British pound collapse at centre of global currency and financial storm

Nick Beams

Global currency and bond markets are being hit by a growing storm driven by the rise of the US dollar fueled by interest rate hikes by the US Federal Reserve, which could start to shake the financial system.

The turmoil reached a new level of intensity this week, sparked by the reaction of financial markets to the UK mini-budget which handed out £45 billion in tax cuts to the wealthy while increasing government debt by £72 billion.

People wait to enter the Bank of England in London, Tuesday, September 27, 2022. [AP Photo/Frank Augstein]

The reaction of the markets was to send the pound down to its lowest level in history. This led to a rapid sell-off of government bonds, sharply lifting their yields, or interest rates.

It was, in effect, a savage directive to the UK government of Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng that the handout to the wealthy had to be accompanied by deep cuts to government social spending, coupled with further suppression of wages.

Yesterday the International Monetary Fund (IMF) intervened to give voice to the concerns of international finance capital, issuing what the Financial Times called a “biting attack” on the government’s plan and calling for a “re-evaluation.”

The IMF said it was “closely monitoring” developments and was “engaged with the authorities” in the UK.

“Given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture,” it stated. “It is important that fiscal policy does not work at cross purposes to monetary policy.”

Like other central banks, the Bank of England (BoE) is lifting interest rates, inducing a recession, to try to clamp down on workers’ wage demands as inflation reaches its highest levels in more than four decades, now at double digit levels in the UK and threatening to go even higher. The bank is also reducing its holdings of financial assets.

But while the BoE is tightening monetary policy, the government’s handouts to the wealthy are to be financed by the creation of still more debt.

The IMF statement also showed it is focused on the development of the class struggle. “The nature of the UK measures will likely increase inequality,” it said.

The IMF is very conscious that the blatant handout of billions of pounds to the rich and super-rich, lifting inequality to new record highs, will make even more difficult the task of the trade unions in suppressing the struggle for wage increases. This struggle, now being joined by ever-wider sections of the British working class, is creating the basis for a general strike against the Tory government.

There was a near universal response from the representatives of finance capital to the UK government’s measures, insisting they had to be accompanied by cuts in government spending.

The Institute for Fiscal Studies said Kwarteng was gambling with the UK’s fiscal stability to push through the tax cuts “without even a semblance of an effort to make the public finance numbers add up.”

Vivek Paul, the UK chief investment strategist for the giant global hedge fund BlackRock, said the government’s moves were “just extraordinary.” The market had delivered its verdict on the government’s fiscal plans, and it was “not a good one.”

The situation is increasingly being described as a “crisis of confidence.”

For the financial system, confidence rests on two essential components: first, a belief that its political representatives have a clear plan for the overall economy and second, they can contain the most disruptive force of all—the movement of the working class. This confidence has been battered on both fronts.

Moreover, there are fears of mounting global turbulence. This is under conditions where the crisis of the British pound is the sharpest expression of the slide in all currency values against the dollar due to ongoing hikes in US interest rates. The Japanese yen is down to its lowest level in 25 years and other currencies are falling rapidly.

Those fears are focused on the bond market where prices are falling and yields are rising at an alarming rate.

In a comment yesterday, Bloomberg columnist John Authers noted: “This isn’t at core a currency crisis, but a crisis of confidence in the bond market, which is much more dangerous. The shock to gilt yields [those on UK 10-year bonds] in the last five trading days has been epic. No shock this great and this sudden has happened before.”

So far this month, the yield on the UK 10-year government bond has risen by 1.45 percentage points, the largest ever monthly rise according to data going back to 1979. In “normal” conditions rises in the order of just 0.5 percentage points, or even less, are considered large.

Authers raised the broader implications. Ever since the global financial crisis of 2008, he wrote, “everyone in the asset markets has known that there is one great risk above all others—that at some point confidence would run out and the bond market would revolt, causing a disorderly rise in yields. Then the edifice would fall.”

That day of reckoning was delayed because the central banks could always print more money when they did not have to worry about inflation. Those conditions have now changed.

“The UK appears to be the first case of a truly disorderly bond selloff, where the moves are so swift that they affect the functioning of the financial system,” Authers wrote. The whole world had to watch what was happening in Britain because it was a “test case for the confidence game that’s likely to be repeated everywhere.”

And while King Dollar reigns supreme at this point, the US is not exempt from the rising global storm.

Ralph Bostic, president of the Atlanta branch of the Fed, in comments reported by the Financial Times, said the UK situation had increased uncertainty over the trajectory of the US economy.

“The key question will be, what does this mean for ultimately weakening the European economy, which is an important consideration for how the US economy is going to perform.”

Susan Collins, the incoming president of the Boston branch of the Fed, speaking at an event on Monday, warned that a significant economic or geopolitical event could push the US economy into a recession as the central bank’s monetary policy tightens.

In a comment published in the Australian Financial Review on Monday, columnist Karen Maley cited remarks by Michael Hartnett, an investment strategist at Bank of America. Hartnett warned that what Maley termed a “savage” fall in bond prices would leave investors with no choice but to liquidate “the world’s most crowded trades,” namely the US dollar, US tech stocks and private equity.

According to Maley, Hartnett pointed out that “the present market shares many of the same traits that led to the 1987 share market collapse: including a volatile geopolitical situation, abnormal US markets far outperforming the rest of the world, and a lack of international coordination.”

The only thing missing from the list, as Maley noted, was a currency crisis. That is now clearly unfolding, centering on, but by no means confined to, the British pound.

And it has a historical resonance. The crisis of the pound and the UK financial system at the end of the 1960s, was the harbinger of a dollar crisis that led in August 1971 to the decision by US President Nixon to remove the gold backing from the US currency and end the Bretton Woods monetary system established after World War II.

Much has changed since that time, but the crisis of the British pound could well be a warning of the demise of the entire system of fiat currencies, based on the US dollar, which has prevailed since the Nixon decision.

Mélenchon’s Unsubmissive France party implodes over concocted domestic violence scandal

Samuel Tissot

In the past week, Russian and NATO officials have threatened to use strategic nuclear weapons that could claim hundreds of millions of lives in Europe. Meanwhile, France and Europe stand on the edge of a major economic and social crisis, with major energy and food shortages likely in the months ahead.

Jean-Luc Melenchon, right, and deputy Adrien Quatennens [AP Photo/Francois Mori]

Amid this crisis, however, the French media has been obsessed with the personal life of Unsubmissive France (LFI) ex-deputy leader Adrien Quatennens over the past two weeks. The scandal has set off a crisis in the New Popular Ecological and Social Union (NUPES) coalition, in which Jean-Luc Mélenchon’s LFI is the largest party.

On September 12, the weekly Le Canard Enchaîné published a leaked legal complaint lodged against Quatennens by his wife Céline, with whom he is in divorce proceedings. In a statement on September 18, Quatennens admitted to snatching his wife’s phone from her hands and slapping her once “in a context of extreme tension and mutual aggression.” The private complaint appears to have been illegally leaked by the police.

The complaint, made by Céline Quatennens to chart the deterioration of her relationship with her husband, is of a noncriminal nature. There has been no charge of physical assault or any other crime against Adrien Quatennens. Throughout the scandal, his wife’s stated wish that the issue remain private has been ignored by the media.

In response, Quatennens announced his withdrawal from the LFI leadership in a September 18 statement. Before his resignation, he was widely seen as LFI leader Jean Luc Mélenchon’s potential successor. Despite his resignation, the campaign has continued, with activists demanding he also resign his seat in the National Assembly, to which he was reelected earlier this year.

The WSWS holds no brief for Quatennens, an operative whose record reflects the bankrupt, pseudo-left politics of the LFI. He reliably supported the French war in Mali and spoke sympathetically on far-right protests by police officers in 2019.

It is apparent, however, that the French media and right-wing feminist forces around the #MeToo movement are concocting a massive scandal out of thin air. Their target is the party that carried the working class districts of most of France’s main cities in this year’s presidential elections. Calls to expel Quatennens from the National Assembly, i.e., to overturn an election based on a media frenzy initiated by the police, are deeply anti-democratic.

The goal of this operation is not to protect victims of domestic violence. It is to distract from mounting concern among workers over the war and whether they will be able to purchase food and heat their homes this winter, while entrenching the media influence of France’s #MeToo operatives.

On September 20, 500 “militant feminists” from the #relevefeminism collective, including many members of LFI and the NUPES coalition, published a letter in the daily Libération arguing that Quatennens’ withdrawal from LFI party life was insufficient. Even though he 'is not at this stage the subject of a judicial conviction,” it said, he should also be forced to resign as a deputy in the National Assembly. It claimed that Quatennens’ “confession makes him politically responsible. … The aggressors and perpetrators of violence cannot represent our political struggles.”

Top LFI officials have denounced Quatennens for domestic abuse, despite the noncriminal nature of his wife’s complaint. After Quatennens’ statement, LFI deputy Danièle Obono tweeted out a statement titled, “a slap is a violent act.” She added, “We see a world fractured by these violent acts. The class struggle is full of these violent acts. … Our friends, fathers, lovers, brothers commit these acts of violence.”

The press campaign also targeted Mélenchon. After the resignation of Quatennens, he tweeted, “Adrien decided to take it all on himself. I salute his dignity and his courage. I express my trust and affection for him.” He also denounced “police malpractice” and “media voyeurism.”

Caroline De Haas, a #NousToutes (#AllUsWomen) activist and member of the big-business Socialist Party (PS), which is also part of the NUPES coalition, denounced Mélenchon’s tweet as“a catastrophe.” French Prime Minister Elizabeth Borne, a member of President Macron’s Renaissance Party (formerly, La Republique En Marche!), stated that Mélenchon’s “extremely shocking” response “trivialized intra-familial violence.”

Révolution Permanante (RP), a website published by the pseudo-left French Morenoites, joined in the outrage of this reactionary campaign. An article attacked Mélenchon’s remarks as “largely shocking” and for having provoked a “legitimate outcry.”

The “militant feminists” of LFI, NUPES, RP and Macron’s government have found allies amongst the far right. Jordan Bardella, interim president of Marine Le Pen’s far-right National Front (RN), described the incident as the “moral wreckage of the left” and complained that Mélenchon was “defending the aggressor.”

On Friday, the media campaign intensified after LFI deputy Manuel Bompard commented that “a slap is never acceptable, but a slap is not equal to a man beating his wife every day.” In response, Macron’s equality minister Isabelle Rome tweeted to denounce “despicable statements that trivialize violence.” Green Party councilor and NUPES member Raphaëlle Rémy-Leleu stated that Bompard’s remarks were “making us [women] suffer.”

One might conclude from this wave of hypocrisy that France’s 35 million women are more at risk from Adrien Quatennens’ right hand than they are from the threats of nuclear war, food shortages and energy cutoffs in Europe.

In reality, not one of these official comments of outrage over Quatennens’ supposedly intolerable violence have an ounce of credibility. The Macron government and the PS waged a nearly decade-long war in Mali in which they repeatedly bombed civilians, killing men, women and children. As for Bardella, who denounces the alleged violence of the left, he is leading a party whose founder, Jean-Marie Le Pen, is primarily known for torturing Algerian civilians and denying the Holocaust.

One final question is raised, however: Why has the LFI imploded in the face of the media campaign against Quatennens? It reflects the enormous influence of middle class identity politics in bankrupt pseudo-left parties like the LFI.

During this April’s presidential elections, Mélenchon’s party won nearly 8 million votes, largely concentrated among urban workers. Having narrowly missed qualifying for the second round, Mélenchon did not try to mobilize the power of his electorate against war, austerity or the indifference to COVID-19 of both Macron and his opponent, neo-fascist Marine Le Pen. Refusing to call strikes or protests, he worked to defuse the political momentum he had acquired through the vote. Indeed, Mélenchon announced that he could serve as prime minister under either Macron or Le Pen.

It was an unmistakable sign that the LFI was doing everything it could to strangle the development of opposition in the working class to France’s bankrupt ruling elites.

Now, as this establishment whips up a frenzy against Quatennens, the LFI again has no substantial opposition to propose: It has itself supported the NATO wars and the bank bailouts that are driving the surge of prices. It is therefore incapable of pointing out the hypocrisy of its right-wing critics’ denunciations of violence and moreover hostile to mobilizing the working class in its own defense.

COVID-19 infection significantly increases one’s risk of a neurological disorder

Benjamin Mateus

Last week, the latest comprehensive study on Long COVID was published in Nature Medicine, underscoring once again the recklessness and criminality of the “forever COVID” policies implemented by nearly every world government. The study examined nine categories of composite neurological disorders and found that a bout with COVID-19 increases one’s risk of a neurological disorder by 42 percent. In absolute terms, seven out of every 100 people with COVID-19 involved in the study suffered from a neurological disorder.

The nine categories of disorder evaluated included cerebrovascular, cognition and memory, disorders of peripheral nerves, episodic disorders, extrapyramidal and movement, mental health, musculoskeletal, sensory, and other neurological or related conditions such as Guillain-Barre and encephalitis, with hazard ratios for each category shown in the left-hand column in the figure below.

Risks and 12-month burdens of incident post-acute COVID-19 composite neurological outcomes compared with the contemporary control cohort. Source: Nature Medicine, open access, study by Evan Xu, Yan Xie, and Ziyad Al-Aly.

Each of the nine disorder categories saw risks elevated, with the most substantial increase affecting cognition and memory disorders. Within the nine categories are included common conditions such as strokes, Alzheimer’s disease, headaches and seizures, Parkinson’s-like symptoms, anxiety and depression, dizziness, loss of smell and taste, as well as ringing in the ears. Each of these disorders can profoundly impact one’s quality of life.

The study was led by Dr. Ziyad Al-Aly, the Chief of research and Education Service at Veterans Affairs St. Louis Health Care System, a nephrologist by training and expert on Long COVID, along with Drs. Benjamin Bowe and Yan Xie. In total, 154,068 people with COVID-19 were evaluated in the study, over more than 400 days on average. They were compared with 5.6 million contemporary and 5.8 million historical controls, which provide a highly robust data set for their analyses.

In a widely-shared thread on the study on Twitter, Dr. Al-Aly noted, “Risks of memory and cognitive disorders, sensory disorders and disorders including Guillain-Barré [immune disorder in which the immune system attacks the nerves and causes weakness, in rare cases life-threatening] and encephalitis or encephalopathy [inflammation of the brain] is stronger in young adults. The effects of these disorders on younger lives are profound and cannot be overstated.”

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In the discussion section of the study, the authors note pointedly, “It is imperative that we recognize the enormous challenges posed by Long COVID and all its downstream long-term consequences. Meeting these challenges requires urgent and coordinated–but so far absent–global, national, and regional response strategies.”

They warn that the burden of neurologic disease associated with COVID-19 infections will have “profound ramifications” on the health of the population, health systems, and economic productivity, including risks of “widening inequities.” These warnings have been informed by the meticulous research that Dr. Al-Aly and his team have conducted throughout the pandemic on the clinical aspects of Post-Acute Sequalae SARS-CoV-2 infection (PASC), otherwise known as Long COVID.

In a recent interview, Dr. Al-Aly noted that his interest in Long COVID began when he read an op-ed in the New York Times by Fiona Lowenstein chronicling her ordeal with Long COVID after recovering from her infection in April 2020. A curious and honest researcher, Dr. Al-Aly asked, “What is Long COVID?” and “Who is it affecting?” As he explained, “We took a high-dimensional approach to leave no stone unturned and characterize the post-acute sequelae of COVID-19.”

Access to the US Department of Veterans Affairs’ integrated electronic health records allowed Dr. Al-Aly and his team at the Washington University School of Medicine in St. Louis, Missouri, to review the charts for over 74,000 veterans infected with SARS-CoV-2 for months after and compare them to contemporary and historical controls to address the relative and absolute risk of the impact of COVID-19 on population health.

The results were astonishing. Dr. Al-Aly recalled that the “breadth of organ dysfunction” people were experiencing shook him to his core. More concerning for him was that even those with mild symptoms that precluded the need for hospital or ICU admission were still significantly impacted.

Dr. Al-Aly and his team have also conducted the following studies that looked at Long-COVID’s impact on the cardiovascular system, kidneys, metabolic function, and mental health. In each category, the outcomes proved detrimental.

• The relative risk of acute kidney injury was two-fold higher compared to contemporary and historical controls affecting one percent of COVID-infected individuals. A small but significant minority suffered a considerable decline in kidney function compared to those without infection.
• For any cardiovascular disease, the risk was increased by 60 percent in the first year after acute COVID infection, with approximately 4.5 percent more people developing these conditions. For major adverse cardiovascular events, the absolute increased risk was 2.3 percent. Although these risks were considerable for patients admitted to hospitals with severe COVID infections, even patients with mild disease had significantly increased cardiovascular outcomes.
• Examining mental health disorders, they found that COVID-19 infection caused a 35 percent increase in relative risk for anxiety disorders and a 39 percent increase in depression. These patients were also experiencing higher use of medications to control their symptoms and opioid prescriptions. Additionally, they suffered poor sleep and cognitive declines. On this issue, Dr. Al-Aly warned, “We’ve seen early signals in our data–which I hope does not continue–of a resurgence of opioid use, specifically in people with SARS-CoV-2 infection. That demands our attention to nip it in the bud.”
• Similarly, there was a 40 percent increase in diabetes with an excess disease burden between 1 and 2 percent. Many who developed diabetes had to be prescribed medication to control their elevated blood sugars. When these are extrapolated for the population that required hospitalization, the figures are considerable at around 8 to 14 percent. Even for those with “mild” COVID-19, the absolute risk increased by 5 percent above non-infected controls.
• Earlier this year, Dr. Al-Aly and his team published a study that found that people with breakthrough infection after being vaccinated only had a 15 percent lower chance of developing Long COVID and were at increased risk of death and organ damage compared to controls who never were infected. This remained true when compared to seasonal flu, dispelling the constant reference by the bourgeois press that COVID is no more harmful than the flu.

Dr. Al-Aly has compared the tragic deaths and hospitalizations from COVID-19 to the tip of an enormous iceberg, with the massive long-term consequences associated with Long COVID lying below the water line. An umbrella term, Long COVID is more than just brain fog and fatigue. It can impact almost every organ in the body, and imaging and autopsy reports have proven the profound dangers that COVID-19 continues to pose to the population.

In their latest study, Dr. Al-Aly et al. make important observations on the long-term neurological consequences of the pandemic, writing, “Given the colossal scale of the pandemic, and even though the absolute numbers reported in this work are small, these may translate into a large number of affected individuals around the world–and this will likely contribute to a rise in the burden of neurological disorders.”

They add, “This places more emphasis on the continued need for multipronged primary prevention strategies through nonpharmaceutical interventions (for example, masking) and vaccines to reduce–to the extent possible–the risk of contracting SARS-CoV-2. There is also an urgent need to develop long-term sustainable strategies to prevent mass infection with SARS-CoV-2 and to determine whether and how these long-term neurological (and other) complications could be prevented or otherwise mitigated in people who are already infected with SARS-CoV-2.”

What makes these peer-reviewed studies critical is not just their presentation of the medical dangers posed to people by the COVID-19 pandemic. They are also of a political character in that the purpose of these works has been, from the outset, to inform the public of the scale of the consequence of the pandemic policies that have been implemented. The horrific results of the pandemic are counted not only in the estimated over 20 million deaths from COVID-19 globally, but also in the tens of millions of people suffering from debilitating Long COVID worldwide.

In his Twitter thread, Dr. Al-Aly observed, “The best way to prevent Long COVID is to prevent COVID in the first place.” This speaks to the profound need for a global elimination strategy to stop the pandemic once and for all. In the absence of a worldwide anti-COVID movement, uniting workers and scientists in every country, the pandemic threatens to continue, with new variants producing wave after wave of mass infection, death and debilitation of millions more with Long COVID.

US, Russia trade threats of nuclear war as referendums in East Ukraine end

Clara Weiss

The voting period for the referendums in the four Russian-occupied regions in eastern and southeastern Ukraine — Kherson, Zaporizhzhia, Lugansk and Donetsk — ended Tuesday night, as US and Russian officials escalated threats of nuclear war. The Kremlin has declared that all four regions have voted in favor of joining the Russian Federation. 

On Tuesday, former Russian president and deputy head of the Security Council, Dmitry Medvedev, threatened that Russia could deploy nuclear weapons to defend its territories, including those it now lays claim to in East Ukraine, insisting that these threats were “certainly not a bluff.” 

Medvedev thus reiterated warnings made by Russian President Vladimir Putin last, when he announced the partial mobilization of 300,000 reservists in the wake of Russia’s military debacle in the Kharkiv region. After outlining the scale of the imperialist aggression Russia was confronting, and the aims of the imperialist powers to break up and “destroy” Russia, Putin threatened that the Kremlin is prepared to resort to nuclear weapons, stating, “this is not a bluff.” 

Medvedev expressed the hope that the prospect of “nuclear apocalypse” would deter NATO from further escalating the war against Russia in Ukraine, which the imperialist powers provoked and prepared for over many years. But these hopes are as bankrupt as they are delusionary.

Far from backing off, Washington and NATO have insisted that they will “never recognize” the territories in East Ukraine as part of Russia. NATO general secretary Jens Stoltenberg tweeted on Tuesday that he had assured Ukrainian President Volodymyr Zelensky of NATO’s “unwavering support for Ukraine’s sovereignty.” He insisted that the “sham referenda” had “no legitimacy,” “These lands are Ukraine.”

An adviser to Zelensky, Mykhailo Podolyak, responded to Medvedev by insisting, “We will continue to de-occupy our territory regardless [of the threat of nuclear strikes].”

In what the World Socialist Web Site has accurately described as nuclear brinkmanship, Western officials have responded to the open danger of nuclear war with a combination of callous dismissals and threats that are aimed to further fuel the dangerous escalation with Russia. In an interview with CBS’ “60 minutes” aired on Sunday night, US Secretary of State Antony Blinken threatened Russia with “horrific consequences” should it deploy nuclear weapons in Ukraine. 

Blinken said, “It’s very important that Moscow hear from us and know from us that the consequences would be horrific, and we’ve made that very clear.” He added that using nuclear weapons “would have catastrophic effects for, of course, the country using them, but for many others as well.”

The escalating threats of nuclear war came as it was confirmed that three explosions at the two German-Russian gas pipelines Nord Stream 1 and Nord Stream 2 took place in the night from Sunday to Monday. The explosions resulted in massive leaks of gas into the Baltic Sea. While the majority shares for both pipelines belongs to Russia’s state-owned company Gazprom, the German companies Wintershall, and Uniper, the French Engie, as well as the Austrian OMV and the British Shell all helped build the pipelines. 

In an extraordinarily provocative move, Radosław Sikorski, a Polish member of the European Parliament and former foreign minister of Poland, effectively suggested that the US was behind the explosions. After tweeting an image of the underwater explosion, writing, “Thank you, USA”, Sikorski retweeted a clip with US President Joe Biden from February 7, in which Biden threatened “If Russia invades...then there will be no longer a Nord Stream 2. We will bring an end to it.”

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As the war tensions between Russia and NATO are reaching fever pitch, Russian society has been thrown into turmoil by the mobilization of 300,000 reservists. While falling short of the demands for full mobilization and the proclamation of martial law, the partial mobilization is upending the lives of millions of people over night. It is a desperate effort to turn around the tide in a war that is believed to have claimed the lives of tens of thousands of Russian soldiers, and has left the remaining troops with low morale.

While Putin promised that only men with combat experience would be drafted, many reports suggest that elderly men, as well as disabled people and countless young men without any combat experience are being drafted. In the face of massive criticism, including from pro-Putin figures, the Kremlin has now admitted that “mistakes” had been made when draft notices were sent out, pledging that these would be “corrected.”

Service in the Russian army has long been widely feared in the population, as it is associated — even in peace times — with widespread and violent physical, emotional and psychological abuse of draftees, as well as abhorrent social conditions facing the soldiers. Families that in any way could afford to do so have traditionally sought to buy out their sons from military service. However, the partial mobilization order also affects those who had earlier been able to buy themselves out. Those resisting and avoiding the draft will face draconian prison sentences.

A large section of the middle class has responded to the partial mobilization with a frantic effort to flee the country. As soon as Putin announced the partial mobilization, flights to Turkey and Georgia, two of the few countries where Russians can still travel without restrictions, were booked out. For the past week, traffic jams stretching many miles and lasting 24 to 48 hours have formed at virtually all border checkpoints to Finland, Georgia, Kazakhstan and other neighboring countries. Over 100,000 have fled to Kazakhstan alone.  

There have also been reported attacks on recruitment centers, with a 25-year-old shooting and critical wounding a draft officer, apparently out of anger about the drafting of his friend.

The Western media has cheered on those trying to flee the draft. The New York Times and other outlets that are associated with the US military and intelligence apparatus and have promoted and justified every criminal war waged by the imperialist powers over the past decades, have also promoted the protests against the mobilization that were called by the pro-NATO liberal opposition and have been dominated by layers of the middle class. 

Significant protests against mobilization have also erupted in Dagestan, a deeply impoverished and predominantly Muslim region in the North Caucasus. These protests, which have also been cheered on widely by the pro-imperialist press, appear to have an ethnic overtone in a region where resentment over the Kremlin’s reactionary policies has long been exploited by separatist tendencies and the imperialist powers for the most reactionary purposes. Dagestan directly borders Chechnya, where the Kremlin has waged two extremely bloody wars between 1994 and 2009. Reports also suggest that a disproportionate number of men have been drafted from Dagestan to the war since February.

The Kremlin has cracked down on all of these protests with mass arrests.

While the misnamed “liberal opposition” holds its protests under the fraudulent banner “no to war,” far from being “anti-war” it in fact speaks for sections of the oligarchy, the upper middle class and the state apparatus that advocate a direct line up behind the imperialist powers as they are preparing a carve-up of Russia, which would inevitably entail a series of wars and civil wars. 

Ultimately, the social forces behind the liberal opposition are, no less than the Putin regime itself, the reactionary outgrowth of the Stalinist destruction of the Soviet Union and the restoration of capitalism. Their opposition to the Kremlin and its war in Ukraine comes from the right, not from the left. Whatever their bitter conflicts over foreign policy, all factions of the oligarchy are united in their deep hostility to the working class and a fear of the emergence of a socialist anti-war movement in the Russian and international working class. 

The vast majority of the Russian population has neither the financial means to flee nor a place to go. Battered by Western economic warfare, which has laid waste to entire sections of industry such as auto, Russian workers are now facing the horrific and immediate prospect of mass slaughter not only in Ukraine but also in Russia itself.

Manual Scavenging: Deep Rooted Problem In India

Arpita Paliya

The basic need of people accommodate food, clothing and shelter. These three are important for the existence and survival of human beings, but presently, survival is not the only segment which the human beings look at. The aspects like dignity, self respect, freedom, justice also plays a very crucial role in leading a respectful and meaningful life. By this analyses, the work done by the manual scavengers, might help them in generating very minimal amount of money, but the discrimination faced by them forces them to remain in the same position. This amalgamation of economic, social, political exclusion not  only restricts them to have a better standard of living, but also violates their fundamental as well as human rights.

In India, caste plays a major role in determining the work and dignity of the individual. Caste did not effect the individual at later stages of life, but since the first cry of the child in this world. There are many sections in the society which are marginalized politically, socially, economically, psychologically. In India, this discriminatory sections particularly include women, dalits, minorities, and adivasis. Some of these are restricted to a particular area and the profession, for eg: The work of manual scavenging engages people who are of dalit identity.

Manual Scavenger is defined as “a person engaged in or employed for manually carrying human excreta”. The history of manual scavenging goes back to the time of british rule in India when municipalities were constituted. The use of containers in toilets were prominent, that needed to be emptied daily. After the discovery of flush toilets, this practise vanished from the western world, but left its footprints in developing countries like India.

Legal vs Practise

Legally, manual scavenging is banned, caste apartheid and poverty perpetuate this practise. Where we are building up our economy and is known for being the largest democracy the practise of manual scavenging is still prevalent. Constitution and constitutional bodies promises to preserve and protect the rights of the Indian citizens, these promises are very elegantly written but sometimes fails to deliver with same elegance. India as a country is advancing in various segments like technology, economy, society etc. but still accommodates practices which directly poses threat to the life of the individual like practise of manual scavenging.

Employment of manual scavengers and construction of dry latrins act (1993), under this act manual scavenging is prohibited in India and construction of insanitary latrins should not takes place, manual cleaning of sewers without protected gears is also prohibited. In the same year, the body named National Commission for Safai Karamchari was established in order to coordinate all the aspects related to prohibition of manual scavenging. Also, study various schemes and make recommendations related to the same.

In 2013, The Prohibition of Employment as Manual Scavengers and their Rehabilitation Act  was passed which made it mandatory for municipalities, cantonment boards and railway authorities to construct adequate number of sanitary community latrines within three years of this act coming into force. This act also brought the factor of penalization, if a person employs a manual scavenger or construct insanitary latrine, shall be obligated to pay fine up to Rs. 50,000 or face imprisonment of up to 1 year or both. This act is not limited to individuals but also includes local authorities or agencies where the hiring is prohibited for hazardous cleaning i.e. without protective gear and other safety precautions. And the penalty goes up to 2 years of imprisonment or fine up to 2 lakh or both.

The Hindu in 2019, reported that “814 deaths of manual scavengers engaged in cleaning sewers and septic tanks have been recorded in India from 1993 to July 2019 in 20 States and UTs. Of these 20 States, details of compensation received by the family of the deceased is available for only 11 States”. The lack of data becomes a major restricting factors in today’s world where every decision is influenced by data directly or indirectly. This factor of unavailability or lack of data works as a shield for government and barred them from being accountable.  The same can be witnessed through the recent declaration by the government in the Parliament, whereby “no deaths due to manual scavenging per se were reported in the country; however, 941 deaths were reported while the cleaning of sewer/septic tanks”.

Conclusion and Recommendations

As, the world is changing at a faster pace, there is an need to eliminate such inhumane practices and live up to the expectations of our constitution makers. Fundamental rights enshrined in the constitution and legal safeguards for the protection of individuals becomes null and void if the execution is weak. Recently, there are initiatives taken by various ministries to help manual scavengers in coming out of such grave, like the formation of an “Action Plan” prepared by the ministry of Social Justice and Empowerment for the year 2020-2021. These plans include steps like Capital Subsidy for Self Employment Projects, Skill Development Training, Health-cum-awareness camps etc. Even after the initiatives by government and various organization these practices are highly prevalent and the people involved face all types of discrimination and challenges to overcome the atrocities.

The challenges involved are multi dimensional like caste based discrimination, social beliefs and stigmas, lack of technology advancement, lack of awareness, labour rights, lack of data or unclear data etc. Therefore, the ways for combating this issue should also be multifaceted. It can involve various stakeholders like government, Non-profit organizations, individual volunteers to spread across the awareness regarding the problems faced by these communities. Along with the awareness, there is a need to awaken the empathetic attitude of the people towards the affected population which can help in reducing the social stigmas attached to it. The Non-profit organizations can also help the government in generating data, so that the accountability of the government remains on ground. The country should build up robots and the relative technological tools to reduce the need of manual labour.

In the end, the effective implementation of the existing policies and advancement in those policies according to the need of an hour should be taken care of. Hence, these deep rooted problems cannot be solved by the action of one individual or one sector, it can only be developed with the acceptance attitude of general public and providing alternatives by different stakeholders to the affected population.

Pound plummets as UK Tory government and Labour fight over how to protect profits

Thomas Scripps

UK Chancellor Kwasi Kwarteng’s announcement of £45 billion in tax cuts sent the pound plummeting over the weekend.

Sterling fell by nearly 5 percent at one stage on Monday, with £1 trading at $1.035, falling below its all-time 1985 low. The Japanese Nomura bank was the first to forecast parity between the two, as early as the end of November, and a fall to $0.975 by the end of the year.

Prime Minister Liz Truss (left) and Chancellor Kwasi Kwarteng discuss their Growth Plan ahead of a fiscal statement to the House of Commons on September 23 . 10 Downing Street, September 22, 2022 [Photo by Rory Arnold/No 10 Downing Street/Flickr / CC BY-NC-ND 4.0]

Former US Treasury Secretary Larry Summers told Bloomberg, “It would not surprise me if the pound eventually gets below a dollar.” He commented, “It makes me very sorry to say, but I think the UK is behaving a bit like an emerging market turning itself into a submerging market.”

Mark Dowding, head investment officer at BlueBay Asset Management, told the Financial Times, “There’s a real risk that international investors lose confidence in the UK government and that leads to a run on sterling.”

There were broader signs of a crash in market confidence in the UK, as prices for government bonds plunged, with yields on two-year and five-year gilts rising to their highest rates since the financial crash to compensate. Ten-year gilt yields were at their highest since 2010 and are on track for their worst month since 1957.

The collapse in sterling will have devastating immediate and long-term consequences. As the pound weakens relative to other currencies, the cost of imports to Britain increases, raising the prices paid by workers at the petrol pump, in supermarkets and on energy bills.

Oil and gas are priced globally in dollars, with the UK importing 11 percent of its oil consumption and 50 percent of its gas. More than 50 percent of the food eaten in the UK is imported. The already high rate of inflation (12.3 percent RPI) will be driven up further.

To stop the pound’s slide creating panic among investors, the Bank of England (BoE) will be pushed to raise interest rates even faster than already planned. The markets have priced in a rise from the current rate of 2.25 percent to nearly 4 percent by November and more than 6 percent by next summer.

In a statement Monday evening, the Bank announced that it “will not hesitate to change interest rates as necessary”.

The World Socialist Web Site explained in August that the BoE’s planned interest rate rises were intended to “deepen the long recession now begun in the UK… push up unemployment and social hardship for millions.” Its aim, facing several major strikes, “is to counter this rising wave of militancy by forcing desperate workers to accept further savage pay cuts or face mass unemployment and financial ruin.”

The Bank of England building viewed from Lombard Street. [Photo by DAVID ILIFF / CC BY-SA 4.0]

Kwarteng’s announcement has accelerated that process, as the Bank seeks to prove to international finance the British ruling class will carry out whatever assault on the working class is necessary to secure investments. The sharpest falls in share prices Monday were among banks, housebuilders and retailers, showing “the City is anticipating rising bad debts, falling demand for houses, and a deeper consumer spending squeeze,” wrote the Guardian’s business correspondent Graeme Wearden.

Kwarteng is crashing the already weak UK economy to carry out a massive redistribution of wealth from the working class to the rich. According to analysis by the Resolution Foundation think tank, two thirds of the gains from personal income tax cuts will go to the richest 20 percent of households, with 45 percent going to the top 5 percent. Only 12 percent will go to the poorest half of households.

Research by Andy Summers and Arun Advani at the London School of Economics and Warwick University shows £1 billion will be given to just 2,500 of the richest individuals in the UK, with incomes of more than £3.5 million a year.

The billions lost to the treasury will be taken out of public services and public sector wages. Torsten Bell, head of the Resolution Foundation, commented,“The reality of double-digit inflation will tightly squeeze the budgets of schools and hospitals, as well as households…

“In the longer term, there are clear trade-offs between the £45 billion tax cuts announced last week and the quantity and quality of public services.”

Paul Johnson, head of the Institute for Fiscal Studies, agreed in comments to The Times, “There’s a real problem for schools and hospitals doing even the pay rises that they’re doing. It’s going to be a real squeeze.”

The uproar in financial circles, echoed by the Labour Party, over Kwarteng’s actions is driven by the fact that this “squeeze” has not taken place already. Former chancellor George Osborne, the architect of austerity under Conservative prime minister David Cameron, spelled out their concerns on Channel 4’s Andrew Neil Show, insisting, “You can’t just borrow your way to a low-tax economy.” He added, crucially, “The schizophrenia has to be resolved. You can’t have small-state taxes and big-state spending.”

There are reports of letters of no confidence already being submitted in Truss’s leadership by Tory MPs who agree with Osborne’s verdict.

Speaking for big business, UBS Global Wealth Management’s chief economist Paul Donovan declared of Truss’s spending, “Modern monetary theory has been taken into a corner by the bond markets and beaten up…

“This also reminds investors that modern politics produces parties that are more extreme than either the voter or the investor consensus.

“Investors seem inclined to regard the UK Conservative Party as a doomsday cult.”

The Labour Party is pitching itself as the “responsible” protector of financial and corporate interests. Shadow Chancellor Rachel Reeves told the party’s ongoing conference that she would “take on the Tories on economic competence” and that “It is becoming clearer by the day that Labour is the party of economic responsibility and the party of social justice.”

References to “social justice” are a fraud. If Truss had spent £45 billion of borrowed money on anything, except perhaps NATO’s war on Russia, the response would have been the same. Had the money gone by some cataclysmic error to the working class, Labour’s outrage would have been off the charts.

Kwarteng answered the concerns of global investors Monday afternoon. Pledging to continue “wider supply side policies to grow the economy,” including “changes to the planning system, business regulations,” and “regulatory reforms to ensure the UK’s financial services sector remains globally competitive,” he announced the release of a Medium-Term Fiscal Plan on November 23. “The Fiscal Plan will set out further details on the government’s fiscal rules, including ensuring that debt falls as a share of GDP in the medium term.”

Whether this is economically possible or not, it is a statement of intent that the government will underwrite its smash-and-grab policies with savage spending cuts and an unprecedented attack on the working class, rammed through using a raft of planned anti-strike and anti-protest legislation.

The turmoil in the UK economy pours more fuel on the raging class struggle in the UK. The ruling class will seek to make the working class pay every penny of the crisis, while price rises and unemployment spur fierce resistance in every workplace. As industrial conflicts burst through the political and organisational barriers established by the trade union bureaucracy, workers will be forced to organise themselves on a new perspective for a fight against the Tory government, the Labour Party and their corporate and financial overseers.

Preparing for class war, Sri Lankan president declares “high security zones”

K. Ratnayake

On Friday night, Sri Lankan President Ranil Wickremesinghe issued an extraordinary notice announcing a number of “high security zones” (HSZs) in the capital Colombo and its outskirts. In declaring these measures, Wickremesinghe is preparing for class war against the working class and poor as he implements savage austerity measures under the dictates of International Monetary Fund (IMF).

These HSZs are reminiscent of the high security zones established by the successive governments throughout the county, including in Colombo, during the 26-year bloody anti-Tamil communal war against the separatist Liberation Tigers of Tamil Eelam. These measures and the Prevention of Terrorism Act (PTA) were used to repress the Tamil minority outside of the war zones in the north and east, as well as to suppress class struggles.   

Wickremesinghe announced the latest repressive orders under the Official Secret Act, another piece of anti-democratic legislation in Sri Lanka. Zones have been declared covering the offices and residences of the president, prime minister and defense chief, the defence and police headquarters, the parliament complex, the court complex and the attorney general’s premises.

The defence secretary has been appointed as the “competent authority” to implement the measures cited in the government gazette. The following are the measures announced under the declaration:

• Without the prior written permission of the inspector general or senior deputy inspector general of the police in charge of the Western Province, no person shall conduct or hold a public gathering or procession on a road, ground, shore or other open area situated within the HSZs.
• Construction work and vehicle parking are prohibited within the HSZs without a permit from the defence secretary.
• Occupants of residences inside HSZs must produce a list of their permanent or temporary residents to the heads of the police stations in their respective areas. A change in occupancy must be reported to the police within 24 hours.
• Government departments and private institutions within the HSZs must submit a list of all their employees.
• Police have the authority to enter and search any premises in the HSZs. Police have powers to arrest supposed suspect persons, interrogate them and file cases against them.
• Persons taken into custody in connection with offences announced through the gazette can only be granted bail by a High Court. If convicted, they can be jailed for a period ranging from six months to two years and face a 2,000 rupee ($US6) fine.

The state minister for defence told the media yesterday that anyone who wants to hold protests outside of these zones must also get permission six hours before the event from the police or defence authorities. Only “lawful” protests will be allowed. This vague term can be used to ban any anti-government protest.

The brutality of these measures was shown when the police attacked protests organised by the Socialist Student Union of the Janatha Vimukthi Peramuna (JVP) in Colombo on Saturday. Notwithstanding our sharp opposition to this bourgeois opposition party, the Socialist Equality Party (SEP) condemns this police attack. 

The Wickremesinghe government and the ruling class in Sri Lanka are sitting on a social volcano. Mass struggles demanding the resignation of former President Gotabhaya Rajapakse and his government erupted in early April. Millions of workers joined these struggles in one-day general strikes on April 28 and May 6, with the support of all oppressed throughout the country.

Amidst these protests, the government led by Prime Minister Mahinda Rajapakse was forced to resign in May. President Rajapakse fled the country on July 13 and resigned.

The widely hated Wickremesinghe, a stooge of the US imperialism, was appointed as acting president by the fleeing Rajapakse. He was then installed as the President by the discredited parliament. Wickremesinghe immediately began intensifying repression against anti-government protesters, arresting hundreds. In August, he detained three student activists participating in demonstrations for 90 days under the PTA.

Wickremesinghe has also accelerated the IMF austerity drive, imposing huge taxes and further increasing the prices of essential goods, creating unbearable living conditions for workers and poor. The national inflation rate skyrocketed to 70 percent in August, while food inflation rose to 85 percent.

Starvation is on the rise. The World Food Program reported in early August that 3.4 million people were being prioritized to receive assistance. About 6.3 million people were estimated to be food insecure – that is skipping meals. The health service is on the brink of total collapse, without essential drugs and equipment. Hundreds of thousands of jobs have already been wiped out due to the closure of factories, small shops and restaurants.

More ruthless measures prescribed by the IMF are being prepared, including privatization, the destruction of hundreds of thousands of state jobs and the slashing of meager subsidies. The government is planning to cut down state expenditure to create a 2.3 percent budget surplus in 2025, from the 9.8 percent deficit this year.

Sri Lankan Central Bank Governor Nandalal Weerasinghe, referring to these measures, said: “We are not out of the woods yet though we are managing painfully. The transition will be a difficult period.” This brutal “difficult period” is to be imposed on the workers and poor to defend the tottering capitalist profit system.

As in every country, both the US-NATO proxy war against Russia in Ukraine against Russia and the the COVID-19 pandemic have deepened the crisis. The escalation of the war by American and European imperialism, combined with Russia’s reactionary nationalist policy, threatens to develop into a nuclear war.

Wickremesinghe’s latest draconian measures are further steps toward dictatorial rule. Establishing HSZs are an admission that the entire ruling establishment and the state apparatus are under threat of a mass uprising.

Opposition Samagi Jana Balawegaya (SJB) leader Sajith Premadasa, hypocritically criticising the latest measures, said the government has “unleashed three forms of repression against the people including declaring several high-security zones, the misuse of the PTA to imprison student leaders and the repression of the media.” The SJB is an offshoot of Wickremesinghe’s rightwing United National Party and is responsible for its bloody suppression of workers and poor.

JVP leader Anura Kumara Dissanayake, minimizing the danger of Wickremesinghe’s repressive measures, said: “The government will not be able to stop that movement through these insignificant attacks and threats.” He warned: “It will not be long before scores of citizens surround the city of Colombo.”

A leader of the JVP-controlled Trade Union Coordinating Committee (TUCC) and Teacher Services Union, Mahinda Jayasinghe, boasted that the trade union movement “will not be frightened by imprisonments” and asked the president to “widen the prisons.”

The statements of the JVP and TUCC leaders are cynical. These empty threats will not stop Wickremesinghe’s dictatorial drive.

Like the SJB, the JVP called for an interim government of parties in the parliament to divert and trap the April-July popular uprising. The TUCC and another front called the Trade Union and Mass Movement limited workers struggles to one-day general strikes and helped to direct the mass opposition behind the SJB and JVP demand for an interim regime.

The pseudo-left Frontline Socialist Party (FSP) and its trade unions played a leading role by treacherously joining this campaign.

Their betrayal of the mass opposition paved the way for Wickremesinghe. They are responsible for his repressive actions.

There is a growing opposition among workers and poor against the Wickremesinghe regime’s attacks on living and social conditions. These parties and trade unions, fearful of the eruption of struggles of workers poor, are preparing to head them off.