile attitude of young people to the military.
Just 9 percent of those aged 16-21 said they would even consider joining the military in 2022, down from 13 percent prior to the pandemic. Approval for the military amongst the US population as a whole is at its lowest point in over 25 years.
These statistics should also be considered in the context of earlier polls, which found that half of Gen Z and almost two-thirds of millennials supported socialism over capitalism. Likewise, they should be seen against the backdrop of the so-called “great resignation,” as millions of young Americans reject the abusive, low-paying jobs that form the bedrock of the economy.
In one of the more honest appraisals of the military recruitment crisis, the Wall Street Journal explained that “after the patriotic boost to recruiting that followed 9/11, the US military has endured 20 years of war in Iraq and Afghanistan with no decisive victories.”
The Journal continues, “[T]here have also been scandals over shoddy military housing and healthcare, poor pay for lower ranks that forces many military families to turn to food stamps, and rising rates of post-traumatic stress disorder and suicide.”
These comments begin to express what is happening. Put somewhat differently: Young workers do not wish to sacrifice their lives as fodder in a global operation of imperialist war and occupation.
Between 755,000 and 786,000 people, largely civilians, are thought to have died directly from military violence in Afghanistan, Iraq, Syria, Libya and Yemen since US-led conflicts began there. However, total estimates of deaths caused by American-led military conflicts over the last quarter-century begin far higher, at 3 million people. In fact, such estimates go as high as 12 million. These numbers are higher than those for people directly killed in combat, taking into account the catastrophic impact of medical, nutritional and infrastructural breakdown caused by US-led military operations.
Millions more people have been left destitute, jobless and homeless due to these wars. According to the UN, more than 110 million people were forcibly displaced as of May 2023, the most on record. Of these, 35.3 million had been displaced across national borders. The home countries of the three biggest refugee populations were Syria, Afghanistan and Ukraine, each of which has been devastated by conflicts resulting from the machinations of the United States military and intelligence agencies.
Meanwhile, those who are veterans of these wars have been left to deal with the crippling economic, psychological and physical effects of their “service” on their own. In 2018, veterans in the United States were 55 percent more likely to kill themselves than people in the broader population. Thirty eight percent of veterans have a diagnosed mental health disorder. Homeless veterans with significant mental health issues are to be found distraught and desperate on the streets of every major city in America.
In this June 19, 2004, file photo, residents of a Fallujah, Iraq neighborhood walk through the wreckage of their homes which were destroyed in a U.S. airstrike. The U.S. launched its invasion of Iraq on March 20, 2003, unleashing a war that led to over 1 million deaths. [AP Photo/Abdul-Kadr Saadi, File]
In short, over the last 20 years, the US military has been exposed as the deadly instrument of American imperialism by the destruction of whole societies in Iraq and Afghanistan, the death of millions of people, the squandering of trillions of dollars of resources, the total disregard for human life, including its own soldiers—all to benefit an elite class of wealthy and powerful families. Thanks in part to the courage and sacrifice of figures such as Julian Assange, these crimes are known.
This is why young people do not want to join the military.
Inflection point
The US military recruitment crisis takes place at a historic inflection point for US imperialism. Since the dissolution of the Soviet Union in 1991, the United States has pursued more than 30 years of unrelenting war. These wars—in the Balkans, Iraq, Afghanistan, Libya, Syria, Somalia and Ukraine—have been waged for the purpose of offsetting American capitalism’s economic decline and maintaining US global supremacy by means of military violence.
But the intractable and mounting problems of US capitalism, and with it, global capitalism, have not been solved by these wars. On the contrary, the abyss grows. Above all, the ruling class watches in horror as signs mount of a mass movement of the working class against low pay and exploitation.
In this context, the United States armed forces have sought to reshape their entire military, intelligence and political-cultural structure to prepare for war against China.
The Pentagon and the CIA see China’s economic rise as both an existential threat and an opportunity. For them, “The 21st century will be the American century,” in the words of President Biden, if, and only if, the competition can be forcibly swept away. Top generals in the US military now predict war with China as early as 2025.
The war in Ukraine is a stepping stone in this larger project. The American and European ruling classes salivate over the prospect of carving up Russia into mini-states. Its vast troves of resources, and massive, sprawling domestic and regional markets would be dominated by American and European capital. Moreover, the subjugation and dismemberment of Russia would remove a major obstacle to mounting a war against China.
Well over 200,000 people have now died in the Ukraine war, whose origins lie in NATO’s reckless expansion eastward and the 2014 Maidan coup, which ousted an elected pro-Russian government and replaced it with a far-right pro-NATO regime. Kiev’s long-touted “counteroffensive” has failed, and the Ukrainian government, facing the mass death of its soldiers, scours the country for recruits.
The Ukraine war has demonstrated two interconnected things to the American military leadership:
First: The death toll in Ukraine belies notions that future wars could be “bloodless” or have only limited casualties. A US war against China and Russia, i.e., a Third Word War, would require the enlisting of millions of people into the armed forces and convincing them to fight. According to US military documents leaked in April, the Ukraine war has already led to 354,000 casualties. But there is no end in sight to the conflict. Should a US-China war break out in Taiwan, a far more densely populated region than Ukraine, what kind of death toll would occur there? Moreover, what does this portend for outright conflict between the US and China? As a comprehensive military report from January 2023 on the opening days of a potential war against China states:
The Navy and Air Force will need to reject the notion that the next war will be long distance and “push-button,” not requiring personnel to face personal danger or operate under conditions of extreme hardship. Although such notions have been attractive since the end of World War II, they do not describe a twenty-first century conflict between great powers… Commanders will need to continue operations and move forward despite a high level of casualties not seen in living memory.
Second: War planners are drawing from the Ukraine conflict the fact that the current industrial supply chain would not be able to keep pace with the demands of a direct war with major powers. The Ukrainian military has burned through tens of billions of dollars of American ammunition in just a little more than a year. An Associated Press report found that the Ukrainian military is firing 6,000 to 8,000 155m artillery shells every day. But the US can only produce 14,000 of these shells every month.
The US and European press have nervously fixated on this issue the last few months. CNN was told by NATO that the “dwindling supply of artillery ammunition” in Ukraine was a “wake-up call.” Jake Sullivan, Biden’s national security adviser, said, “We discovered that the ability to mass produce that ammunition [155m artillery shells] would take not days or weeks or months, but years, to get to the level that we need.”
Now the US and Europe are scrambling to invest more money into artillery and other armaments production, with the EU passing the “Act in Support of Ammunition Production” in July to subsidize new armament production to the tune of 500 million euros.
These two points underscore the problems facing the US ruling class and its military leadership. They also point to key vulnerabilities that highlight the convergence of the erupting class struggle with the fight against war.
If the military, not yet engaged in an all-out war with Russia or China, is already failing to fill its recruitment levels, what will happen when such a war begins?
In the second year of the Iraq War, sections of the American ruling class began to call for the return of the draft, which was ended as a result of the mass protests against the Vietnam War. During the Iraq war, the Bush administration instituted rules that prevented members of the military from retiring or resigning, forcing them to serve, in effect, as a partial draft. Today, the implementation of the draft would have explosive, if not revolutionary, implications in the United States.
In regard to the armament shortage, the US military and its European counterparts now seek to develop a national-industrial regime that can produce the quantity of armaments required to sustain an ongoing war between major powers. In addition to draining even more resources away from social programs, this would require the mobilization of a new assembly-line workforce. With major struggles already underway, however, by auto, logistics and other key sections of the American working class, the ruling class risks leaving such production lines in the hands of a combative, youthful working class, hostile to war.
The drive to war on campuses and in high schools
It is in the context of these twin problems of a recruitment and an industrial armament crisis that the aggressive moves of the United States military on college and high school campuses should be understood.
Earlier this year, it was revealed that thousands of high school students are being illegally forced into Junior Reserve Officer Training Corps (JROTC) programs across the country. In an Army recruiter handbook, distributed to over 10,000 recruiters, the Pentagon leadership instructs: “If you wait until they’re [high school] seniors, it’s probably too late.” An investigation by the ACLU found that students as young as 11 have been enlisted.
In Georgia, the National Guard is planning to use cell phone nets that collect, en-masse, information on high school students. They will then use this data for aggressive recruitment.
Similar things are afoot in relation to the CIA and other intelligence agencies, which, facing their own recruitment difficulties, are turning to the campuses as a major recruitment base. A recent WSWS exposure of Texas A&M’s ties to the intelligence agencies is just one demonstration of this connection.
There are a staggering 3,725 JROTC programs at almost 2,000 different high schools across the country. The program is funded annually with about half a billion dollars.
In higher education, there are more than 1,700 colleges and universities that have ROTC programs. According to a 2016 report from the US Army, $431 million in awards and scholarships are being used each year to entice young people into the Army’s ROTC program, reaching some 23,700 cadets.
Meanwhile, major arms manufacturers are aggressively integrating themselves into the workings of college and university campuses across the country. A report last year from In These Times found that Lockheed Martin had close ties with over 50 universities across the United States. This included partnership universities, universities receiving major research grants from the company, those hosting sponsored Lockheed Martin professors, and those hosting “Lockheed Martin Day” recruitment events.
The National Security Innovation Network (NSIN), a Department of Defense-sponsored organization, operates at dozens of major universities across the country. The organization states that it is “dedicated to the work of bringing together defense, academic and entrepreneurial innovators to solve national security problems in [a] new way.”
Billions of dollars are now being funneled from the military budget into the universities to fund research oriented towards the preparation for war against China through programs like the NSIN and the CHIPS and Science Act of 2022.
Meanwhile, there are ongoing efforts to whip up anti-Chinese hysteria on the campuses, including campaigns to demonize Chinese students and ban Chinese graduate students in certain fields. Similar moves are being made among the allies of the US. For example, in Australia, Chinese academics are being put under surveillance as part of an anti-China witch hunt.
The fight against war requires a fight against the pseudo-left
At its May Day rally in 2022, the WSWS explained, “The contradictions that threaten world war also create conditions for world socialist revolution. The challenge that confronts the working class is this: to strengthen and accelerate the objective tendencies that lead to revolution, while undermining and weakening those that lead to world war.”
The persistent inability of the US military to find enough recruits to feed its war machine reflects, in the final analysis, the growth of anti-war sentiment amongst broad layers of the American population, in particular, the working class. It points to the immense potential to build in the American working class, particularly its youth, a mass movement to put an end to US imperialism and fight for socialist principles.
Transforming this sentiment into an actual movement of workers and young people, however, requires ideological clarification. Many young people may be opposed to war, but that does not mean they understand where it comes from, or who, for that matter, is perpetrating it.
Above all, it is critical to expose the unbreakable ties between the Democratic Party as a party of the American ruling class and imperialist war. This includes clarifying the function of pseudo-left organizations in both propping up the Democratic Party and justifying imperialist war.
The role here of the pseudo-left Democratic Socialists of America (DSA) is central.
Earlier this year, amidst the deepening military recruitment crisis, Democratic Party Representative and DSA member Alexandria Ocasio-Cortez sponsored a military recruitment fair at a Bronx high school. That is, while the US war machine desperately strategized to improve its standing with young people, the DSA’s leading congressional representative actively helped, encouraging teenagers to join the military.
This is not an exception or one-off event. It testifies to the way in which this entire pseudo-socialist layer positions itself patriotically in support of the state. Just last week, AOC declared in an interview with the New York Times:
I wouldn’t necessarily characterize my foreign policy goals as oppositional to the president’s or to the United States… I am a member of Congress. I have sworn an oath to this country, and I take that oath very seriously.
AOC and the DSA are, however, by no means alone in advancing these positions. The entire pseudo-left across Europe and the United States has lined up behind NATO, as it previously did in the conflicts in Syria and Libya, during the Obama years.
As the US prepares for a major military conflict with China, and the war in Ukraine grows into an open conflict between the US and Russia, the US military will continue to “scramble” to reach a new generation of young people, who are moving to the left and are hostile to the military. The Army will seek to aggressively manipulate young people into joining its machine, meanwhile encouraging the closest collaboration between the armaments industry, the state and the universities.
The 2024 German federal budget, which Finance Minister Christian Lindner (Free Democratic Party—FDP) introduced in parliament on Tuesday, is a war budget in two respects: It plans record spending for waging war and for rearmament, and it declares war on the working class by slashing social spending.
Finance Minister Christian Lindner during a speech in the Bundestag [Photo by DBT / Leon Kügeler / photothek]
If the government coalition has its way, Germany will spend €85.5 billion for military purposes next year, the highest sum since the end of the Second World War. That is more than the military expenditure of any other European country, including Russia. Germany is thus to be built up as the leading military power in Europe.
The draft budget of the Defence Ministry only shows expenditure of €51.8 billion, 1.7 billion more than in the current year. But on top of that, there are €19.2 billion from the Bundeswehr’s “Special Fund,” as well as other expenditures hidden in other budgets. To Ukraine alone, Lindner has promised €5 billion in military aid every year until 2027. Together, the military expenditure thus amounts to €85.5 billion euros—the sum that Germany declares to NATO.
The record military spending is offset by cuts in social spending. All departments, except for the Defence Ministry, had to cut planned expenditure. With a total of €445.7 billion, about 30 billion less is planned for the 2024 federal budget than for this year’s budget.
Lindner and the coalition of the Social Democrats (SPD), Greens and FDP are insisting on complying with the so-called “debt brake.” At €16.6 billion, new debt in 2024 is to be only one-third of this year’s level. Nevertheless, the federal government will transfer €37 billion to the banks in interest because of rising interest rates. That is twice as much as the entire budget of the Ministry of Education and Research.
Some of the cuts in social spending are drastic. This is most obvious in the health budget, which will drop from €24.5 billion this year to €16.2 billion next year. In 2022, it had amounted to €64.4 billion. This 75 percent cut is partly due to the fact that the government has almost completely cut funding for monitoring and combating COVID-19, even though the pandemic continues to spread and generate ever new variants. There is also hardly any money for research and cures for Long Covid, even though hundreds of thousands suffer from it.
For the hospitals and their employees, the cut in the health budget has devastating consequences. Many will go bankrupt. Work stress, which is already almost unbearable, will get worse as more and more leave the profession because of the miserable pay.
Child poverty will also continue to rise, despite the Federal Statistical Office recording that about a quarter of all children and young people in Germany are already at risk of poverty or social exclusion. Nothing is left of the basic child allowance that Family Minister Lisa Paus (Greens) and the finance minister argued about for weeks.
Of the €2.4 billion additional the government finally agreed on, not one additional cent will reach children. It is just enough to finance the added administrative costs and the planned increase in various benefits, which are now being merged into the basic child allowance.
The FDP also made it clear that this was the last “social reform” it had agreed to. From now on, there should be no more social reforms that consume tax money or create new debt.
Many other cuts, which are less significant in terms of numbers, have far-reaching effects. Several social benefits that used to make life a little easier for low-income families are being almost completely cut. Funds for the Mothers’ Convalescence Association and family holiday centres are each being reduced by 93 percent, for youth education and youth meeting centres by 77 percent, for free youth welfare provisions by 19 percent, for housing benefit by 16 percent, and for student grants by 24 percent.
To finance the war budget, even more extensive attacks will be prepared in the coming years. By far the largest item in the federal budget is the Ministry of Labour and Social Affairs, with €172 billion. Of this, €127 billion is earmarked to support pensions, an expenditure that is simply unacceptable from the point of view of the ruling class.
Pensions were already massively cut 20 years ago as part of the Schröder/Fischer government’s “Agenda 2010” regressive welfare reforms. Pension levels were lowered, and pensioners burdened with additional tax and social security contributions. Angela Merkel’s first government then gradually raised the retirement age from 65 to 67, which effectively amounted to a further reduction in pensions.
As a result of Agenda 2010, wage levels and thus contributions to the pension fund fell and the government kept shifting new burdens onto it, but the state subsidy to the pension fund nevertheless increased. Representatives of the ruling class are already demanding that the orgy of cuts in pensions, healthcare and social benefits be intensified.
Christian Democratic Union (CDU) budget expert Mathias Middelberg told the Reuters news agency: “The savings in the 2024 draft budget are minimal. In many cases, there are only internal transfers at the expense of the pension or care funds.” Above all, he argued, the welfare budget could be reduced. Four million recipients of the citizen’s income are able to work, but do not work, he said.
The Federal Court of Auditors, a federal agency that is not under the control of the government, also sharply attacked the draft budget. It accused the government of hiding actual new debt in subsidiary budgets, such as the €100 billion special fund for the Bundeswehr. In the years 2020 to 2022 alone, he said, a total of around €400 billion had been removed from the limiting function of the debt brake.
Now the federal government would face enormous costs, the agency said. From 2028 onwards, at least 11 billion and from 2031 onwards at least 17 billion would be due annually to repay this debt. In addition, the repayment of loans for the European Union’s reconstruction fund would fall due from 2028.
“The Federal Court of Auditors cannot yet identify any strategy or concrete measures on how to ensure the sustainability of the federal budget in the medium and long term,” the report to the Bundestag’s budget committee states.
The €400 billion that the Federal Court of Auditors speaks of flowed almost entirely into the accounts of large corporations and banks, in addition to paying for rearmament. They received billions in state money so that profits continued to percolate during the pandemic, the Ukraine war and the inflation triggered by the war.
While the trade unions have concluded wage agreements far below the inflation rate, and real wages are falling, share prices are moving from record to record. The 40 companies listed on Germany’s Dax index reported new records in turnover and profit for the year 2022. Their earnings before interest and taxes amounted to €171 billion.
But these funds are taboo for the government. The same applies to the vast fortunes amassed by some billionaires--according to Forbes, the 10 richest Germans together were worth over $200 billion in 2023. Besides adherence to the debt brake, the mantra of the federal government’s budget policy is: “No tax increases.” Profits are taxed only moderately and wealth not at all.
All parties currently sitting in the Bundestag and the state parliaments support this course—including the Left Party, which voices criticisms here and there, but pursues the same policy as soon as it sits in government, as it does in a number of federal states.
Sometimes it is hard to know whether statements issued by financial authorities are aimed at fooling themselves, the organisations to which they are being delivered or whether, they consider it best not to say too much in public documents lest this “frightens the horses.”
This is the case regarding the letter issued by the Financial Stability Board (FSB), the world’s major financial watchdog, under the name of its chair Klaas Knot, to the summit meeting of G20 leaders that begins in New Delhi at the weekend.
Labourers take a lunch break near a construction site covered with G20 summit logo in New Delhi, India, Thursday, Aug. 24, 2023. For many street vendors and shantytowns dotting the city, the beautification of New Delhi has meant displacement and loss of livelihoods. [AP Photo/Manish Swarup]
Knot began with a warning that global economic recovery is “losing momentum” and the rise in interest rates in major economies is being increasingly felt, but that so far the banking system had remained resilient overall. This, he claimed, was due not least to the “strong bank capital buffers introduced by the post-crisis G20 reforms.”
The March banking sector turmoil saw three of the four largest bank failures in US history, as well as the collapse and takeover of Credit Suisse. It was a “test” for the financial reforms put in place after the global financial crisis (GFC) of 2008 and one that they passed, at least according to Knot.
Individual cases of banking sector stress, he wrote, were a stark reminder of the “speed with which vulnerabilities can be exposed in the current environment.” However, he concluded it was encouraging and a testament to the G20 reforms “that the strains faced by individual banks did not cascade into a full-blown crisis.”
In fact, any objective assessment reveals that the G20 reforms completely failed the test.
In the case of the US, depositors, including wealthy individuals and corporations with the three failed US banks—Silicon Valley Bank, Signature and First Republic—had to have their money guaranteed by US authorities. Not to have done so could have sparked a “systemic crisis.”
With the demise of Credit Suisse, the failure of the international resolution framework, the so-called reforms, was even more apparent.
In a deal arranged by the Swiss National Bank and the Swiss government, Credit Suisse was taken over by UBS in a deal which contravened all the regulations and agreements, designated as “resolution,” made after the GFC.
This was openly admitted at the time. Swiss National Bank chairman Thomas Jordan said “resolution” would have risked a systemic crisis.
“Resolution in theory is possible under normal circumstances, but we were in a fragile environment with enormous nervousness in financial markets in general. Resolution on these circumstances would have triggered a bigger financial crisis, not just in Switzerland but globally,” he said.
In other words, resolution would work when it was not needed but not in a situation with which it was supposed to deal.
The same point was made by Swiss finance minister Karin Keller-Sutter. She said that acting according to the emergency protocols drawn up for the failure of major banks “would have triggered an international financial crisis.”
She had concluded that a major globally important bank could not be wound up according to the G20 protocols.
Ignoring the experiences of March, Knot said he remained “convinced that the international resolution framework developed by the FSB in the aftermath of the 2008 GFC is fit for purpose.”
However, he noted that “further strains in financial markets cannot be ruled out in the months ahead as higher debt servicing costs continue to permeate the economy.”
At the same time, the financial system is “in the midst of deep structural change, including the need to respond to accelerating digitalisation and to climate change risks.”
One of the “key trends” in recent years has been the increased importance of non-bank finance intermediation (NBFI), sometimes known as the “shadow banking” system, which has diversified sources of borrowing, but also has led to a build-up of debt.
“If not properly managed, leverage can amplify stress in the event of a shock and lead to systemic disruption, as demonstrated by recent strains in commodities and bond markets.”
But management requires accurate information and data otherwise the would-be regulators are working in the dark. The IMF has admitted that there are major areas of NBFI about which it knows next to nothing.
Knott made his reference to this problem as mild as possible.
“NBFI leverage can take different forms and is often difficult to identify or measure, which complicates the assessment of associated vulnerabilities,” he said.
The best he could come up with was a report to the Summit on trends in this area identifying “possible actions” to fill key data gaps and that would “address associated vulnerabilities.”
The only conclusion to the drawn from these remarks is that at present the FSB and every other financial authority is flying blind.
The key area of digitalisation is the emergence of crypto assets. Knot wrote that a number of incidents over the past year had “highlighted the vulnerabilities in the crypto-asset eco system, which warrant close monitoring given the growing linkages with the traditional financial system.”
He explained that the “interconnectedness of the global financial system makes it possible that a cyber incident at one financial institution, or an incident at one of its third-party providers, could have spill-over effects across borders and broad sectors.”
Climate change also posed risks to the financial system because “recent weather events have shown the potential for non-linear effects,” that is, economic consequences which far outweigh expectations and thereby feed into the financial system.
In conclusion, Knott warned there were certain to be challenges and shocks for the global financial system in the months and years to come, and it was “possible” that action by authorities could absorb rather than amplify it. In words, in the event of more shock, authorities may be able to contain it but that is no certainty.
Overall, the picture presented by this report, from what the Financial Times described as “the world’s most powerful financial watch dog,” is one in which the agencies of the capitalist ruling class know their financial system is riddled with potential sources of crises. But they have no real idea from where the next one might strike much less what to do about preventing it.
On August 25, Sri Lanka’s Western Province Senior Deputy Inspector General (SDIG) Deshabandu Tennakoon told the Daily Mirror that the police, in collaboration with its Special Task force (STF), had launched a “special operation” to crack down on organised criminals and associated individuals. The measures, he declared, aimed to wipe out organised crime in the country within the “next six months.”
Sri Lanka Minister for Public Security Tiran Alles addressing media conference in Colombo. [Photo: Facebook]
Three days later, Minister for Public Security Tiran Alles, held a press conference confirming the SDIG’s announcement. The “security forces have also been instructed to shoot if necessary” during these operations, he declared. This means Sri Lankan police are now allowed to shoot “suspects” with impunity.
Minister Alles indicated that these special operations were in line with instructions from President Ranil Wickremesinghe. While Alles and SDIG Tennakoon did not say when the operations commenced, the news reports indicate that raids began in June.
In fact, well-prepared police operations are occurring in areas where workers and oppressed people live—in Colombo and its suburbs and in other parts of the country. The police, of course, may net a few underworld kingpins and showcase them in official propaganda to justify the crackdowns.
However, we warn that the real targets of the Wickremesinghe government’s so-called “anti-crime” operations are the working class and the poor. Confronting rising mass opposition to its International Monetary Fund (IMF) austerity measures, the government is using extra-judicial measures to try intimidate working people and suppress the rising mass opposition.
To justify its actions, the police have cited a recent increase in gun violence between “organised criminal or underworld gangs.” According to police reports, 70 shooting incidents have been recorded this year up until August 31, claiming 41 lives and resulting in injuries to 30 others. These crimes, the police claim, have mainly occurred in the western and southern provinces.
Recent police operations include:
On June 12, police and military conducted a special joint operation in Borella, a densely populated working-class area in Colombo. Thirty five people were arrested, accused of possessing various drugs, and 19 others taken in for questioning.
On 26 June, police raided several places in Colombo’s South Division in a “special search operation” to apprehend drug traffickers.
On 1 July, Alles deployed 20 special operation teams in Southern Province and 15 in the Western Province to crack down on underworld operations. Several suspects were killed by police and others accused of murder were arrested in other raids.
The most revealing indication of the government’s real political concerns was its police-military operation on May 9, at Colombo University, Colombo Fort and Galle Face Green. This involved the mobilisation of thousands of armed soldiers, and STF and riot police personnel equipped with water cannons and the establishment of roadblocks.
As government spokesman Bandula Gunawardena told a media briefing, the mobilisation followed a cabinet discussion on how to respond to a possible eruption of anti-government protests. It was the first anniversary of the violent attacks on May 9 by Rajapakse government thugs on protesters who had been occupying Galle Face Green since April 2022.
Mass anger over these assaults developed into a nationwide mass movement, including two general strikes that ultimately forced President Gotabaya Rajapakse to flee the country on July 13 and then resign.
The movement that brought down Rajapakse was diverted by the trade unions, backed by pseudo-left groups, including Frontline Socialist Party, into supporting opposition capitalist parties, Samagi Jana Balawegaya and the Janatha Vimukthi Peramuna. While this opened the way for the installation of Ranil Wickremesinghe as president, his discredited government and Sri Lanka’s political establishment are haunted by last year’s uprising and the widespread popular anger over ongoing social attacks on workers and the poor.
Having negotiated a $US3 billion loan from the IMF, the Wickremesinghe government is imposing job destruction, privatisation, increased taxes, higher costs for essential goods and utilities, and other brutal measures.
On March 1 and 15 this year, half a million workers walked out on strike each day to protest against the government’s IMF measures. Although the trade unions limited and contained this action, the government knows it cannot rely indefinitely on these increasingly despised bureaucracies and must strengthen the repressive powers of the state apparatus.
Security forces assembled near Colombo Campus on March 7, 2023, in response to student protest against government’s austerity and attacks on democratic rights.
Sri Lankan governments have a long and bloody history of whipping up communalism and extra-judicial measures to divide and terrorise the working class.
In 1983, then United National Party (UNP) government provoked a communalist war against the Liberation Tigers of Tamil Eelam (LTTE), which, after almost 30 years of bloody conflict, ended with the defeat of the separatist organisation and the death of hundreds of thousands, mainly Tamil masses, and massive social devastation.
Colombo’s war included the development of racialist paramilitary organisations that were used to abduct, torture and simply “disappear” Tamil youth. Tamil parents and relatives are still campaigning to find out what happened to their loved ones.
Between 1988 and 1990, paramilitaries and death-squads were unleashed by the UNP government and the security establishment to crush rural unrest in the island’s south, killing around 60,000 youth.
In August 2009, three months after the military defeat of the LTTE, President Mahinda Rajapakse’s government declared “war on the underworld.” Thousands of people were subjected to police harassments and some jailed during these operations.
Similar “special operations” were launched by President Maithripala Sirisena during his so-called “good governance” period. In 2018, Sirisena called for an end to Sri Lanka’s 43-year moratorium on executions, and in January 2019, he made a state visit to the Philippines.
Sirisena hailed President Rodrigo Duterte’s so-called war on drugs as an “example to the world.” As the World Socialist Web Site noted, the death toll was horrendous. Under Duterte, officially 7,080 people were killed—2,555 by the police and 4,525 by death squads—with an average 30 deaths per day. The actual death toll was much higher.
President Wickremesinghe’s calls for special police operations against underworld crime is no accident. He was a minister in UNP governments that provoked the anti-Tamil communal war against the LTTE and 1988–1990 murderous campaign against rural youth carried out by death squads allied with security forces.
Workers should also recall that Sri Lankan governments have unleashed police and military violence to suppress the class struggle. There are many examples from the past decade alone.
* In May 2011, the government deployed armed police to Katunayake Free Trade Zone against workers protesting the government’s attempt to slash their pension fund. Police opened fire, killing one worker and injuring several others.
* In February 2012, police fired on a protest of fishermen in Chilaw killing one fisherman.
* In 2013, President Mahinda Rajapakse’s government deployed military to suppress a protest by villagers in Rathupaswala, Gampaha. The military opened fire, killing three people and injuring scores of others.
* In April 2022, police killed a 40-year-old father of two after opening fire on protesters demanding affordable fuel at Rambukkana.
Predictably, the establishment media has endorsed the Wickremesinghe’s “special operation” against organised crime. There has not been a word of criticism from the parliamentary opposition parties, who are conscious that these actions are aimed at the working class and anyone resisting the government’s social attacks.
In line with its police and military raids, the Wickremesinghe regime is maintaining its repressive Essential Public Services Act which is directed against industrial action by workers in key industries, such as electricity, petroleum and health.
Likewise, Wickremesinghe continues to keep all branches of the military on standby in all of the country’s 25 districts and territorial waters. It is also preparing to impose a new counter-terrorism act to give sweeping powers to the police and armed forces.
