Siemens cuts another 2,700 jobs in the energy sector

Elisabeth Zimmermann 

Just a few weeks after the Siemens Supervisory Board unanimously decided to spin off the company’s entire energy and power plant business and launch it on the stock market as an independent company at the beginning of May, management announced further attacks on jobs and working conditions in order to make the IPO more attractive.

On June 18, the Siemens board announced that its energy sector, now called Gas & Power (GP), would cut another 2,700 jobs worldwide, 1,400 in Germany. This should save an additional €500 million.

The job cuts are focused on the project business and energy transfer division, where high-voltage networks and transformers are manufactured. A cuts programme that will claim 6,000 jobs is already running in the power plant construction division.

Lisa Davis, board member for GP, justified the recent cuts on the grounds that they would “create more growth opportunities” that will “increase competitiveness in the energy market” and “better secure our business.” In future, large-scale projects should pay more attention to the yields to be achieved and orders rejected if they are too low, she said

Those affected by the measures already announced are mainly in GP in Erlangen (600 jobs), and almost 500 jobs in the Schaltwerk Berlin, as well as locations in Nuremberg and Dresden. The impact on jobs in the supply industry in the affected regions is also significant.

The 2,700 new job cuts come in addition to the 10,400 announced in connection with the Siemens reorganisation in early May. This involves 4,900 people worldwide at Digital Industries, 3,000 at Smart Infrastructures and another 2,500 at Central Functions.

The Siemens group is gradually being transformed into a pure holding company by spinning off the individual areas and listing them on the stock market. These areas then have to survive as independent companies in the market. Correspondingly, the pressure from shareholders to increase the rate of profit and to quickly spin off and close less-profitable parts being is stepped up. Other large corporations like ThyssenKrupp are experiencing similar developments.

In attacking workers’ jobs and social rights, the Siemens management has the full support of the IG Metall trade union and its works council representatives. They work hand in hand with the management members on the Supervisory Board and in the Economic Committee on the plans for job cuts.

When they become known, as at GP, the well-paid union and works council officials sometimes feign indignation. For example, Birgit Steinborn, chair of the Siemens general works council, described the job losses as “unimaginative” and instead demanded a requalification scheme for the employees concerned.

The numerous previous cuts and downsizing programmes always ended with the board implementing its plans against the workforce with the active support of IG Metall and the works council. At the beginning of May, the latter had already unanimously supported the spin-off of the Siemens group energy and power plant division.

Birgit Steinborn, who according to Spiegel Online pocketed almost half a million euros in 2017 for her work on the supervisory board, justified this by stating that the spin-off gave employees in the energy sector a better future. In view of the announcement of another 2,700 redundancies, the workers affected will regard this as pure mockery.

Those who want to fight against corporate attacks must organise independently of the unions. This requires the establishment of independent action committees, which will make contact with their fellow workers at other locations and countries and conduct a struggle to defend all jobs on the basis of an international socialist perspective.

France: What should be done with Arnault’s $100 billion?

Will Morrow 

Last week, French billionaire Bernard Arnault, the CEO and leading shareholder of luxury fashion retail group LVMH, became the third person in history to surpass the US$100 billion mark in personal wealth. Only Amazon CEO Jeff Bezos (worth $157 billion) and Microsoft head Bill Gates ($102.9 billion) are richer.

Arnault’s wealth has risen by $32 billion since the start of 2019, more than any other billionaire, placing him ahead of Warren Buffett as the world’s third-richest man, with $100.4 billion. The increase was due to a 40 percent rise in LVMH’s share price, following on record sales and profit figures for 2018 and the first quarter of 2019. The retail giant controls 4,650 retail stores and 70 brands globally, including the luxury clothing label Luis Vuitton and perfume brand Dior.

Arnault’s fortune is a direct outcome of the exploitation of thousands of garment and textile workers around the world, who labour in a chain of sweatshops to produce designer items sold for hundreds or thousands of euros for the pleasures of the rich and super-rich.

For example, a 2017 report by the Guardian newspaper into two of the Romanian factories that produce shoes and components for handbags and suitcases for Luis Vuitton estimated that their 800 workers make around 100,000 pairs of shoes each year. They received the local minimum wage of around €232 per month after taxes. This also means it would take them a little over three months to earn enough to buy just one medium-priced pair of the shoes they make. It would take them each 11,494 years to make what Arnault took in so far in 2019.

The continuing sales bonanza of luxury clothes, cars, jewellery, yachts and mansions shows how the corporate elite is spending more and more on its own selfish whims, even as the broad mass of the population in France and internationally faces growing poverty, unemployment and homelessness.

Arnault’s income this year alone is so large that it is virtually incomprehensible. On average, his wealth grew by $1.23 billion each week. Assuming he slept an average of eight hours, he went to bed every night and woke up $58 million richer. His wealth grew by $2,000 a second.

Arnault personifies the domination over economic and political life in France by a corporate oligarchy. He owns the Parisian daily newspaper Le Parisien as well as the financial daily Les Echos. He enjoys close personal ties with politicians from all the major parties. In 1995, he was reportedly one of the two witnesses in the marriage of Nicolas Sarkozy, the lawyer and future right-wing president of France.

The 2005 wedding ceremony of Arnault’s daughter, Delphine, held at the 400-year-old château d’Yquem in Bordeaux, was attended by Sarkozy, Bernadette Chirac (wife of former president Jacques Chirac) and leading Socialist Party official Hubert Védrine.

Védrine was foreign minister in Lionel Jospin’s PS-led “Plural Left” government from 1997 to 2002. Before that, he was a close adviser to President François Mitterrand (Socialist Party, PS), serving as his secretary of state at the start of the 1990s. In 2009, Védrine joined the board of LVMH, where he has remained since, personifying the corrupt revolving door connecting politicians in all the major parties to the boardrooms of the corporations that they served faithfully while in office. 

Bernard Arnault

Arnault made his fortune beginning in the 1980s. The son of a construction mogul, he moved to the United States at the start of the decade and attempted unsuccessfully to create his own business empire in American real estate.

While he is often cited as an example of the flight of the super-rich away from France in fear at the election of Mitterrand in 1981, it was in fact the Mitterrand government that played a key role in helping create his fortune.

In 1984, with French state support, Arnault purchased the near-bankrupt French textile company Boussac, which included the Christian Dior perfume label, for the symbolic sum of 1 franc. Having publicly pledged to protect all the jobs at the textile manufacturer, within five years he had sold off most of the company’s assets, firing around 8,000 workers. His fortune is directly associated with deindustrialization and the savage assault on the French working class in the 1980s and 1990s under the PS, enforced by Stalinist-led union bureaucracies.

Arnault is a public supporter of French President Emmanuel Macron, telling the Financial Times this month that Macron correctly understands that “the wealth of a country is made by the success of its companies.”

What would be done with $100 billion in a rational society?

Placing Arnault’s income in relative terms, the $32 billion that he has received since the start of the year is slightly more than what the United Nations claimed would be necessary to provide food for every person going hungry in the world for one year and prevent all starvation.

Equivalently, it could be used to double the number of nurses in France, and additionally increase all nurses’ annual salary by €9,000. This would go some way to addressing the permanent crisis in the French healthcare system that has triggered a growing wave of wildcat protests across the country against emergency wards stretched to breaking point.

Assuming that both these measures were enacted, Arnault’s remaining fortune would be enough to spend the $11 billion that the World Health Organization estimates is needed to halve the number of people in the world without access to clean water—many of them in African countries that suffered historic oppression by French and European imperialism—and $26 billion to provide an education to every child in the world who does not currently receive one.

These figures constitute a powerful case for expropriation and the necessity of the socialist reorganization of society. The capitalist elite’s death grip over social life is incompatible with the most elementary needs of the working class, which produces all of society’s wealth.

This is why the Macron government has reacted to “yellow vest” protests against social inequality not with concessions—but with tear gas, rubber bullets, water cannon, stun grenades and attack dogs. In France as in every country, the ruling class responds to the growth of working-class opposition with a turn to dictatorship to defend the wealth of the super-rich.

The only rational policy is to expropriate the ill-gotten wealth of the corporate and financial elite in France and internationally, to put it to use to meet pressing social needs of the world’s population. This means taking the major corporations and banks out of private hands and transforming them into public utilities, run under the democratic control of the working class, and organized according to scientific planning in order to guarantee every person in the world a high standard of living.

Trump plan will slash Medicaid and food stamps

Norisa Diaz

The Trump administration is working to escalate the transfer of wealth from the working class to the financial aristocracy by changing the way the Office of Management and Budget (OMB) calculates inflation, and therefore the way it measures poverty. The result—entirely intentional—will be to reduce social benefits for low-income people and over time exclude hundreds of thousands of them from programs such as Medicaid, food stamps and home heating assistance.

The OMB has requested public comment on a proposal to recalculate inflation based on the so-called “chained” Consumer Price Index (CPI) to calculate the Census Bureau’s Official Poverty Measure (OPM). The change from the CPI used up to now—a shift that has been pushed since the George W. Bush administration--will reduce the government’s annual measure of inflation by 0.2 to 0.3 percentage points.

As a result, the government’s federal poverty level will fall, making hundreds of thousands of poor people no longer eligible for benefits.

The OMB currently calculates inflation based on the Consumer Price Index for All Urban Consumers (CPI-U). Every month, the prices of 211 items in 38 locales are evaluated to see how prices are changing. Trump and his OMB chief Rick Mulvaney, a right-wing Republican who is also serving as acting White House chief of staff, argue that the CPI-U overestimates inflation because it does not account for changes in what people buy to compensate for rising prices. The “chained” CPI supposedly takes such shifts into account, pushing down the official inflation rate.

Organizations that monitor public health and access to social services have carried out studies showing that that if chained CPI is implemented, more than a half-million individuals, including tens of thousands of children, will be cut off from assistance within the next decade.

Aviva Aron-Dine, the vice president for health policy at the Center on Budget and Policy Priorities (CBPP), said earlier this week, “The notice describes and asks for comment on a long list of different inflation measures, but really it’s a proposal to lower the federal poverty line and thereby lower eligibility for many federal programs.”

Over the next decade CBPP estimates that 300,000 adults and children will become ineligible for Medicaid or the Children’s Health Insurance Program (CHIP), and 250,000 adults will lose coverage under Medicaid expansion.

Researchers Gregory Acs and Laura Wheaton at the Urban Institute have calculated what the cuts would have amounted to if the chained CPI model had been used for the 15 years prior to 2016. Acs told the World Socialist Web Site, “We looked at the people who are on SNAP (food stamps) in a typical month in 2016, the last year we had full data in our model. If we used the chained CPI starting in 2001, for the last 15 years, how many people who were on SNAP in 2016 would not be eligible because their incomes were too high?

“We found that if that model had been used 15 years prior to 2016, 579,000 recipients would have been ineligible for SNAP benefits.” He added that “242,000—or about 42 percent—would have been children.”

He continued: “If you were to change from CPI to chained, the poverty line would grow 0.2 or 0.3 percentage points slower. This might at first appear limited, but in a single generation that can mean a five percent difference.”

Acs told the WSWS that the way poverty is currently calculated “misses fundamental changes in society, as it set a poverty line based on what the world was like 50 or 60 years ago, based entirely on nutrition.” He added, “This needs to be reset every decade or two.” Acs argued that the supplemental poverty measure is a preferred measure of poverty, as it considers the cost of food, clothing, shelter and utilities.

The administration points as a precedent for applying chained CPI to the poverty threshold the fact that it was incorporated into the 2017 tax overhaul bill, which provided a massive handout to the financial elite and increased the federal deficit over ten years by $1.4 trillion due to lost federal tax revenues.

In November 2017, the WSWS warned, “It is already becoming clear that the tax overhaul is a prelude to a frontal attack on Medicare and Social Security. On Tuesday, the Congressional Budget Office warned that the tax bill could trigger a budget rule that would require up to half a trillion dollars in Medicare cuts over the next decade.”

The plan to change the inflation measure is part of a deepening assault on the working class, requiring the most vulnerable social layers to pay for the transfer of trillions to the financial aristocracy with a loss of access to health care and groceries.

The Democratic Party, which is openly capitulating to Trump’s savage war on immigrants and seeking to escalate its war-mongering anti-Russia campaign, is saying little about the escalating assault on social programs for the working class and poor.

US House votes down amendment to block NSA collection of the personal communications of American citizens

Kevin Reed

On June 18, the US House of Representatives voted 283-175 against an amendment that would have limited the government’s ability to collect the personal communications of US citizens without a warrant. The amendment was introduced by Reps. Justin Amash, a Republican from Michigan, and Zoe Lofgren, a Democrat from California, as part of a federal spending bill that includes funding for the Labor Department, the Department of Health and Human Services and the Department of Defense.

NSA headquarters sign

The proposal was specifically written to block provisions of Section 702 of the Foreign Intelligence Surveillance Act (FISA) of 1978 that allows the US government—in the name of collecting intelligence on non-Americans located outside the US—to inherently and intentionally collect and store the communications of American citizens.

The motion by Amash and Lofgren had attracted the support of 42 civil rights groups including the ACLU, Arab American Institute, Electronic Frontier Foundation and Fight for the Future. In a letter to the House, the coalition of organizations wrote that adoption of the amendment would “significantly advance the privacy rights of people within the United States.”

The one-page amendment stated in part, “This certification does not authorize any acquisition that intentionally targets a person reasonably believed to be located outside the United States if a significant purpose of such targeting is to acquire the communications of a particular, known person reasonably believed to be in the United States. …”

In explaining the motion, Representative Amash said, “The government can search and sweep in billions of communications, including communications of Americans, and then query that data. … The Amash-Lofgren amendment puts in basic safeguards to allow the government to continue using Section 702 for its stated purpose of gathering foreign intelligence, while limiting the government’s warrantless collection of Americans’ communications under FISA.”

The FISA Act has been revised and updated multiple times since its adoption. The initial passage was in response to the illegal use of federal resources by the Nixon administration in the late 1960s and early 1970s to spy on political and civil rights organizations within the US.

The law created special mechanisms for judicial and congressional oversight of the federal government’s surveillance of foreign entities and individuals within the US. Among these structures was the creation of the FISA court (also known as the Foreign Intelligence Surveillance Court or FISC) to which the FBI and NSA must submit requests for warrantless searches for approval. The three-judge FISC panel operates in complete secrecy, and there is no requirement for its decisions to be released to the public.

Over the years, and especially since the terrorist attacks of September 11, 2001, and the subsequent US military occupation of Afghanistan and Iraq, the law has been used to cover up the expansion of warrantless domestic wiretapping and eavesdropping by the intelligence state.

Six years to the month after the revelations by former intelligence officer Edward Snowden that the NSA was systematically collecting the private e-mail messages and phone calls of everyone all over the world, the vote in the House of Representatives demonstrates that such activities are ongoing.

NSA Headquarters at night

This is no surprise, as the provisions of Section 702 have remained following post-Snowden revisions to the FISA law. The so-called USA Freedom Act of 2015—explicitly sold to the American people as the end of government spying on the public—and the FISA Amendments Reauthorization Act of 2017 both preserved Section 702 in its original formulation.

Though the Amash and Lofgren amendment was offered on a spending bill and not on government surveillance policy specifically, its defeat still stands as a measure of the willingness of the US political establishment to openly flout Fourth Amendment protections against “unreasonable searches and seizures.” Significantly, among those voting against the amendment were many Democrats including Speaker of the House Nancy Pelosi and Chairman of the House Intelligence Committee Adam Schiff.

In response to the vote, Evan Greer, deputy director of Fight for the Future, said in a statement, “It’s good to know that House Democrats like Adam Schiff are ’resisting’ Trump by voting to ensure that he has limitless authority to conduct mass warrantless surveillance,” adding, “The Democrats who voted against this common sense amendment just threw immigrants, LGBTQ folks, activists, journalists, and political dissidents under the bus by voting to rubberstamp the Trump administration’s Orwellian domestic spying capabilities.”

Although there have been press reports that the Trump Administration was not planning to renew legal authorization for the NSA data harvesting program, the persistent congressional support for Section 702 of FISA shows that such practices are critical to the state security apparatus. The New York Times, for example, reported in March that, according to Luke Murray, the national security advisor to Republican House Minority Leader Kevin McCarthy, the NSA was quietly shutting down the program due to “technical irregularities,” not concerns about the violation of constitutional rights.

On the contrary, police and state intelligence information gathering is on the increase against US citizens, especially those who have taken a stand against the Trump administration’s immigration policy. As reported by the World Socialist Web Site, this now includes the use of sophisticated methods of social media content collection for the purpose of profiling and targeting individuals and organizations within the US for harassment, intimidation, deportation and arrest by the Department of Homeland Security.

Honduran military invades university and shoots down students

Andrea Lobo

About 40 soldiers invaded the campus of the National Autonomous University of Honduras (UNAH) firing live ammunition and tear gas into a crowd of hundreds of student protesters, leaving 20 injured. The five wounded by bullets are in “stable” condition, according to hospital authorities.

The operation follows the killing of four demonstrators and maiming of dozens with gunfire last week. Videos have shown armed squads snatching protesters, and the body of a young doctor was found after he participated in protests earlier this month.

Dozens more, including university students, have been killed by the Honduran police and military during recurring mass demonstrations since the US-backed military coup on June 28, 2009, that overthrew elected president Manuel Zelaya. UNAH, whose students have continuously been at the forefront of these demonstrations, had previously been invaded by riot police in 2009 and last year.

The most recent military repression, however, is unprecedented in the last decades and recalls nothing so much as the methods used against radicalized students and workers during the 1980s. While it did not experience the kind of full-fledged civil war seen in neighboring Central American countries, Honduras saw during this period the “disappearance” of 184 activists and the killing of dozens by US-trained death squads.

On Monday afternoon, students in UNAH’s University City in the capital of Tegucigalpa reported on social media that more than 300 armed officials of the National Police and the Military Police for Public Order (PMOP) had besieged the campus, firing tear gas and not allowing them to leave.

“Students reacted by throwing stones at the agents and, in response, the PMOP officials entered through the pedestrian walkway into the campus, pursuing students and firing with their rifles,” reported the AFP.

A chaotic scene followed, with videos showing the trapped students, who numbered more than 2,000, seeking to escape, carrying the injured with them.

The statement released by the armed forces, while making sweeping and unfounded claims of Molotov cocktails thrown and a hostage held by students, recognizes that their gunshots hit students’ legs as they sought to run away.

Students have been carrying out intermittent occupations of campuses across the country as part of the protests led by striking teachers and doctors that began nationally on April 26. While calling for the downfall of the regime headed by President Juan Orlando Hernández (JOH), the most recent demonstrations were triggered by two bills that would further facilitate defunding, mass layoffs and privatizations in the public health and education sectors.

These and other austerity measures were dictated by the International Monetary Fund (IMF) as part of credit talks in April aimed at meeting billions of dollars in interest payments to the local and international financial oligarchies and tax exemptions for the 24 Export Processing Zones in the country, as well as multinational exporters like Dole.

One IMF “structural” program after another, on top of the open sacking of millions of dollars from Social Security Institute (IHSS) by the PNH leadership, have resulted in thousands of unnecessary deaths and a massive fall in living standards. Moreover, unemployment and subemployment have together increased from 35.6 percent in 2008 to 63 percent today.

Despite the policies implemented by both the US and Mexican governments of militarized border policing, mass deportations and concentration camps deliberately aimed at making migrants suffer, the first eight months of this fiscal year saw about 210,000 Honduran migrants apprehended by US and Mexican authorities. This represents about 2.3 percent of the population seeking to escape rampant poverty, murderous state repression and the world’s highest homicide rates, which surpass 300 per 100,000 people in the northern departments (compared to 5 for the United States).

Meanwhile, the local ruling elite, composed of a handful of millionaire and even billionaire financiers and landowners who have partnered chiefly with US and European capital, sit in gated mansions in Honduras with their joint investments and property protected by the state forces trained and armed by their US patrons.

The rapid escalation of privatizations, social austerity, concessions of land and natural resources and attacks on jobs and wages that followed the 2009 coup was paired with the intensification of capitalist state repression. Decrees signed in November 2011 and March 2012 allowed the military’s deployment in the country. In August 2012, the military special force “Tigres” was approved, followed one year later by the creation of the PMOP, both trained by the US military.

These forces have gradually grown to about 15,000 soldiers and serve as a reliable repressive force. It was the PMOP that was deployed across the country when riot police struck last week.

The US ruling class and its client elite in the region see the demonstrations in Honduras, along with the mass protests last year in Nicaragua against IMF pension cuts and this year’s strike waves across Mexico, as harbingers of a mass social explosion that not only threatens the present regimes in Central America, but capitalist rule and imperialism itself with the triggering and confluence of revolutionary struggles across the entire hemisphere.

The private intelligence firm Stratfor wrote earlier this month: “The protests could continue to June 28, the 10th anniversary of the 2009 Honduran coup. They could even gain momentum and turn into a lengthy insurrection against the president. The security situation in Honduras will rapidly deteriorate if the protest wave continues to gain momentum, and could send more migrants north within months.”

On Saturday, the US Southern Command chief, Adm. Craig S. Fuller, arrived at the US Soto Cano base in Honduras to inaugurate a US Marine “rapid intervention” deployment in the country. The following day, he released a statement virtually calling on the Venezuelan military to topple the Maduro government to “welcome you back into our hemisphere’s professional brotherhood-of-arms…[and] to the family of democracies in this hemisphere.”

The increasingly brutal response to the eruption of struggles against austerity and dictatorship in Honduras, as well as the abuses against migrants, are a warning to workers in Honduras itself, the Americas and beyond. US imperialism is prepared to employ the most ruthless militarist methods in defense of its economic and geopolitical interests, especially as it moves to counter the decline of its economic weight globally by relying on its “brotherhood-of-arms” to underpin its political hegemony.

The shelving of the bills in Honduras and the escalating repression—not to speak of the upper-middle-class march organized last weekend by the ruling National Party calling for “social peace”—have not deterred protesters.

However, the current leadership of the protests, including the University Student Movement (MEU) and the trade union organizations that formed the Platform for the Defense of Health Care and Education, are guiding workers and youth into the same dead end seen historically in all petty-bourgeois and bourgeois “left” nationalist movements: a rotten compromise with imperialism and its stooges.

A worker rightly commented on an announcement on social media of the “conditions for negotiations” outlined by the leader of the Medical Association, who has been promoted as the spokeswoman of the protests: “YOU, Mrs. Suyapa Figueroa and the others in the PLATFORM have been in charge of demobilizing the Honduran people when it was at a key moment to take down the dictatorship…we can’t have a truce like you did wanting to go into a dialogue that was only meant to demobilize the people and legitimize [the regime].”

There is nothing to negotiate with the JOH regime or any of the bourgeois governments in Latin America dependent on foreign finance capital and committed to the continued impoverishment of the working class. The only feasible alternative for workers is to organize independently of the nationalist and pro-capitalist unions and any organization seeking to subordinate them to one or another sector of the bourgeoisie, as part of an internationalist political movement with workers across the Americas against imperialism and for socialism.

300,000 demonstrate in Prague against right-wing Czech government

Markus Salzmann 

An estimated 300,000 people protested in the Czech capital of Prague last Sunday against the right-wing government of Prime Minister Andrei Babiš. At what was the biggest demonstration in the Czech Republic since the so-called Velvet Revolution of 1989, protesters demanded the resignation of the billionaire founder of the right-wing neo-liberal party ANO.

After the approximately 750-meter-long Wenceslas Square was determined to be too small to hold the protest, the demonstration was moved to the Letná Plateau on the banks of the Vltava, the site of the mass protests against the Stalinist regime 30 years ago. Three decades later it has become clear that the restoration of capitalism in Eastern Europe has not brought the promised prosperity and freedom. Instead, unprecedented levels of social inequality are being overseen by a thoroughly corrupt, authoritarian elite.

For seven weeks, thousands of Czechs have protested against Babiš, who is accused of corruption and of using his political power for private, business purposes. The protests are also directed against Czech Justice Minister Marie Benešova, who is accused of obstructing investigations against Babiš. According to Forbes magazine, the assets of the Czech Prime Minister are estimated at around 3.3 billion euros, making him the second richest man in the country.

The participants in Sunday’s demonstration were overwhelmingly workers, youth and pensioners, the majority of whom have suffered from the incessant attacks on social rights and benefits carried out by successive Czech governments. Posters at the demo read “Disappear” and “Babiš resign.” Further protests have been announced for August, and could continue up to the date planned to celebrate the toppling of the former Stalinist regime in 1989.

The mass protests in the Czech Republic are yet another indication of the international resurgence of the class struggle. Particularly in Eastern Europe, more and more people have taken to the streets or gone on strike in recent months to protest against catastrophic living conditions, poor wages and corrupt governments. The recent strike by Polish teachers was the largest in Poland in 30 years, and a strike by Hungarian auto workers nearly paralysed European production at Volkswagen. In Serbia and Albania thousands have taken to the streets to vent their opposition to their corrupt right-wing governments.

While the Czech and European press crows about continuing economic growth and low unemployment, the reality for ordinary people is very different. Rapidly rising rents in the cities and price increases for food, electricity and gasoline are driving many families to desperation. Prague is already one of the most expensive cities in Europe. In 2018, around 17 percent of Czechs lived in poverty.

The precarious economic reality becomes clear once one examines the increase in private indebtedness. As Radio Praha reported, around ten percent of the population can no longer pay their debts and must forfeit their property and possessions. This total includes around 10,000 persons aged between 18 and 29, and around 400 debtors under 18. Against such a background of social misery the Babiš government has pledged to implement further social cuts.

A number of right-wing, pro-European Union forces are seeking to exploit the legitimate protests against the hated billionaire for their own purposes. These forces are opposed to toppling the government and any expansion of the protests. Several representatives of these organisations have openly declared they do not seek to reverse the outcome of the 2017 election, which resulted in Babiš's party as frontrunner. Instead they would be satisfied instead with his removal as head of government.

In particular, the organizers of “One Million Moments for Democracy,” who are close to social-democratic and conservative pro-EU forces, want to force the government to adopt a stronger pro-European policy. “We are not making a revolution, but rather returning to the legacy and values of 1989,” said one of the initiators, Benjamin Roll.

These forces base themselves entirely on the criticism of Babiš made by Brussels. A recent European Commission audit report concluded that Babiš exerted huge influence over his holding, Agrofert, which he officially outsourced to two trust funds. On the basis of numerous examples, the 71-page report explained how EU subsidies finished up in the coffers of Babis’ company. A demand has been raised for the return of over 17 million euros.

Babiš responded by calling the Brussels report an “attack on the Czech Republic,” raising the prospect that the Czech Republic may prove to be as difficult for the EU as Hungary under its right-wing Prime Minister Victor Orban.

The Babiš government typifies all those forces that committed themselves to capitalism thirty years ago and shamelessly plundered the economy at the expense of the people. The son of a functionary of the Communist Party, Babiš studied in Paris and Geneva. From 1985 to 1991 he was head of the Czechoslovak commercial agency in Morocco.

During this time, he is said to have worked under the code name “Bures” for the Stalinist secret service, a claim Babiš denies. The files kept in the Slovakian capital Bratislava have been falsified, he argues. What is clear is that he had close contacts to the former state leadership and in the early 1990s used his links to consolidate Agrofert into a billion-dollar company.

Babiš entered politics in 2011 with the ANO party, which is completely geared to his person and interests. Babiš founded the party after both the social-democratic and conservative parties had become increasingly discredited. He won the 2017 general election with a clear majority but less than two years later he faces the protest of hundreds of thousands.

It is no coincidence that Babiš rules in a coalition with the Social Democratic CSSD. Thirty years ago, this successor to the Stalinist state party played the key role in selling off public owned property, plunging thousands of workers into unemployment and poverty. Following extensive losses in the last election, the CSSD is threatened with collapse.

The government is supported by the Communist Party (KSCM). The KSCM still adheres to the tradition of the former Stalinist state party, which proceeded ruthlessly against the population when it thought its rule was endangered. The party refuses to support a vote of no confidence in Babiš and has stated it will continue to support the billionaire's government.

Strike by Taiwanese flight attendants points to growing workers’ discontent in global airline industry

Ben McGrath

Flight attendants from Taiwan’s EVA Air are on strike demanding higher wages as well as a reduction in long working hours. The action is just one of numerous walkouts and protests being held by airline and airport workers around the globe in response to attacks on wages and working conditions in one of the most globally interconnected industries in the world.

EVA Air cabin crews are demanding an increase in the hourly inflight wage on international routes from the current rate of $NT90 ($US2.90) to $NT150 ($US4.82). They are also demanding an end to shifts that require them to cover both legs of roundtrip flights on nine regional routes, which lead to work days in excess of 12 hours. EVA Air is Taiwan’s second largest carrier after China Airlines.

Press conference called by union (Source: Taoyuan Flight Attendants Union Facebook page)

The strike has forced the airline to cancel hundreds of flights, just as the peak summer vacation season starts to get under way. An airline spokesperson said the company would have to scrap 852 flights by Friday. Flights between Taipei and Hong Kong—one of the world’s busiest international air routes—as well as from Taiwan to Japan, Singapore, London and New York will be affected, Bloomberg reported. EVA Air has a total cabin crew workforce of 4,305.

The strike began last Thursday when 3,000 workers in the Taoyuan Flight Attendants Union (TFAU) walked off the job. The flight attendants approved strike action in a vote that took place from May 13 to June 6 with more than 80 percent voting in favor. One thousand TFAU members from China Airlines also took part in the vote, supporting a strike at EVA.

“After repeatedly negotiating with the company over the disputes with no result, the union realizes that discussions will not lead to a resolution, and we hereby announce that all union members will go on strike,” said Chou Sheng-kai, the union’s deputy secretary general. He made sure to add, “But we are still open to resuming talks if EVA has any proposals to change the situation.”

The TFAU is already moving to shut down the strike without any demands being met. Talks are likely to resume Wednesday with the union already stating that it will not insist on a raise on the inflight allowance to $NT150. It had already abandoned the flight attendants’ original demand for shifts on 21 round-trip routes to be reduced to one leg. The TFAU has proposed moving up a vote to end the strike that had been scheduled for Saturday.

The dispute between the flight attendants and EVA Air has been ongoing since 2017. The union called the strike to allow workers to vent their frustration while leaving them isolated. In fact, when the strike began, Chou, the union’s deputy secretary general, called on other flight attendants to scab on the strikers. “The airlines still has 1,000 or so flight attendants for services and we have also asked the airline to use their reserve staff for domestic flights to reduce the impact on local passengers.”

This attack on EVA Air cabin crews is part of an ongoing assault by airline companies around the globe, which are slashing wages and increasing work hours and tasks to boost profits and returns to global investors. EVA Air recently reported that last year it had taken in a net profit of $NT6.55 billion ($US212.49 million), a 13.9 percent increase from the previous year, due to increased numbers of passengers on flights.

Flight attendants at EVA Air are not alone in their fight, but they will find no allies in the TFAU or other unions. Nor will appealing to the hearts of corporate executives yield results. Instead, flight attendants must turn to their class brothers and sisters internationally, all of whom are facing the same attacks from airlines in the name of remaining “competitive.” This will only intensify as the world economy slides towards another recession, which is being accelerated by the trade war by the US against China and other competitors.

Protest by striking Eva Air workers (Source: Taoyuan Flight Attendants Union Facebook page)

Airline workers and all workers confront a fight against the global capitalist system, which has enriched the corporate and financial oligarchy at the expense of the jobs and living conditions of workers in every country. In opposition to the nationalism of the unions, airline workers must fight for the unity of the international working class, particularly in an industry where companies employ workers from around the world.

Flight attendants from Hawaiian Airlines will picket today at Honolulu’s international airport. They have been working for two years without a contract while watching their wages fall within the industry as the cost of living and medical expenses rise. Some flight attendants at airlines like Frontier, based in Denver, Colorado, must go on food stamps just to get by. Both sections of workers are members of the Association of Flight Attendants-CWA, which has sought to smother labor discontent.

Flight attendants at Germany’s Eurowings, a low-cost airline in the Lufthansa Group, are in the process of voting on whether or not to go on strike over low pay. If a strike is called it would likely occur in July.

The struggle is not limited to airline personnel. About 70 baggage handlers and wheelchair attendants at Denver International Airport went on strike in June 18 against unsafe working conditions, which includes handling dangerous materials or items without proper training. The workers are employed by Frontier and Southwestern Airlines through subcontractor Prospect Airport Services.

More than 11,000 Sky Chef workers who prepare food for American, United and Delta airlines in 28 cities across the US have also voted to strike. The catering workers, some of whom earn as little as $US8.46 an hour, are asking for higher wages and less costly health insurance.

These include Sky Chef and Gate Gourmet workers at the Seattle-Tacoma International Airport in the state of Washington. Speaking of the conditions these workers face, a representative from Unite Here, said, “Neither the catering companies nor the airlines have shown a commitment to the significant economic increases that are necessary to end poverty and unattainable health care in the industry. Our members are facing poverty now, our members aren’t able to afford the rent now, and aren’t able to afford to send their kids to college now.”

The statements by Unite Here are entirely hypocritical. In 2013, the City of SeaTac passed a “living wage” ordinance that was promoted by the Democrats, the unions and pseudo-left figures like Seattle city councilwoman Kshama Sawant as the first-in-the-nation $15 minimum wage for all. But the ordinance included an exemption for employers with union contracts. This included Sky Chef which pays workers less than the minimum wage with the sanction of Unite Here.

The current strikes and protests are part of a wave of airline workers’ struggles over the last 18 months. In February, pilots at China Airlines went on strike demanding more pilots be added on long-haul flights to combat fatigue. In 2016, flight attendants at China Airlines, also covered by the TFAU, held the first strike in the history of a Taiwanese airline.

Last summer, pilots and cabin crew from Ireland-based Ryanair carried out coordinated strike action across Europe against low pay and poor working conditions. This included the largest strike in the airline’s history in September.

The attacks by companies on the right to decent pay and safe working conditions require an international response. The nationalist unions in all these countries have collaborated with the airlines to keep workers on the job without contracts, prevent strikes, and to enforce concessions contracts on their membership.

Flight attendants, pilots, mechanics, hospitality workers must unite independently of the unions, form rank-and-file committees, and reach out to workers around the world faced with the same attacks on their livelihoods.

The strike in Taiwan takes place within the context of growing social anger in the Asia-Pacific towards inequality, which has fueled the massive protests in Hong Kong in recent weeks. The working class is the only force on the planet that can lead the struggle against inequality, economic catastrophe and war by fighting to replace capitalism with a scientifically planned world socialist economy.

Australian Labor Party embraces huge tax cuts for richest 5 percent

Mike Head

“I don’t regard someone who’s earning $200,000 a year as being from the top end of town… It’s a good thing that people all aspire to get a higher standard of living for themselves and their family.”

These comments were made on Sky News last Friday by Anthony Albanese, who was installed as Labor Party leader following its crushing May 18 election defeat. They were the most blatant expression yet of Labor’s further sharp shift to the right, to openly embrace enriching the wealthiest layers of society.

Anyone taking home $200,000 a year is in the top 5 percent of income recipients. Their salary is more than four times the median wage of taxpayers, which was estimated last year to be just under $45,000.

Since Labor’s election debacle, it has dropped its populist pitch of standing for a “fair go” against the “top end of town.” As the Socialist Equality Party warned in its election statement, Labor’s claims were “worthless.” Whether Labor returned to office or not, its rhetoric was pure “duplicity and deceit,” intended to contain rising working class discontent over falling living conditions, the destruction of full-time jobs and ever-widening social inequality.

As soon as he became the party’s leader on May 30, Albanese declared that Labor backed “successful” people, “wealth creation,” bipartisan unity and a closer partnership with the corporate elite. His latest remarks were made in the context of justifying Labor’s readiness to accept, directly or indirectly, the Liberal-National Coalition government’s proposed three-stage plan to slash income taxes for those receiving more than $200,000 a year.

A meeting of Labor’s shadow cabinet yesterday decided to appeal to the government for a bipartisan approach of immediately implementing the first two stages of the tax plan, while “deferring” a vote on the third stage. Both the second and third stages would be a bonanza for the wealthy, but the third stage would be the most brazen, handing tax cuts worth $33 billion over five years to those earning above $200,000.

Some media outlets presented Labor’s decision as a “rejection” of the government’s third stage. Nothing could be further from the truth. After the shadow cabinet meeting, Albanese said Labor’s stance was simply a “negotiating position.”

Albanese said that if the government agreed to defer stage three’s consideration “to the following sitting of Parliament or whenever they deemed fit to debate it some time between now and 2024-2025 when it’s due to commence, then we would facilitate the passage of those stages (one and two) through the Parliament next week.”

Prime Minister Scott Morrison immediately dismissed Labor’s deferral request and announced that the Senate would sit indefinitely next week until it passed the full package.

The government may not need Labor’s votes. It could push the tax cuts through the Senate with the support of three “crossbench” senators. This would allow Labor to formally vote against stage three—knowing it would pass anyway—as a means of defusing the popular hostility toward Labor’s embrace of the tax handouts to the rich.

But the government previously ruled out negotiating deals with those senators, preferring to force Labor into openly voting for the whole package.

Labor’s shadow cabinet reaffirmed its support for stage one, which is backdated to July 1 last year. It offers a pittance to “middle-income earners” between $41,000 and $90,000—a temporary annual rebate of $1,080. That is only $20 a week, not even enough for public transport fares or petrol costs.

Because of a rapid descent of the economy into recession, Labor’s shadow ministers urged an acceleration of stage two, bringing it forward by three years, from 2022-23 to 2019-20. That would increase the income threshold for the 32.5 percent tax rate from $90,000 to $120,000.

That alone would hand an immediate boost of $1,350 a year for those on more than $90,000, and more than double that for those above $200,000. Labor did not propose bringing forward another part of stage two, which would benefit middle-income recipients by raising the top income threshold for the 19 percent tax bracket from $41,000 to $45,000.

Half the country’s taxpayers are on less than $45,000, because of low and stagnant wages, and high levels of under-employment, but Labor’s proposal would only speed up the tax cuts for those above $90,000.

Albanese told reporters that Labor’s suggestions “would bring forward tax cuts faster for those who need it, and importantly those who will spend it, to stimulate demand in the economy.” While paying lip service to “need,” Labor’s only concern was to reverse the worsening economic slump by handing cash to households that were likely to spend it straight away, while leaving low-income households with nothing.

For now, Labor has baulked at openly endorsing stage three, scheduled to begin on July 1, 2024, which would multiply the handouts to higher-income households. According to calculations by the Australia Institute, someone on $125,000 would be $7,035 a year better off than if the tax rates were only adjusted for inflation, and someone on $200,000 would be $19,785 better off.

But Labor’s objection to stage three was not that it would benefit the rich. Labor’s only reservation was that it would be “economically irresponsible” to immediately commit to stage three’s $33 billion cost at a time when the economy was “very soft.”

At the same time, Labor leaders are sending out clear signals of their willingness to facilitate the passage of the whole package. Unnamed “senior Labor sources” reportedly told the Australian on Monday that Labor might still wave through all three stages.

Labor’s backing for tax cuts for the wealthy is no aberration. It is in line with its decades-long record of boosting the fortunes of the financial elite at the expense of the working class. The Hawke and Keating Labor governments of 1983 to 1996 slashed the top income tax rate from 60 percent to 49 percent, and the company tax rate from 49 to 33 percent.

These tax cuts—the largest in history—were part of a global process. Capitalist governments around the world are competing to satisfy the financial markets and attract investment by slashing high-income and corporate taxes, while spending billions on their militaries and dismantling essential social programs, such as public health care, education and housing.

Labor’s appeal for a bipartisan front encouraged Prime Minister Morrison to use his first domestic post-election speech on Monday to outline a new wave of pro-business “reform” modeled on the Trump administration’s program in the US. On top of “lower taxes,” Morrison proposed stripping away regulation to provoke economic “animal spirits” and conducting a “review” of workplace relations.

Morrison provided no details whatsoever, but the thrust is clear. Under conditions of a deepening global downturn, intensifying US-driven trade wars and growing indicators of a recession, the government and big business are intent on launching a further assault on the jobs, wages and conditions of the working class.

With the Coalition barely scraping back into office, and knowing that their agenda will provoke explosive working class struggles, they are counting on the continued assistance of the Labor Party and the trade unions.

US schools erecting a massive digital surveillance infrastructure, choking dissent and free speech

Doug Martin

Despite popular concerns over the violation of civil liberties and the right to privacy, 63 school districts in at least 20 US states purchased social media monitoring software in 2018 up from only six districts in 2013, according to a report published in April by NYU School of Law’s Brennan Center for Justice.

The actual number of schools using social media surveillance tools or services to spy on their students, while unknown, is much greater than those represented by the study since districts self-report to the database of government purchases examined by the Brennan Center.

Despite the lack of any evidence that online surveillance has ever foiled violence, school districts in Texas, Illinois, California, and Florida spent, from 2012-2018, a combined total of almost $1.5 million, allegedly to detect potential social media threats from well over a million students. Education Week noted in a May 30 report, “Social media monitoring companies track the posts of everyone in the areas surrounding schools, including adults. Other companies scan the private digital content of millions of students using district-issued computers and accounts. Those services are complemented with tip-reporting apps, facial-recognition software, and other new technology systems.”

By tapping private companies’ services or tools to comb 24/7 through social media posts—including those by adults originating from a student’s home on family-owned devices—schools are trampling on US constitutional rights to privacy and playing a growing role in the efforts of the government and tech giants to surveil and censor the internet.

A series of court decisions have opened the door to widespread surveillance in schools, including the US Supreme Court decision Board of Education v. Earls, written in 2002 by the arch-reactionary Clarence Thomas. The court held that “a student’s privacy interest is limited in a public school environment where the State is responsible for maintaining discipline, health, and safety.”

As the World Socialist Web Site revealed last year, many data mining companies surveilling students on Facebook, Twitter and other social media platforms are operated by or employ former intelligence and law enforcement members. It is unsurprisingly, then, that many social media tracking companies have provided public school officials and police a way to stalk student protesters.

Solana Beach, California’s Geo Listening is one such company. After spotting social media chatter regarding a 2009 protest planned by students over teachers’ pay in the Golden State, the company, fearing nationwide walkouts, “notified all the appropriate schools, who were able to stop it before it happened,” according to the Hawaii student newspaper Ka Leo o Nä Koa.

In March 2016, Geofeedia—a Chicago company funded by the CIA’s venture capital arm, In-Q-Tel—“pulled together a little content” from social media posts for the Boston Regional Intelligence Center, a fusion center managed by the Boston Police Department, to track a walkout in which 1,000 public school students marched past the statehouse to protest proposed budget cuts to education. The company also helped law enforcement intercept students in Baltimore during the protests in 2015 after the police killing of Freddie Gray.

Students marching at Boston City Hall

Geofeedia markets its services by boasting of its surveillance of middle and high school students for police, netting lucrative contracts. Geofeedia claimed it had 500 public safety and law enforcement clients in 2016, but Illinois’ Lincolnshire-Prairie View School District 103, after shelling out $10,000 to the company to monitor Adlai E. Stevenson High School students on social media, ended Geofeedia’s services because of a “lack of relevant information and cost.”

The Jacksonville Sheriff’s Office in Florida used Geofeedia to trawl for high school violence, drug use, track the activities of African American protest organizations, and bomb threats. But a 2017 Times-Union analysis found that of the 146 Geofeedia alerts covering the time of one month and a half, “nearly half were false-alarm ‘bomb threats’—usually triggered by people describing food, beer and other things as ‘bomb.’” Not one “of the alerts documented over that six-week time span contained any hint of criminal activity.”

Another social media surveillance company, Social Sentinel, also has received failing grades on this score. Mark Pompano, director of security for the Connecticut school district that includes Sandy Hook Elementary, the scene of the 2012 mass shooting, told the New York Times that the district briefly hired the Vermont company after the tragedy, but its software “never caught anything serious,” and there was not “a single incident that we used Social Sentinel to pursue some type of security threat or anything like that.”

Social Sentinel, in March 2019, wasn’t of much use in San Antonio, Texas, either, when online fighting between teenagers led to a stabbing death involving a James Madison High School student. The previous summer, Social Sentinel was hired by the North East Independent School District, which includes James Madison High, but the company “does not have a database of student names and would not flag threats unless a school or the district is mentioned,” a district spokeswoman told the San Antonio Express-News at the time of the stabbing, adding that community reporting of potential violence is what they mostly depend on.

The scale of the growing surveillance of America’s youth is breathtaking. Social Sentinel not only mines social media but also the emails of students. Bloomington, Illinois-based Gaggle monitors the digital documents and emails of almost 5 million K12 students, even vacuuming up data from personal devices connected to school district-owned computers.

Securly, a San Jose, California-based social media surveillance company, scans the online searches of students and even offers a blacklist program which blocks “inappropriate” websites from being accessed by millions of students. Similar web filtering software has prevented students from visiting anti-capitalist, antiwar, and anti-censorship sites in the past.

The more data, the better for those eying students. Florida is taking data collection and sharing to extremes.

In wake of the 2018 Marjory Stoneman Douglas High School shooting in Parkland, Florida, which left 17 dead, lawmakers passed a school safety law which, among other things, requires a database to combine people’s social media posts with millions of records of those who have been placed in foster care, diagnosed with substance abuse problems, received forced psychiatric evaluations, or were “mentioned in unverified tips made to law enforcement.”

Detroit Public Schools police command center

Implementation of the massive social media surveillance-based database has hit a snag due to legal concerns and the cancellation of a six-year contract for $4.5 million to a company named Abacode, after Social Sentinel protested the “unclear language” in the state’s “intent to negotiate” document which opened the bidding.

Florida’s project is a perfect example of how spying on students is, from the standpoint of student safety, a terrible waste of resources—emphasizing its real purpose—an intensification of the militarization of schools and society at large.

While both Republican and Democratic lawmakers nationwide slash funding for teachers, educational aides, social workers, school counselors and psychologists, billions of dollars are allocated to hire more school police, install bulletproof doors, deploy metal detectors, mount surveillance cameras with facial recognition technology, issue RFID student tags, and now arm teachers.

School shootings have become the pretext for a mass spying campaign on young people, aimed above all at crushing social opposition to the ravages of the capitalist profit system. Nothing has been or will be done to eliminate social inequality, halt the violence of endless war and police brutality inside and outside the schoolhouse, or foster a positive school culture by either big business party. On the contrary it is capitalism, the global socioeconomic system, that produces the two fundamental causes of mass violence: imperialism and inequality.

The real target of all forms of censorship and surveillance is the increasingly militant working class. The ruling elites are particularly worried over the radicalization of the younger generation, the majority of whom already identify as socialist.

Britain at centre of international “corporate tax haven network”

Simon Whelan

Research by the Tax Justice Network (TJN) advocacy group shows how Britain is at the centre of an international web of tax havens, solely serving the profit interests of transnational corporations (TNCs).

The study by the London-based group, which calls for “the elimination of cross-border tax evasion and limit tax avoidance, so large corporations and wealthy individuals pay tax in line with their ability to do so,” found that the UK and a number of its territories are the world’s foremost facilitator of global tax avoidance. It states that the UK has “single-handedly” done the most to ensure that existing rules on corporation tax are overcome. It is estimated that approximately $500 billion (£395 billion) in corporation tax is lost to avoidance.

The report reveals how successive UK governments have facilitated, on behalf of corporations, the construction of a global network in which hundreds of billions of pounds are funnelled away from national taxation, thereby slashing tax revenues required to pay for public services.

The TJN offers this definition: “A corporate tax haven is pretty much what most people would imagine it to be: a jurisdiction that provides facilities to help multinationals escape paying taxes elsewhere.”

The TJN compiles what is defined as a Corporate Tax Haven Index. It ranks according to how aggressively and extensively a territory and jurisdiction contributes towards assisting TNCs to avoid paying taxation.

The UK “corporate tax haven network,” explains the TJN, is by far the world’s greatest enabler of corporate tax avoidance. British territories and dependencies made up four of the top 10 places on the avoidance index who do their utmost to “proliferate corporate tax avoidance.” Such nefarious activity supplements the main UK centre of financial parasitism, the City of London—a swindler’s paradise which operates virtually as a law unto itself. The UK mainland is ranked just outside the top 10, at 13th on the list, and is the world’s biggest economy able to operate effectively as an offshore tax haven.

Eight jurisdictions are part of the UK-centred tax haven network of territories and dependencies: the British Virgin Islands, Bermuda, the Cayman Islands, Turks and Caicos Islands, Anguilla, the Isle of Man, Jersey and Guernsey. The report notes that if these British Overseas Territories and crown dependencies were calculated together, the UK would top the index overall.

Tax haven territories linked to Britain are responsible for approximately a third of the world’s corporate tax avoidance, a figure in excess of four times more than the next greatest tax haven, the Netherlands.

Many of these top-ranking tax haven territories, including the top three—British Virgin Islands, Bermuda, the Cayman Islands—are geographically tiny but are home to trillions of dollars of foreign direct investment motivated by reducing tax bills rather than any genuine economic activity.

Alex Cobham, chief executive at TJN, stated, “A handful of the richest countries have waged a world tax war so corrosive, they’ve broken down the global corporate tax system beyond repair.” Cobham continued, “The UK, Netherlands, Switzerland and Luxembourg, the Axis of Avoidance, line their own pockets at the expense of a crucial funding stream for sustainable human progress. The ability of governments across the world to tax multinational corporations in order to pay teachers’ wages, build hospitals and ensure a level playing field for local businesses has been deliberately and ruthlessly undermined.”

The Corporate Tax Avoidance Index is the first ever study of its size and scope to score each country’s system based on the degree to which it facilitates tax avoidance. This measure is then combined with the scale of its corporate activity to determine the share of global taxes avoided. The index covers 64 jurisdictions and their scores reflect how aggressively they use tax cuts and create loopholes, secrecy and other mechanisms to attract corporate activity.

The countries listed by the index, explains the TJN, have created a downward spiral of taxation in a “race to the bottom,” that increasingly depletes tax revenues and therefore public spending on crucial services. The TNCs utilise the transport infrastructure, postal services, scientific research, property rights and court systems paid for by public funds to maximise profits but make no contribution themselves. Therefore, the tax burden falls increasingly upon waged workers, who cannot avoid paying their taxes.

Countries compete with one another to provide the most favourable conditions for Foreign Direct Investment, tax loopholes and incentives to attract globally mobile capital. As a consequence, they create a downward spiral towards the bottom where the tax burden is removed almost entirely from the TNCs and hoisted entirely onto the shoulders of workers and small businesses. The profits of the TNCs increase in direct proportion to decreases in corporate taxation.

The TJN estimates that national governments are losing $500 billion in tax to corporate tax havens annually. The IMF recently estimated that some of the world’s poorest economies lose an incredible $200 billion per year, representing an even larger proportion of their collective GDP.

Tax avoidance assists the monopoly over commodity production enjoyed by the global corporations. They design their global production networks and internal trading to integrate into a web of subsidiaries and affiliates across tax havens around the globe. These affiliates trade with one another and it is estimated that up to one-third of all world trade is conducted within the TNCs.

The TNCs seek to shift their profits into the zero- or low-tax havens and conversely to shift all costs they incur into higher tax locations where they can be deducted against their tax bills.

This “transfer pricing” allows TNCs to adjust their internal pricing at which their affiliates trade with one another across borders in order to minimise profits in the countries with higher taxes and maximise profits in the tax havens.

The TJN points out how even the “headline” tax rates published by countries can be deliberately misleading. It warns, “Don’t be misled by a country’s headline tax rate: this rate might be bypassed through sweetheart deals between the tax administration and multinationals, and its tax system may well contain gaps and loopholes. Luxembourg, for instance, claims to tax corporate income at 26 percent. Yet Luxleaks [a financial scandal revealed in November 2014 via an investigation conducted by the International Consortium of Investigative Journalists] revealed that some multinationals were taxed at less than 1 percent.”

There can be little doubt the other members of “the axis of avoidance,” the UK, Netherlands and Switzerland, utilise similar tax avoidance tactics.

The global corporations enjoy rules and laws that are the polar opposite of those faced by workers. Employees must automatically pay their taxes to the state in deductions straight from their pay packet. Self-employed workers face financial punishment if they do not pay their taxes promptly. In stark contrast, governments like the UK allow the giant global corporations to avoid paying almost any taxes on their enormous profits into public funds.

The competing sections of the ruling class in Britain, who are fighting to ensure the strategic interests of the factions of big business they represent, are committed to ramping up the exploitation of the working class.

Central to this is ensuring the competitiveness of British capital through further deregulation of the economy and massive giveaways to the corporations and super-rich in tax concessions. Such policies were outlined by all the favoured candidates in the ongoing leadership contest to determine the next Conservative Party leader and UK prime minister. Some £84 billion in annual tax cuts was outlined by five of the remaining candidates. The favourite of the two final candidates, Boris Johnson, outlined £10 billion in tax cuts for 3 million high earners and denounced any policies that would “hike taxes to penal rates and attack wealth creation and private property …” His opponent, Jeremy Hunt, plans to slash corporation tax from its current level of 19 percent to below even that of the 12.5 percent in the Irish Republic.

Production organized by the TNCs under capitalism, involving the exploitation of hundreds of millions of workers, rather than providing for human need, only creates ever greater grotesque levels of private wealth that the super-rich hoard in their tax havens or fritter away on socially useless luxury amulets.

The billions of pounds of unpaid taxes by TNCs alone, without even including their gigantic profits, are an undeniable refutation of capitalist governments of all political stripes who insist there are “no funds” as “we are living beyond our means” and “cannot afford” to provide a decent standard of living for the working class. The reality is that there are gigantic sums that could be immediately utilized under a planned socialist economy to provide high-quality jobs, homes, education, transport, healthcare, cultural and leisure facilities for all.