The bailout has failed – time to nationalise the banks

Word is that the Treasury is thinking of bailing out the banks again.

The Prime Minister denies its a priority, preferring to talk about how he’s going to create jobs to curb rising unemployment.

But it’s clear that the stated aim of the bailout – to increase lending to businesses and to new start-ups and small businesses in particular – has failed.

And without strong action, the recession will deepen – schemes to curb unemployment will have no effect unless they are matched by efforts to stop jobs being lost in the first place.

The only solution to the credit crisis is spelled out in the latest edition of Red Pepper:

Rebuilding banking

Leo Panitch argues that what is needed is for the banks to become a public utility

First, let’s be clear about capitalism – and with it the character of the state under capitalism. There is a conventional assumption, a leftover of the cold war perhaps, that somehow capitalism is essentially about the market and socialism is essentially about the state. In fact, a central historical feature of the state in capitalist societies is the role it plays as guarantor of private property and, most importantly for the smooth running of the financial markets, that it will always honour its bonds – that is, its borrowing from the private banks.

Because of this guarantee – the promise to pay others back from taxation revenue in the future – government bonds, whether issued to finance war or to finance welfare, constitute the least risky form of lending. As such, it forms the foundation of financial markets’ role in sustaining the ability of capitalists generally to accumulate – to continue to invest and make profits. This centrality of the state for capitalist accumulation is most notable with respect to those dominant states, like the USA, whose bonds are the foundation on which all calculations of value in global capitalism are based; states that host and support the main centres of international financial markets, such as New York and the City of London.

Understanding the role of the state in a capitalist society helps us to see why, when a government bails them out with public money, the bankers do not see this as the start of socialism. On the contrary, they see it as the government fulfilling its duty to the financial markets – whose smooth running it both depends on and sustains, by providing the basis of confidence in the credibility of the banking system.

So it is misleading to see government involvement in the banks – whether it be the pure bailout of the original Paulson program in the US, or the subsequent non-controlling equities taken by the US, British and other governments – as per se a move away even from neoliberalism. (It is also misleading to see neoliberalism as being about the withdrawal of the state from the markets – and therefore this current involvement of the state as a defeat of neoliberalism. The state under neoliberalism has been very active in promoting the vast expansion of financial markets and facilitating their volatile growth; and, as this volatility inevitably led to repeated financial crises, in keeping the financial system going from moments of chaos to moments of chaos.)

Does this mean that this present crisis of the financial markets is not an opportunity to debate and press for alternatives? And where do we start?

It is an opportunity because in this crisis it is clear that what has been misleadingly billed as the ‘free market’ has failed and is seen to have failed, and also because it is clear that states have been responsible for promoting what has now failed, and that they now need to come to the rescue of the banks. This concentrates the minds of most people on the problem: their pay cheques are deposited with banks, their pension savings are invested in the stock market, their consumption is reliant on bank credit, and is the roof over the heads, as heavily-mortgaged home owners.

It is notable in this respect that going back over the last century, alongside the various movements that arose to struggle for the vote for working people, there has always been pressure to control the financial system, and even to bring the banks under public ownership, reflecting a certain common sense that the financial system ought to be accountable to or even belong to the people – that money should be become a public resource and banks a public utility. Indeed, this democratic pressure system was not without results: some of the regulations that states did put on the banking system after previous crises were also a response to demands from below that people should not be fleeced by the bankers.

For example, the nationalisation of the Bank of England was meant to bring the government’s agent in the financial markets under democratic control – although in fact the Bank of England now acted inside the state as the voice of the City within the state, representing the power of financial capital.

The lessons began to be learnt in the wake of the rise of the new left and the crisis of the Keynesian welfare state in the 1970s. It was recognised that the only way to overcome the contradictions of the Keynesian welfare state in a positive manner was to take the financial system into public control. (The best popularly written example of this, and still worth reading today, is Richard Minns, Take Over the City: the case for public ownership of financial institutions, Pluto 1982.) The left in the British Labour Party was able to secure the passage of a conference resolution to nationalise the big banks and insurance companies in the City of London, albeit with no effect on a Labour government that embraced one of the IMF’s first structural adjustment programmes. We are still paying for the defeat of these ideas (and the industrial strategies referred to by Stuart Holland on page 22). It is now necessary to build on their proposals and make them relevant at the current juncture.

The scale of the crisis today provides an opening for the renewal of radical politics that advances a systemic alternative to capitalism. It would be a tragedy if a more ambitious goal than making financial capital more prudent was not on the agenda.

It is hard to see how anyone can be serious about converting our economy to green priorities without understanding that we need a democratic means of planning through new sets of public institutions that would enable us to take collective decisions about allocating resources for what we produce and how and where we produce the things we need to sustain our lives and our relationship to our environment. The reasons why trading in carbon offsets as a solution to the climate crisis is a dead end are shown in this financial crisis. It would involve depending on the kinds of derivatives markets that are so volatile and are so inherently open to financial manipulation and to financial crashes. (The recently published Green New Deal begins to address these questions.)

In terms of immediate reforms – in a situation where the only safe debt is public debt – we should start with demands for vast programmes to provide for collective services and infrastructures that not only compensate for those that have atrophied but meet new definitions of basic human needs and come to terms with today’s ecological challenges.

Such reforms would soon come up against the limits posed by the reproduction of capitalism. This is why it is so important to raise not merely the regulation of finance but the transformation and democratisation of the whole financial system. What is in fact needed is to turn the whole banking system into a public utility so that the distribution of credit and capital would be undertaken in conformity with democratically established priorities rather than short term profit. This would have to involve not only capital controls in relation to international finance but also controls over domestic investment, since the point of taking control over finance is to transform the uses to which it is now put. And it would also require much more than this in terms of the democratisation of both the broader economy and the state.

Of course, without new movements and parties that can rebuild popular class forces this will fall on empty ground. Crucial to this rebuilding is to get people to think ambitiously again. However deep the crisis, however confused and demoralised the financial elite inside and outside the state, and however widespread the popular outrage against them, this will require hard and committed work by a great many activists. We will need to put our minds to the hard questions of what the new institutions of democratic public finance would look like – and what kinds of movements would be needed to build them.

Leo Panitch’s book Renewing Socialism is published by Merlin Press. A further article on ‘The Current Crisis and Socialist Politics’ by Leo Panitch and Sam Gindin can be read online at

America’s Republic workers occupy for their rights – and win

Inspiration from across the seas:

Republic workers reach victorious settlement!
Thursday, December 11, 2008
By: John Beacham

Union plant occupation shows workers can bail themselves out through struggle

After occupying their work place for six days, over 260 workers at Republic Windows and Doors have won a major victory in Chicago. Bank of America and JP Morgan Chase, the two most powerful banks in the country, will pay the workers the $1.75 million in wages and accrued vacation pay they are owed.

The settlement will also cover employee health care coverage for two months. The United Electrical Workers, the union representing the workers, has also announced the creation of a supporters fund to re-open the plant.

The two banks, which have been given a combined $50 billion in government bailouts and were also the principal investors in Republic, had refused to give the company money to pay the workers.

The plant sit-in began on Dec. 5 when Republic illegally closed the factory with only three days notice. Companies are bound by the federal WARN Act to either give a 60-day notice or 60 days’ pay before a plant closing or layoff of 50 or more workers.

The sit-in action drew widespread national and international attention. It became an inspiration for millions of workers who are facing increasingly tough economic times. From the beginning, the workers announced that they were taking action not only for themselves but for all workers. After the settlement, UE Director of Organization Bob Kingsley said that the outcome of the occupation was “a victory for workers everywhere.”

The workers at the plant are mostly Latino and African American workers. The average pay is $400 to $600 a week. The workers organized Republic four years ago and have a history of militant action. In June, the union won a raise of $1.60 an hour and defeated multiple proposed take-backs by marching on the owner’s office.

The decision to organize the sit-in was made by the workers on the shop floor. When the plant closed on Friday, they informed the owners that they were taking over the plant and not leaving until they were paid their wages.

Republic has secretly moved much of its machines to Iowa to a non-union shop, Echo Windows. The company was formed by the wife of Republic owner Richard Gillman in November. For weeks before the plant closure, Republic purportedly negotiated with Bank of America for loans to pay workers but the bank repeatedly refused.

The shady move to Iowa grossly violates the union contract, which had provisions to negotiate any outsourcing and to compensate employees in the event of a plant relocation.

At the plant, enthusiastic rallies were held every day despite severe winter conditions. Solidarity actions, including acts of civil disobedience, were held in dozens of cities including San Francisco, New York, Miami, Boston and Detroit. On Dec. 10, a rally of over 1,000 was held outside of the Chicago headquarters of Bank of America as negotiations between the union and the banks were taking place.

Hundreds of community members, members from other unions, and social justice activists—including the Party for Socialism and Liberation—donated food and supplies to the workers over the week. People sent items from as far away as Alaska.

Fighting back leads to important victory

Recession or not, the big banks and powerful corporations are sitting on billions of dollars. Some of it has been the result of recent government loans and bailout money. Much of it is based on their appropriation of vast sums of society’s wealth—wealth that is the result of the combined labor of tens of millions of workers.

The fact that the Republic workers are still being laid off by the company’s move to Iowa is emblematic of the private property relations under capitalism. The corporation right to move plants and operations to make a higher profit trumps the workers’ right to a job to provide for the needs of their families. This is a major reason behind the massive driving down of wages and high unemployment.

But the Republic workers nonetheless have provided a heroic example of what a united worker’s struggle can accomplish to defend their rights and wrest concessions from the bosses.

The Republic workers have made known the power of the working class in society. They have shown that workers can face off with the bosses and win—even at the beginning of a deepening capitalist crisis when major corporations are collapsing, plants are closing, and millions of workers are being laid off and kicked out of their homes.

The kind of struggle the Republic workers waged is a real-life lesson for all workers and should be replicated in different forms throughout the country. The ruling class will search out every avenue they can to make the workers pay for the deepening, countrywide economic slowdown. As production grinds to a halt as a result of the boom and bust capitalist system, they will seek to cut costs by shuttering factories, closing stores and laying off workers.

Idle workers and plants, however, need not stay that way. The profit motive of the corporations is not the only possible engine for the economy. Indeed, it is not the best engine available. There is another option—workers are more than capable of organizing production.

Millions of workers need jobs; millions of workers need products like housing, food, health care, transportation and education; millions of homes are empty every night; millions of people are being kicked out of their homes. But no matter how bad things are, the capitalists will not put people to work and in homes unless they can make a profit—or they are compelled to do so by the organization of workers.

Hardship and suffering can be avoided. Workers can fight and make the banks pay for the crisis their system created. Workers can take over their factories and get justice.

There is every reason that workers should take matters into their own hands. It is our hands, energy, labor, minds and sweat that are the source of all wealth.

Congratulations to the Republic Workers!
A Victory for One is a Victory for All!
Stop the Layoffs and Plant Closures!
Jobs, Economic Relief and Full Citizenship for All Workers Now!

Dutch courage? Anti-capitalism and mass migration

Blogging comrade Neil Clark has an interesting article in The First Post on the success of the Socialist Party of the Netherlands, which opposes mass migration on anti-capitalist grounds:

Anyone who argues that, as a political force, socialism is dead, ought to visit the Netherlands. The Socialist Party of the Netherlands (SP) is the fastest growing political group in the country.

They won 25 seats in the last general election – an increase of 16 seats – and made huge gains in last year’s local elections. They are now the third largest party in Holland in terms of members and could well replace the Dutch Labour Party as the main alternative to the Christian Democrats.

Why are they so successful? I would suggest that it is because they are a socialist party that actually has socialist policies. They oppose the privatisation of public services, advocate higher taxes on the very wealthy and have condemned the “the culture of greed” caused by “a capitalism based on inflated bonuses and easy money”. They oppose war and Nato and the nascent European superstate. They were the only left-wing Dutch party in Parliament to oppose the new EU Constitution in the 2005 referendum.

Of course the fact that they have one of the most charismatic – and photogenic – of all of European political leaders in the 41-year-old epidemiologist Agnes Kant (pictured above) does them no harm.

Part of its popularity with the voters lies in one particular policy which differentiates it from British or other European parties of the left: they oppose large scale immigration. The SP see the ‘free movement of labour’ as part of the neoliberal globalist package – something which benefits big business but not ordinary people. Their opposition to immigration is not based on racism – as tends to be the case with the BNP and other far-right parties in Europe – but on their socialist ideology.

A recent publication by the SP asserted that labour migration in the EU was making “more acute the contrasts between rich and poor and competition between different groups of workers within the EU”. Instead of lauding the free movement of labour as other parties on the left do, the SP calls for policies “to make migration unnecessary” and for the EU funds to be used to enable poorer regions of the continent to be self-supporting.

The SP’s opposition to large-scale immigration is not a recent development. In the 1980s, the party’s booklet Gastarbeid en Kapitaal (Migrant Labour and Capital), denounced the migration of foreign workers into the Netherlands as a capitalist ploy to drive down wages and destroy working class solidarity.

This is a far cry from the traditional position of the British left – which despite overwhelming evidence that large-scale immigration does reduce wages – still clings to an the ideology of open borders. In doing so, they are not only complying with the wishes of big business, who for obvious reasons welcome the influx of large numbers of people from low-wage economies onto their labour market; they are also espousing a policy which is unpopular with large swathes of the electorate and which is likely to become even more unpopular as unemployment grows.

The success of the Socialist Party of the Netherlands shows that there are lots of votes to be won by an unequivocally left-wing party which has the courage and sense to oppose large-scale immigration on non-racist, anti-capitalist grounds.

Slump of all fears

The great inter-war slumps were not acts of God or of blind forces. They were the sure and certain result of the concentration of too much economic power in the hands of too few men (who) felt no responsibility to the nation. 

– from the 1945 Labour manifesto Let Us Face The Future

This week’s Socialist Worker answers some key questions on the crisis:

Can public spending solve the crisis?
Many economists and politicians – Gordon Brown included – are calling for major public spending projects to stave off the worst effects of the recession. This is sometimes dubbed a “Keynesian” solution.

Left wing economists are demanding public funds be spent on infrastructure projects such as schools, hospitals and public transport, or on measures to tackle climate change with an aim to improve society and create jobs.

But Brown’s vision of Keynesianism is very different to this. He is proposing to spend billions on replacing the Trident nuclear system, aircraft carriers, the Olympics and other such projects.

Socialists should welcome Keynesian policies only if they take power away from the rich and put it into the hands of the working class.

But ultimately we need to go further and replace capitalism with a system that operates in the interests of the majority.

There is also the question of who pays for this public spending – and for the bank bailouts.

The government doesn’t have the money, so it has to borrow it from the international capital markets.

This will lead to a budget deficit, which the government will look to solve by raising taxes or making public spending cuts, or doing both at the same time.

The borrowing also has knock-on effects in the global economy.

If governments are hoovering up all the available funds, it becomes more expensive for private companies to borrow money.

This could lead to more companies going bankrupt and more job losses, thereby deepening the recession.

Why is the ruling class divided over the solutions to the crisis?
Even limited talk of a “public works programme” has provoked a backlash from the neoliberal right.

Sixteen economists wrote a letter to the Sunday Telegraph last week attacking the government’s plans.

“Economic slowdowns are natural and necessary features of a market economy,” they wrote, warning that state spending would “stunt the private sector’s recovery once recession is past”.

They called for more tax cuts instead.

Their arguments reflect the wider ideological crisis in the ruling class, as their system comes crashing down around them.

Some worry that direct state intervention into the market could lead to ordinary people believing they could exert collective control over the economy.

Can cutting interest rates help?
Some left wing economists have proposed slashing interest rates as an emergency measure to stop the slide into recession.

They argue that a drastic cut in the interest rate will alleviate the worst effects of the recession on ordinary people.

It would lead to lower mortgage payments, they say, helping homeowners facing repossession.

And it would lower borrowing costs for businesses, preventing mass job losses as firms go under.

Cutting interest rates could well lead to these beneficial outcomes. But there is no guarantee that banks would pass on any rate cut to mortgage holders, or to the firms that owe them money.

Similarly, there is no guarantee that employers would not take advantage of cheaper borrowing costs and sack people anyway.

The US government has been cutting interest rates for a while now, but unemployment is still rising.

Japan pursued a policy of low interest rates in an attempt to get its economy out of stagnation.

But this had little effect – there was no investment as firms’ profits failed to recover.

Even advocates of emergency interest rate cuts admit that it would do nothing to solve the long term problem of the debt bubble in global financial markets.

The bursting of this bubble triggered the banking crisis.

Its existence is tied to a much more fundamental issue – the crisis of profitability across the capitalist system.

Profit rates in productive areas of the economy are low and declining, which is why investors turned to the financial sector in the first place.

Why are stock markets plunging again?
The stock markets were relatively calm immediately after the announcement of coordinated bank bailouts across the world. But last week they started plunging again.

The trigger for this latest rout was the dawning realisation that a global recession was inevitable.

It was accompanied by steep falls in the value of pounds and euros relative to the US dollar.

Britain is likely to be particularly badly hit by this recession.

Economic growth in this country has been centred on financial services, with the encouragement of New Labour.

But finance is at the centre of the current economic hurricane.

Some commentators have argued that the economies of the Far East, particularly China, can act as powerhouses that will pull capitalism out of its present crisis.

But now it looks as if the crisis will drag China and other Asian economies down too. Much of their growth has come from exporting goods to the West – so a slowdown in the West will hit their economies too.

Workers’ control is the answer to economic woes

This week’s Socialist Worker provides a good introduction to democracy in the workplace:

What is workers control?
Following the recent state take-over of financial giants, Ian Birchall reveals the limits of nationalisation, and why socialists stand for a different vision – that of workers’ control

Can you do your job better than your boss could do it? Ask yourself this question. Ask your friends and workmates. Nine out of ten people will answer with a resounding and contemptuous “yes”.

Yet this question leads to the very heart of what we mean by socialism. Our society divides us into two basic classes. On the one hand there are those who make the things and provide the services we all need. On the other there are those who decide what shall be produced and provided in order to make the greatest profits.

All too often the supporters of socialism, as well as its enemies, identify socialism with state ownership. But as we’ve just seen in the US, even George Bush can resort to a form of nationalisation, taking over two giant mortgage corporations – Fannie Mae and Freddie Mac.

The Daily Telegraph thinks this is “a socialist response to market failure”. Outside the bizarre thought-world of the Telegraph nobody imagines that Bush is a socialist.

Socialists support nationalisation if it’s used to protect jobs. We oppose privatisation of public services because it means less public accountability.

But nationalisation is no cure-all. In 1947 miners welcomed nationalisation of the pits. Within a year Yorkshire miners were striking in opposition to their new bosses – and their union officials.

That is why workers’ control has always been vital to the real socialist tradition. As the British socialist GDH Cole put it, “Socialism cannot be soundly built except on a foundation of trust in the capacity of ordinary people to manage their own affairs.”


Before the First World War syndicalist ideas were widespread in the working class movement. The syndicalists were opposed to state ownership – they believed the trade unions, as workers’ organisations, should take over and manage industry.

The French unions had the slogan, “The workshop will replace the government.”

In Britain syndicalism had great influence among engineers, miners and railway workers.

That is why, when the Labour Party adopted Clause Four of its constitution in 1918 it called not only for “the common ownership of the means of production, distribution and exchange” but “the best obtainable system of popular administration and control of each industry or service”.

Labour never took any notice of this. The 1945 Labour government carried out several nationalisations, but Labour minister Stafford Cripps contemptuously declared, “I think it would be almost impossible to have worker-controlled industry in Britain, even if it were on the whole desirable.”

Just to make sure, Tony Blair abolished Clause Four in favour of some meaningless verbiage about a “spirit of solidarity, tolerance and respect”.

In Russia after the 1917 revolution people responded at a higher level.

One of the first decrees issued by the Bolsheviks on taking power stated that “workers’ control over the manufacture, purchase, sale and storage of produce and raw materials and over the financial activity of enterprises is introduced in all industrial, commercial, banking, agricultural, cooperative and other enterprises”.

The real movement came from below. In many cases factory owners were driven out or fled. Workers had no option but to take over the workplaces and run them for themselves. John Reed, a US socialist in Russia in the early days of the revolution, describes this process:

“There was a committee meeting at one of the factories, where a workman arose and said, ‘Comrades, why do we worry? The question of technical experts is not a difficult one. Remember, the boss wasn’t a technical expert, the boss didn’t know engineering or chemistry or bookkeeping. All he did was to own. When he wanted technical help, he hired men to do it for him. Well, now we are the boss. Let’s hire engineers, bookkeepers and so forth – to work for us’.”


In the difficult circumstances of economic collapse and the invasion of foreign armies, these embryos of workers’ control did not survive long.

Sometimes workers’ control meant particular groups of workers putting their own interests before those of the class as a whole. To counter this the Bolsheviks had to take tough decisions. But those early attempts at workers’ control remain an inspiration to us today.

Over the last 90 years workers’ control has reappeared again and again. In Spain 1936, in France 1968, in Chile 1973, in Poland 1980 and most recently in Argentina, workers have taken control of their own workplaces and shown that the old owners and managers were quite unnecessary.

During the Hungarian rising in 1956 workers set up councils to manage production. These controlled basic wage levels, hiring and firing, and appointed the director.

Some former managers went back to work on the factory floor. At the radio station the workers’ council brought together actors, producers, reporters, technicians, garage hands and cleaners, all with equal rights.

In Portugal in 1974 the overthrow of the dictatorship led to workers taking over their workplaces. Tony Cliff, the founder of the Socialist Workers Party, gave examples of some of the struggles that took place there:

“In Charminha, a small garment factory outside Lisbon, [bosses] tried to pay salaries with bounced cheques. The Austrian manager fled the country, and the workers, mainly women, set up a cooperative to sell their work to the people.

“In Eurofil, which makes plastics, fibres, rope and sacking, etc, and was run on 40 percent casual labour, the management tried to make the company go bankrupt. The workers occupied the factory and continued production. They have kept out the bosses and are demanding nationalisation without compensation under workers’ control.”

In Iran in 1979, when the Shah’s dictatorship was overthrown, workers established “shoras” – councils – to run the factories. The writer Maryam Poya described how they functioned:

“The shoras began to exercise their power at every level of factory life, in purchasing, sales, pricing and orders for raw materials. Different committees were organised to carry out various tasks. Guild committees to secure trade union demands with respect to wages, conditions, insurance, health and safety.

“Financial committees to control the incomes and expenditures of the individual factories and to watch over managerial financial affairs. Communications committees to maintain contact with shoras in other factories.

“Women’s committees, made up solely of women, to press women workers’ specific demands, especially in the chemicals and textiles industries where women constituted the majority of the labour force.”

Recently there have been warnings of another “Winter of Discontent” in Britain like that in the early months of 1979. What really frightens our rulers and their hangers-on about that period is the way that workers began to grasp control of industry.

A strike by lorry drivers in January 1979 led to the closure of petrol stations and threatened essential supplies.

The T&G union agreed to permit “emergency” supplies to be exempted. But the definition of an emergency was left up to local union officials, and shop stewards in different areas set up “dispensation committees” to make decisions.

In the same month there were strikes across the NHS. Again the definition of emergency became a vital question.

At the end of January a government minister announced that nearly half of NHS hospitals were only treating emergencies, that virtually no ambulance service was operating normally, and, worst of all, that ancillary health service workers were deciding which cases merited treatment.


This was far worse for the government than just a strike for higher pay. It was a challenge to the whole hierarchy of the medical profession. Health service workers, who routinely saved human lives, had the impudence to claim that they were better qualified to define emergencies than politicians.

But under capitalism workers’ control can only go so far. There cannot be socialism in a single country and certainly no socialism in a single workplace. Even if workers take over their factory, they will eventually end up competing on the market and thus organising their own exploitation.

True workers’ control can only exist in the framework of a democratically decided general plan which sets overall targets and priorities.

Print workers alone can’t decide what we should read, or bus workers alone at what hours the buses will run. Sectional interests have to be balanced against the needs of society as a whole.

But workers’ control remains the key issue distinguishing what US socialist Hal Draper called “socialism from below” from “socialism from above”.

In some circumstances a reforming parliament can carry out nationalisations, or bring in real reforms that benefit workers, such as the NHS. But workers’ control can never be given – it must be taken by workers acting on their own behalf.

Till then every small victory in the workplace can represent what Tony Cliff called “creeping workers’ control”.

Every time we challenge management’s right to hire and fire by defending a victimised workmate, every time we prevent a deterioration of our working conditions in the name of “flexibility”, we strike a blow for workers’ control.

In doing so we increase our own self-confidence to challenge our rulers. As the world slides into recession, war and looming environmental disaster, we have to say to them – you can’t run the world, but we can.

English football – is the future co-operative?

Andy Burnham, minister for Culture, Media, and Sport in the British government, gave a speech to the Co-operative Party (which is affiliated to Labour) on the question of ownership of English football clubs.

I’ve always thought Burnham to be a New Labour clone, but credit where it’s due, he’s always held these views – though the timing of is dubious (party leadership bid? am I too cynical?). Good to see some debate on English sport, but how about politics – something on an English parliament?

The Politics for People blog reports on Burnham’s appearance at the Co-op Party conference:

Andy questioned whether the big money in football is having a positive effect and called for more fan ownership in football as well as rugby league and other sports.

Football grew out of community and workplace organisations, he reminded us, and that spirit needs to be retained and rebuilt. Of the rich owners now taking over the Premiership, Andy said, “We should not delude ourselves that the reason England is attracting so much interest is solely because of the quality of football. It is also because other countries, such as Germany and Spain, have football clubs which are mutually owned by their supporters, democratic and not for sale. I believe English football is at a crossroads and if it follows the same path in the next 10 years, there is a risk that it will lose touch with its core support.”

Recent protests by fans over the departure of manager Kevin Keegan from Newcastle United have led the club’s billionaire owner to announce he’s selling up.

Mike Ashley, whose empire includes JJB Sports (see here for the poor record on workers’ rights) is apparently going to offer fans the chance to buy out the club. The News of the World quotes a friend of Ashley:

“They say there are 400,000 Newcastle fans in the area. If they all put in £1,000 they can buy the club and run it themselves.

“They can have a website and vote for the manager. They can pick the team and choose the players they buy and sell. They can do it all.”

This is similar to an idea of fans who want to Share Liverpool FC, who have already been given some ministerial backing…

Secretary of State for Culture, Media & Sport, Andy Burnham, endorsed the prospect of fans taking ownership of their clubs at a meeting to launch the next phase of ShareLiverpoolFC’s bid to takeover Liverpool FC.

The meeting took place before the second leg of Liverpool’s Champions League qualifier on Wednesday 27 August, at the Liverpool Lighthouse in Anfield with a high profile list of speakers, and was covered by local, national and international press, radio and TV.

Lifelong Everton fan and MP for Leigh, Mr Burnham put aside his personal allegiance to back a principle that he championed in his former role as Chairman of Supporters Direct.

Mr Burnham said: “I think it would be good for any football club. I think the principle is a good one, that the people who have built up these clubs over the generations and have invested millions of their money should control their future.”

The minister spoke passionately about how clubs belonged to their communities, and that the prospect of the Premiership becoming simply a financial league table of the world’s richest billionaires would render football a pointless and ultimately soulless exercise.

The minister gave encouragement to the audience, saying that over 140 Supporters Trusts had been set up since Supporters Direct was launched in 2000, and that 14 clubs, including Notts County, the oldest club in the league, were now run by their fans. “If we all believe, then this is achievable” he concluded.

Now it’s worth noting the money involved – a thousand quid being offered to each Newcastle fan for a share, five thousand for each Liverpool fan. This makes participation exclusive to those who are able to invest that kind of money at a time when money’s tight with rising food, fuel, and mortgages/rents.

So we could be looking at a kind of footie fan capitalism – but with the idealism perhaps trumping the profit motive.

But if anything comes of it, I am sure it will be an inspiration to working people that big clubs can be controlled by their supporters. And if big clubs, why not the biggest monopolies?

David Lindsay has a better idea for the Magpies:

With Newcastle United on the market, the owner of its sponsor, Northern Rock, should step in any buy it. In other words, nationalise it. And by no means only Newcastle United.

The nationalisation, leading to mutualisation and municipalisation as above, of these important focal points of local patriotism is incomparably preferable to their purchase by sovereign wealth funds, which are in fact foreign states. And it would set a very high-profile example, both of the new patterns of ownership and control in the post-capitalist world, and of the accompanying new regime of pay restraint at the very top.

A quick word on the Co-operative Party’s role – it is a sister party to Labour and also an affiliate to the bigger party. Recent motions to the Cooperative conference signal a shift away from New Labour.

I’ve no idea which of these motions passed and which didn’t, but here they are:

The attack on the Government’s foreign policy is led the Co-operative Group’s North London Party. A motion tabled by the party demands the removal of nuclear weapons from Britain; withdrawal from Iraq and Afghanistan; no war against Iran; an early solution to the Israel-Palestine conflict and an enhanced role for the United Nations as the world’s peace-keepers.

The motion says US and British aggression has destabilised Iraq and claims that both countries are part of the problem and therefore cannot be part of the solution. On Afghanistan, the motion calls on conference to demand that UK troops be confined to barracks and withdrawn as quickly as possible.

In a separate motion on energy, Midlands Society Leicestershire Party urges conference to encourage more investment in renewable energy sources as opposed to the nuclear option, while an amendment tabled by the Co-op Group’s North West & North Wales Party urges the Co-operative Parliamentary Group to oppose the building of nuclear power stations.

A pithy 12-word motion from the Co-op Group Bristol Party calls for an end to the monarchy in its current form by asking conference to endorse the view that the next head of state should be elected (as opposed to the current hereditary principle which automatically hands the role to a member of the royal family).

An amendment to one of the motions on education tabled by Hertfordshire & Home Counties Co-op Party asks conference to press for the removal of the requirement for a daily act of worship in state schools and says the Government should consider phasing out faith schools.

Midlands Society Leicestershire Party has called on the Party’s NEC to conduct an inquiry into the NHS Foundation Trusts to establish how effectively co-operative values and principles are applied while a composite motion on the Northern Rock saga supported by four Party branches calls for the troubled Bank to be converted into an Industrial Provident Society once the organisation’s current position has stabilised.

XL collapse exposes chaos of capitalism

Saturday’s Morning Star has a very informative editorial which details how and why the tour operator and airline XL went bust:

Madness of the market

ONCE again, capitalism has shown its cuddly, people-friendly face with the collapse of holiday giant XL Leisure Group.

Around 85,000 people stranded abroad, several hundred thousand advance bookings dishonoured, staff finding out that they didn’t have a job in mid-flight, over 1,700 jobs potentially vanishing and the Unite union not even being informed by the company that it was in trouble with its refinancing arrangements after a major bank pulled out on August 14.

And yet, in the full knowledge that it was, indeed, in trouble and desperately trying to arrange a bail-out, the companies in the group continued to take people’s cash and make bookings that there was precious little chance that they could honour.

Not that this implies any dishonesty or deliberately dodgy dealing by the companies. Far from it – at least in the terms of the market economy.

The logic of capitalism meant that they had to continue trying to trade their way out of trouble and that same market-oriented logic said that they could not allow any hint of trouble to become public knowledge because people would obviously then cease to book with the companies, thereby sealing their fate.

Indeed, as late as August 31, a company spokesman was saying that “the XL Leisure Group is experiencing strong trading, with bookings for 2009 already outperforming last year.”

But, as for the long-suffering passengers, they inevitably get the sticky end of the deal and, the less well off that they are, the stickier it becomes.

Granted, customers well off enough to book full package deals through travel agencies are covered by the CAA air travel organisers’ licensing scheme and will be offered repatriation flights or their money back if they have an advance booking.

And, if they booked by credit card, their card insurance should cover them.

But people not having credit cards to book with, or booking a flight only, because they could not afford the full package, will face an extra fee to get home.

And it’s not only the passengers. The staff have an even worse situation to deal with.

No jobs and an industry that is contracting by the day, with airlines such as Alitalia and Zoom either collapsing or in terminal decline and a resulting glut of unemployed staff on the jobs market.

So, who is to blame for this situation?

In 2004, the Times reported that a major British bank “is poised to become the largest oil trader in the City of London as banks rush to profit from the soaring oil price and booming oil speculation market.”

In 2008, that same bank pulled the rug out from under XL because of financing associated with fuel. In other words, a major oil speculator shuts XL because the company can’t pay the price for fuel that the speculators have driven up.

And the bank’s partner in financing XL – a major Icelandic bank – acquired the still-profitable French and German XL subsidiaries on Friday morning after the rug-pulling exercise, in what can only be described as a perfect example of asset-stripping, although it would probably claim that it was saving what could be rescued from the stricken company.

But the fact remains that, if the company was stricken, it was the banks that did the striking.

Talk about having your cake and eating it.

It is difficult to imagine a better example of the amoral chaos of market capitalism or, for that matter, a better reason for social ownership of banks and big businesses generally.