DIG OFF AIR from Behind the News 26/10/08.

IN DEEP TROUBLE A dim realization emerging this week from establishment figures that its not just a financial crash or a credit crunch but something wrong with the capitalist system. In the US former Federal Reserve guru, Alan Greenspan, admitted that there was something wrong with his ideology about the market. Other people have been making their own comments. In an article in the Christchurch Press this week John Minto wrote

“With such a dramatic crisis unfolding the level of debate has been abysmal. Nowhere in the mainstream media is there more than the
most superficial criticism of the markets. The prevailing mood seems to be that once this crisis is over things will more or less
return to normal with the current economic structure essentially unchanged.

Back in the 1980s Roger Douglas also told us there is no alternative to the free market.
This is as untrue as it was then.”

In Wellington Bryan Pepperell is trying to get the city council to face up to the crisis. In a letter to the Mayor, the Council and the council Chief Executive Bryan says

“In March of this year I restated my on going concern that we were headed for financial disaster. This was based on my analysis of financial information that is available to the public and my experience watching the markets and historical evidence. I’m not the only person to have warned of the coming crisis. Your response to my concerns was to increase rates and further shift the commercial rates onto the residential rates bill.

In 2006 I stated that the property market was over inflated and that we were setting rates on the wrong assumptions. This met with derogatory remarks and was dismissed as doom and gloom. . A further response by Council in one case was to vote a fifty percent increase to a Council director and increases for other Council directors well above the wage and salary increases of ratepayers who are required to pay for this Council largess.

We now need an emergency strategy to bring costs down so they are manageable for the ratepayers.”

Finally from Moscow socialist Boris Kargalitsky on Znet He says

“We are witnessing a fundamental breakdown of the global financial system. Under such conditions, the usual cyclical recession turns into an uncontrollable disaster for which there is no miracle cure. And the problem is not how to stave off the crisis or soften its impact, but how to devise a new economic system to replace the ruins left by the current economic model.

The attempt to build a world order based on a free market economy has turned into a catastrophe on a global scale. The only good news is that the global economy will collapse long before humanity has time to destroy the planet's ecology. Thus, we still have a chance to save Earth from physical extinction, and that is the best news to come out of all of this.

Who knows, there may be a silver lining to the current global economic crisis after all. Our descendants may look back at it as marking the start of a new, more humane epoch in history.”

What makes capitalism tick? That’s the title of comments by Jim Delahunty on the background to the crisis.

Comment 1 – getting something for nothing.

Like the feudal system before it capitalism grows by getting something for nothing. The feudal lords owned the land and the peasants on it. They exploited them by making them work a set number of days per year for them for nothing.

When capitalism took over it stopped the lords owning the peasants but the new business model separated the peasant from his land and allowed him to exist by working for the boss. That's’ been the workers situation ever since.

Ellen Meiskins Wood s describes the process in her book “The Origins of Capitalism”

“It is a system in which the bulk of society’s work is done by propertyless labourers who are obliged to sell their labour power in exchange for a wage in order to gain access to the means of life. In the process of supplying the needs and wants of society, workers at the same time create profits for those who buy their labour power.

In fact the production of goods and services are subordinate to the production of capital and capitalist profit. The basic objective of the capitalist system, in other words, is the production and self-expansion of capital.”

So where does the boss make his money out of the workers? Simply by paying them enough to live on but taking everything the workers produce over and above the value of their wages – this surplus pays for raw materials, other business expenses and the profit the boss expects. This surplus often is partly invested to create a bigger business and make even more profit for the boss.

Over the years we have seen how this process has accumulated capital and economic power in the hands of bosses and shareholders, some of then owning large parts of an economy.

But there is a fatal flaw in the system. If you pay the worker less than he or she produces there comes a time when the workers wages cannot buy what has been produced. They just can’t buy them, despite mortgages; time payment or credit cards that try to bridge the gap between wages paid and the final cost of goods. This is a basic explanation but it covers the facts. Capitalism is an exploiting system and from time to time this makes it crash.

Next week I shall talk about the stock exchange under modern capitalism. Meantime just remember – this is not the only way people cam organise their lives.

MEETINGS ON FARE RISES Peter Glensor chairman of the Regional Council Transport committee held meetings in Wellington and Kapiti this week to talk with the community about future bus and train fare policies..

Unfortunately people who attended told us they didn’t feel there was any real to and fro discussion. The bureaucrats of the council came with their list of topics to discuss, people there could comment but there was little opportunity to absorb issues and it appeared little notice taken of what people said. It’s OK to talk to the public but it has to be done more extensively and with more preparation than a few issues listed at a meeting. Only a full system of participatory democracy can give people a real opportunity to understand and discuss issues with councils.

THIS HOLIDAY WEEKEND Finally Labour Day –why does it exist? According to Morning Report last Thursday it is time to watch sport or plant your tomatoes. But the website History on Line tells us differently --it says--

“Labour Day commemorates the struggle for an eight-hour working day. New Zealand workers were among the first in the world to claim this right when, in 1840, the carpenter Samuel Parnell won an eight-hour day in Wellington. Labour Day was first celebrated in New Zealand on 28 October 1890, when several thousand trade union members and supporters attended parades in the main centres.”

The celebration has obviously declined with the decline of New Zealand trade unions but we should know it’s not just about sport or planting tomatoes.

DIG OFF AIR IS PRODUCED BY JIM DELAHUNTY PHONE 9386943 WELLINGTON FROM ITEMS IN “BEHIND THE NEWS” PLAYING ON WELLINGTON ACCESS RADIO[783AM] EACH SUNDAY AT 4PM AS PART OF THE WEA PROGRAMME “EDUCATING FOR SOCIAL CHANGE.”