In proposing a way forward for Australian capitalism, and to divert attention from the Labor government’s successes in imposing historic real wage cuts on workers, Prime Minister Anthony Albanese has opened a shabby revival of Shakespeare’s Romeo and Juliet. Only the names have been changed to protect the guilty. Instead of the feud between Capulets and Montagues, in this version the rival gangs are protectionists and free traders.
Protectionists argue that governments need to help local capitalist production through direct financial assistance or by imposing tariffs—taxes on imported goods that compete with local output. Free traders say that the magic of markets, undistorted by government actions, will produce the best outcomes for the local population.
On 11 April, Albanese, in practice, <a href="https://www.pm.gov.au/media/future-made-australia">declared</a> himself a devout protectionist. A “Future Made in Australia Act” will package together a bunch of existing and new initiatives. Fundamentally, it’s about showering chosen businesses with cash.
The <a href="https://www.nrf.gov.au">National Reconstruction Fund Corporation</a> is central to these protectionist plans. Established last year, the corporation will invest $15 billion over six years. Not to create publicly owned operations, but to buy shares in and give cheap loans to private manufacturing businesses. 
The aim is to create niche industries in Australia that will eventually be internationally competitive, by doling out money to chosen companies that process Australian-produced raw materials, make renewable energy equipment, weapons or develop innovative technologies. The corporation’s board will try to pick winners: projects that have the best prospects of making big profits for their owners. 
If only the “party of labour” showed such enthusiasm for sustaining workers’ wages.
Since the 1800s, bosses and their media and economist hangers on have debated strategies for Australian capitalism. Albanese unconvincingly claimed that his big give-aways to companies are “not old-fashioned protectionism”. But they’re precisely that. And his critics are advocates of old-fashioned free trade.
But Albanese was right to say that “strategic competition is a fact of life”. Under capitalism, governments have always taken action to defend and promote local capital accumulation in the face of competition from other countries. That has involved military activity, as well as the provision or regulation of transport, electricity, water and sewerage infrastructure, and trying to ensure that there is a suitably compliant and competent workforce available for bosses to employ (exploit).
Many governments have responded with new protectionist policies to the disruption of supply chains during the pandemic and the Russian invasion of Ukraine, and because of fears that further military conflicts will undermine access to imported goods. 
But the biggest driver of the protectionist shift has been the increasing rivalry between the United States and China. Presidents Donald Trump and Joe Biden have countered the economic and military rise of China, where government plays a particularly large role in directing investment, by restricting imports from the imperialist rival of the US capitalist class and subsidising domestic production.
Other countries, such as Australia, are doing the same.
The government’s recent protectionist policies have attracted criticism from the opposition <a href="https://sussanley.com/mia-bill-from-a-missing-in-action-government/">Liberal Party</a>, the <a href="https://www.afr.com/policy/economy/future-made-in-australia-a-regression-to-the-past-20240409-p5fidz">Australian Financial Review</a> and the <a href="https://theconversation.com/view-from-the-hill-danielle-wood-pricks-albaneses-industry-policy-balloon-but-leaves-him-with-good-advice-227786">Productivity Commission</a>, the federal government’s economic think tank. But they have support from the <a href="https://www.aumanufacturing.com.au/a-future-made-in-australia-is-a-matter-of-ideology">manufacturing sector</a> and, unfortunately, <a href="https://www.actu.org.au/policy/national-reconstruction-fund-department-of-industry-science-and-resources-inquiry/">unions</a>.
Protectionists promise that their approach will deliver more jobs, higher living standards, greater security and, these days, better environmental outcomes for the whole population. Free traders say much the same. But both strategies serve the interests of bosses rather than workers.
Higher prices for imports or their locally made competitors, due to tariffs, reduce workers’ living standards. Governments should spend tax revenue on our health, education and welfare rather than to subsidise bosses’ profits, which is the effect of programs like the National Reconstruction Fund. 
Workers’ struggles are the best guarantee for ongoing, well-paid jobs. And such struggles are less likely if we accept the underlying assumption of both these capitalist strategies for economic development—that bosses and workers have common interests.
In 1921, <a href="https://adb.anu.edu.au/biography/considine-michael-patrick-5758">Mick Considine</a>, an Australian Marxist and member of the federal parliament who had been driven out of the Labor Party, accurately pointed out:
“It is over the surplus value that is wrung from the working class in the place where they are exploited that the importers and the manufacturers quarrel, and attempt to use the workers and the political representatives of the workers to aid them in securing their respective share of the plunder for their particular sections.”
He had the same attitude to protectionists and free traders as a dying Mercutio in Romeo and Juliet did to the Capulets and Montagues: “a plague on both your houses”.
For more on economic policy in Australia see Rick’s article “<a href="https://marxistleftreview.org/articles/left-populism-versus-revolutionary-marxism-debating-economic-strategy-in-australia/">Left populism versus revolutionary Marxism</a>”, in Marxist Left Review 24, 2022.

Rick Kuhn

Albanese’s industry policy: tenth time as pathetic farce

The Shortest History of Economics
By Andrew Leigh. Black Inc, 2024; 224 pages; $28.
Reviewed by Rick Kuhn
--------------------
Federal Labor MP Andrew Leigh’s The Shortest History of Economics provides insights into the prejudices and blind spots of the current Labor government vastly more than into the book’s purported subject matter. It is a third-rate economic history of humanity since the stone age, with frequent trivial observations about the value of the economics profession, punctuated by a few feeble attempts at humour.
It would be a waste of time to list the myriad questionable observations, wrong statements and false conclusions in The Shortest History of Economics. It’s more productive to carry out what, in my youth, was called a “symptomatic reading”: identifying relevant information and perspective that aren’t in the book.
But first, where is Leigh coming from and what are his main messages?
A former economics professor, Leigh embraces the “neoclassical synthesis” of some of John Maynard Keynes’s theoretical initiatives concerning “economic aggregates” with the framework of often highly mathematical “marginalist economics” of individuals’ economic activity, developed independently by Stanley Jevons in England, Leon Walras in Switzerland and Carl Menger in Austria, during the early 1870s. 
The Shortest History acknowledges that some of the fundamental marginalist assumptions are wrong and that we don’t always behave as rational “utility-maximising individuals” when making economic decisions. But Leigh never addresses, let alone resolves, the contradiction between this admission and his adherence to the models they underpin.
His core message is TINA: there is no alternative. If we don’t want lower living standards by opting for feudalism, hunter-gatherer societies or state capitalism (which he calls “communism”), there is no alternative to capitalism. Markets and free international trade are a wonder, which, with the technologies they have promoted, “have brought millions out of poverty”.
Still, Leigh states, markets don’t always bring about the best outcomes for people, and capitalism “doesn’t guarantee the wellbeing of those who lack capital”. So he is critical of the market fundamentalists who argue that governments should just set and enforce rules for economic behaviour. Most economists know that governments and public institutions have to engage in economic management to make the system more stable.
Such management, of course, includes not only modifying the rules of the game (governments don’t just “set and forget”) but also economic policies that routinely adjust public spending, taxation, interest rates, regulations for domestic and international economic transactions, along with workers’ conditions, pay and rights.
The concept of “market failure” is an escape hatch that mainstream economists use to justify governments engaging in economic management, though they may disagree about its appropriate extent and content. Labor governments, for example, have (decreasingly) tended to favour more government interventions to rectify market failures than their Liberal rivals.
Leigh is rather coy about the most appropriate policies to deal with, notably, the market failure that gives rise to global heating or inequality. Perhaps this is a necessary precaution: arse-covering in case a definite position is used against him because it contradicts a current or future Labor government policy. But he is up front about preferring to subsidise bosses to employ people over raising the level of the dole. But that’s in line with the ALP’s whole orientation.
So what’s not in the book?
Social class, in terms of people’s role in productive activity. This absence overlaps with another omission: alternative economic frameworks to Leigh’s own mainstream approach (apart from a throw-away mention of Henry George, the nineteenth century writer who highlighted the paradox of “poverty amid plenty”).
Karl Marx? Never heard of him.
The Shortest History of Economics is, like the compulsory theory courses taught in university economics degrees, more or less sophisticated apologetics for capitalism. There’s scope for differences of opinion only within that framework.
Marx resolved contradictions in the labour theories of value developed by his predecessors, including the insightful classical economists Adam Smith and David Ricardo. These theories identify human labour as the basis of the value of commodities.
The explanation of how profits arise was one of Marx’s most important breakthroughs. It also made the labour theory of value in the form perfected by him totally unacceptable to the paid shills for capitalism, like Leigh.
There is a fundamental distinction, Marx pointed out, between labour and labour power. Labour is human activity that can create new value by being applied to elements of the natural world. Bosses and corporations, however, don’t buy labour. The commodity they buy is workers’ capacity to engage in labour: “labour power”.
Once bought, for a day or a week etc., that commodity is useless unless supervisors or managers ensure, on behalf of the owners of productive resources (raw materials, machinery, equipment, buildings—“means of production” in Marxist jargon), that actual work is done. And as much work as possible within the constraints of what capitalists can get away with.
Like other commodities, the value of labour power is the amount of labour that has gone into producing it: the proportion of the value of workers’ upbringing and maintenance embodied in the food, clothing, shelter etc. that they consume. Workers are paid, depending on the success of their struggles over wages, more or less the value of their labour power. 
But labour power is a unique commodity. Unlike other commodities, it doesn’t just pass on the value embodied in it. Labour power creates new (surplus) value, beyond the value embodied in it. Human labour is creative.
Who gets to own that surplus value? Capitalists. This is exploitation, in the Marxist sense. It seems natural and fair. That misleading appearance is what mainstream economists, like Leigh, accept, without delving below the surface to the reality of class relations. Profits are so natural that this History of Economics doesn’t deal with the history of how economists have explained where they come from.
Along with class, class struggle is absent from the book. It does, very briefly, mention unions and how they have improved conditions of work, through arguments “before industrial tribunals” or negotiating with managers—the kinds of union activity that contemporary Labor governments approve of.
But class struggle, which is much less polite, just isn’t there. Neither, on one side, going slow at work, expressing contempt for managers, let alone striking and occupying workplaces. Nor, on the other side, efforts to boost profits—by bosses speeding up production and cutting pay; or by governments restricting workers’ right to organise, taking the axe to public health, education and welfare spending to reduce taxes on the rich, and using armed force to break strikes.
Leigh’s History does include episodes of profound economic crisis: the Great Depression of the 1930s and the Global Financial Crisis of 2007–09. In an admission of the bankruptcy of his profession, he concedes that, “we should be disappointed that modern economies still produce an economic crisis every decade or two”. Still, he has faith: “Putting recessions in the rear-view mirror will mark a major achievement in economics”.
Capitalism has dramatically increased the productivity of human labour, but its crises still bring about catastrophic falls in workers’ living standards. What if, as Marx demonstrated, recurrent crises are intrinsic to capitalism, whatever policies governments implement, because there is a long-term tendency for the rate of profit, the motivator of capitalist production, to fall?
Then it is capitalism that we have put into the rear-view mirror.
Buy Leigh’s book? Don’t waste your money. If you haven’t read them, check out Peter Green’s very clear The Basic Ideas of Marxist Economics, Isaac Rubin’s A History of Economic Thought or Henryk Grossman’s <a href="https://shop.redflag.org.au/products/henryk-grossmans-marx-classical-political-economy-and-the-problem-of-dynamics?_pos=3&amp;_sid=1cee66823&amp;_ss=r">Marx, Classical Political Economy and the Problem of Dynamics</a> instead.

How not to understand economics

There’s a little girl. She’s maybe 8, maybe 10, with huge eyes. In a quiet, little voice, she describes what happened to her in late February in Huwara, a Palestinian town in the West Bank. “We started to hear sounds from outside the house. I moved to the windows in our room but there was shooting so I got onto the floor then they broke the windows”, she tells an <a href="https://www.aljazeera.com/news/2023/2/27/unprecedented-israeli-settlers-wreak-havoc-on-occupied-nablus">Al Jazeera</a> journalist. 
This was a child’s eye view of one of the most disturbing incidents in the decades long offensive against the Palestinians by Israelis and their apartheid state. Huwara was the scene of a raid, by Israeli “settlers”—that is, colonists. Hundreds of these Jewish supremacists, claiming to act in response to violence by Palestinians, marched into the town. They took bats and smashed windows. They took petrol, poured it over cars and houses and lit them. They carried guns and fired them into the air. When they saw local Palestinians, they attacked. The scenes are horrific. Palestinians lying, crouched, foetal on the ground. Sobbing.
This was a pogrom.
The Israeli military facilitated the attack by closing off all access to the town in advance and by permitting the mob’s entrance. It also prevented the entry of medics and journalists. Fascist politicians in the Israeli government endorsed the action. “A closed, burnt Huwara—that’s what I want to see”, one <a href="https://www.timesofisrael.com/we-need-burning-villages-coalition-lawmaker-backs-unprecedented-settler-rampage/">said</a>. “I want to see burning villages.” 
Other politicians were more “moderate”. They said that what happened wasn’t ideal; that the Israeli military should really be in charge of such operations. And that is <a>what it has been </a>doing: regular bombings of Gaza, increased repression of Palestinians living inside Israel, and attempts to stop the expression of any aspect of Palestinian identity, including flying the Palestinian flag. 
It is undeniable that the situation for Palestinians has become more dire over the last decade. The Israeli state has shifted even further to the right. After decades of military occupation, polls and surveys <a href="https://www.i24news.tv/en/news/israel/politics/1661794223-jewish-israelis-have-become-more-right-wing-data-shows">suggest</a> that about 60 percent of Jewish Israelis favour segregation from Palestinian Israelis, and that 60 percent identify as right wing (rising to 70 percent among those aged 18-24).
Since 2018, there has been a great deal of political instability in Israel, reflected in multiple elections for the parliament, the Knesset. (A system of proportional voting results in many parties achieving representation.) The March 2021 election finally led to a government under Naftali Bennett and Yair Lapid, whose majority coalition of liberals and conservatives collapsed in June last year.
The November 2022 election led to another majority government under former Prime Minister Benjamin Netanyahu, the head of Likud, the largest party in the Knesset, with 32 of the 120 seats. This is the most right-wing and religious government in Israel’s history. And it includes fascists. There are currently ten parties in the Knesset. The governing coalition is made up of six.
Likud’s politics descend from Ze’ev Jabotinsky’s pre-World War Two “revisionist”, right-wing Zionism. For pragmatic reasons, in office Likud has distanced itself from Jabotinsky’s idea of a “Greater Israel” including Gaza, the West Bank and parts of Jordan. But it has encouraged and subsidised the colonisation of the West Bank, which is illegal under international law, and has tacitly encouraged colonies that are illegal even under Israeli law.
One of Likud’s electoral bases is Middle Eastern and North African Jews, known as the Mizrahim, which make up 45 percent of Israel’s Jewish population. The party says that it represents their interests against the dominant elite of Ashkenazi Jews (those with European heritage, who are the second largest Jewish group in Israel) and against the Palestinian population.
Netanyahu has four criminal charges against him pending in court, but the cases can’t proceed while he remains prime minister. So he is particularly susceptible to pressure from his coalition partners.
The coalition includes Jewish Power, a fascist organisation whose leader Itamar Ben-Gvir, a colonist in the West Bank and convicted terrorist, is minister for national security. His party is “Kahanist”, using the late rabbi Meir Kahane’s religious justifications for Jewish supremacy. It supports the imposition of “Jewish law” by the state, virulent racism, ethnic cleansing and expansionism through the formal annexation of the West Bank. Kahanists have engaged in terrorism against Palestinians. Kach (“Thus” in Hebrew), founded by Kahane and the political forerunner to Jewish Power, was banned in Israel and the US as a terrorist organisation. In 1995, a Kach associate assassinated Labour Prime Minister Yitzhak Rabin.
Ben-Gvir has led incursions into the al-Aqsa Mosque compound/Temple Mount, one of the holiest sites of Islam and also for some Jews. He has led marches through the Muslim quarter of old Jerusalem and set up an office in the Sheik Jarrah neighbourhood of Jerusalem as colonists were attempting to purge it of Palestinians.
Also in the coalition is the Religious Zionist Party, whose leader Bezalel Smotrich (another colonist, who has called himself a “<a href="https://www.haaretz.com/israel-news/2023-01-16/ty-article/.premium/israels-far-right-finance-minister-im-a-fascist-homophobe-but-i-wont-stone-gays/">fascist homophobe</a>”) is the finance minister and is in charge of civilian affairs in the West Bank, responsible for the Zionist colonies. The party wants to impose Jewish religious law on the population. &gt;
After the Huwara pogrom, Smotrich <a href="https://www.timesofisrael.com/israel-should-wipe-out-palestinian-town-of-huwara-says-senior-minister-smotrich/">tweeted</a>: “Huwara needs to be wiped out. I think the State of Israel should do it”. He recently gave a speech in front of a map of “Greater Israel” that included territory in Jordan and has said that the Palestinian people are an “invention”. Both tropes go back more than 100 years. The denial of the existence of Palestinians is expressed in the Zionist slogan “a land without a people for a people without a land”.
These two fascist parties ran on a joint ticket and won fourteen seats, becoming the third largest group in the Knesset and the second largest in the government. Palestinian journalist <a href="https://www.aljazeera.com/opinions/2023/3/28/israelis-need-to-see-through-the-biggest-lie-of-all">Marwan Bishara</a> noted at Al Jazeera:
“Religious extremists, like ministers Itamar Ben-Gvir and Bezalel Smotrich, are by-products of Israel’s occupation and illegal settlement enterprise, and ... judging from their large and growing following among Israeli youth, they are destined to become very powerful and very dangerous, as the violent apartheid regime persists.”
To implement its agenda, the government announced plans to stack the Supreme Court and limit its ability to override laws. Although the court is right wing, the government’s proposal would not only provide Netanyahu with a personal, legal escape hatch. It would also open the way to even greater repression of Palestinians, women and LGBTI people. The fascists want immunity for Israeli armed forces who commit atrocities in the West Bank.
A protest movement against the proposed judicial change began on 7 January. The first protest attracted more than 20,000 people. But since then, demonstrations have taken place weekly or more frequently, and have grown dramatically.
Israeli forces raided Jenin refugee camp in the West Bank in late January, killing ten people. Such raids are nothing new—Israeli armed forces killed 170 Palestinians, including 30 children, in 2022. But the timing of this raid—and, soon, deadly raids on the Aqabat Jabr camp in Jericho, and later on the city of Nablus—indicates that this was designed to provoke responses from Palestinians and to generate rally-round-the-Israeli-flag national unity. 
A month later, two colonists were shot dead by a Palestinian militant near Huwara—exactly the kind of escalation the government wanted. The Huwara pogrom, took place that night.
Yet the government’s efforts to generate a siege mentality and national unity failed: the protests continued and escalated. Doctors, tech workers and others have engaged in strikes. Military reservists have participated in the protests and refused to train. Demonstrators have blocked important roads, including the Ayalon Highway, a major intercity freeway, in Tel Aviv.
According to protest organisers, more than 600,000 participated in <a href="https://www.youtube.com/watch?v=57Esv4Ckqrw&amp;ab_channel=i24NEWSEnglish">protests across Israel</a> on 26 March. And the demonstrators became even more determined after Netanyahu sacked Likud Defence Minister Yoav Gallant for criticising the proposed judicial reforms. (He said that they would undermine Israel’s security.) 
The Histadrut union federation called a general strike, which was supported by some large corporations, on 27 March, and ceremonial President Isaac Herzog called for the legislative process to stop. There were also much smaller pro-government protests, encouraged by Ben-Gvir, including in Jerusalem where participants attacked Palestinians.
That night, Netanyahu postponed the judicial legislation for a month and, as a concession to the fascists, agreed to establish a <a href="https://www.aljazeera.com/news/2023/4/2/israeli-cabinet-approves-funds-for-national-guard-under-ben-gvir?fbclid=IwAR098cddEiy_xcVv7Cw6FyCzB3onqywWjKK0vf7DkqNk9JwHkrCAKRp0Kfg">National Guard</a> under Ben-Gvir. It’s worth noting, however, that this was already part of the coalition deal underpinning the government and was an extension of plans developed under Ben-Gvir’s ministerial predecessor in the government of Naftali Bennett. The 2,000-strong National Guard will probably contain officers from the particularly vicious Border Police and will enlist volunteers. It will provide the fascists with a militia to attack Palestinians, and Jewish political opponents of the far right as well.
The government calculated that the postponement would give it time to regain support. A war, or at least increased military conflict might help it to do that. So further murderous provocations are likely. Not only raids in the West Bank and the shelling of Gaza, but also against other states. There has already been an aerial bombing near Damascus in Syria, following earlier missile strikes on Damascus international airport.
The protests have nevertheless continued, demanding that the judicial changes be dropped entirely and that Netanyahu resign. There were more than 165,000 on the streets on 1 April.
The divisions that have emerged in Israeli politics are not over Zionism or even ethnic cleansing. Colonies in the West Bank have been expanding since its occupation during the Third Arab-Israeli War in 1967. An issue is the pace of the process. 
Much of the Israeli capitalist class is worried by the outflow of funds from banks and a collapse of foreign investment in the country. Politicians who are not part of the governing coalition fear being permanently excluded from office by further legal changes after the judicial reform is passed. And ordinary Jewish Israelis are worried about the threat to the limited democracy that exists.
But Likud and the fascists either aren’t concerned about the capital flight that the political instability has caused, or think that it will be reversed once they consolidate their position. They are prepared to weather criticisms from liberal Zionists outside Israel and from the country’s staunch allies such as the US.
There was public bickering at the end of March between US President Biden and Netanyahu over the judicial changes. But the alliance is fundamentally sound because Israel remains crucial for US strategy in the Middle East and North Africa, given closer Saudi-Chinese relations. China has brokered a degree of reconciliation between Iran and Saudi Arabia and is the largest purchaser of Saudi oil. So Israel remains the US’s most reliable ally and has the most powerful armed forces in the Middle East.
Some Palestinians and their allies have participated in the protests, but their reception has often been unfriendly, and they have constituted a tiny proportion of the mobilisations, whose participants have overwhelmingly been Zionists.
The judicial reform would increase the oppression of Palestinians and accelerate the colonisation process in the West Bank. It would open the way to the replacement of Israel’s apartheid democracy by an authoritarian regime. So we must oppose it. We can do that while maintaining our support for the Palestinian liberation struggle, criticising the racist and undemocratic basis of the Israeli state and advocating a democratic, secular state in the whole of historic Palestine.

Pogroms and protests in Israel

Major pay cuts and worse conditions are part of a university deal that National Tertiary Education Union officials are touting as the way forward for the whole sector.
The deal at Western Sydney University will impose <a href="https://docs.google.com/spreadsheets/d/1FdoC7a5M9DNCedtmvqKG6T8E7cNw9BH-riyBFgzA9zE/edit#gid=1783436492">a cut in real wage rate</a>s of more than 7.7 percent on most of its staff in the year to June 2023, as wage rises fail to keep pace with the Reserve Bank’s estimates of inflation. That’s the case for all academics, including casuals.
A senior lecturer, already down more than $5,700 in June this year, will be down more than $11,300 next year and down almost $12,000 in 2024.
The lowest paid professional staff (those in levels one to five of the HEW staff classification) will get a $1,000 annual increase to their rate. But this results in a real pay cut of between 5.8 and 6.5 percent by June next year. Similarly, a $500 lift in rates for staff on levels six and seven will leave them more than 7 percent worse off.
A widely reported Reserve Bank announcement, more than a month before the in-principle deal went to a vote by members, made it clear that the union’s initial pay claim would mean real wage cuts for most Western Sydney workers by the end of this year. But union officials still decided to stick with the 5 percent claim and even to discount it.
Minimum research time for academics will be reduced and their marking loads increased. In negotiations with Western Sydney University management, union officials dropped demands that casual workers get sick leave and the same rate of superannuation as continuing workers.
The current enterprise bargaining round at Australian universities is an opportunity to defend and advance members’ pay and conditions through sustained strike action. NTEU leaders are not only squandering the chance to make advances for the workers they are supposed to represent; they are also trying to shore up their own positions within the bureaucracy by selling a dubious path forward to members.
The secretary of the NSW division, Damien Cahill, leapt to proclaim the in-principle deal at Western Sydney a model for the whole union, even before all its details had been worked out. But it is certain that the agreement trades lower real wages and declines in conditions for minor or questionable “concessions” from management, especially on jobs. Cahill is the incumbent leadership’s candidate for national secretary in union elections now under way. The “win” he claims at Western Sydney is part of his election campaign.
Under pressure from NTEU Fightback, a rank-and-file activist group within the union, the officials bumped up the mandatory pay claim to inflation plus 1.5 percent. Several NTEU branches decided that they want inflation plus 2.5 percent, in line with Fightback’s proposal. 
Officials insisted that plus 1.5 percent was a ceiling, not a floor. But now the union’s leaders have approved big cuts in real pay for workers at Western Sydney, while the university increased its profits from $22 million in 2020 to $143 million last year.
The deal also appears to cut the minimum research fraction for academics from 25 to just 20 percent, and their marking load will rise from 135 to 150 students per session.
Top of the list of advances claimed by NTEU leaders is “150 new permanent jobs”. Western Sydney slashed the full-time equivalent of <a href="blank">343</a> continuing and fixed-term jobs from 2019 to 2021. So the 150 full-time equivalent “new” jobs aren’t so new.
University managements have been sacking longer serving workers because they’re generally on higher classifications and increments. This keeps a lid on retirement payouts. Cheaper young workers can then be hired. Recent mass sackings at many universities went beyond any long-term workforce reductions previously planned by bosses. So there was always going to be more hiring once the COVID panic had passed. 
Casual workers at Western Sydney are supposed to get these 150 jobs, which are supposed to be permanent roles. But under the deal, existing casuals will simply be able to apply first for the jobs. Management will decide whether any are appointed. And, for three years, these jobs will not have “regular research allocations”. 
Real paths to continuing employment for casuals are possible. For example, the union could demand that workers automatically get permanent status if they have been employed casually for more than a specified number of weeks over a given time.
The union instead dropped demands to improve casuals’ conditions at cost to the university—another way of pushing management to reduce casual employment.
The announced “25 percent reduction in casual academic labour” sounds pretty good. But this seems to be a purely aspirational rather than enforceable commitment. Enterprise agreements in higher education are littered with non-enforceable aspirational “targets” and “goals” that are never met.
Neither this nor other important matters are spelled out in the “heads of agreement” or “summary of key clauses”, which were all that unionists at Western Sydney received before the in-principle vote on the deal. Not even these summaries were made available to the NTEU’s whole membership when the “win” was declared far and wide.
Does management have escape clauses, as there are for “professional staff work from home rights” and “real restructure protections”?
Professional workers will be able to work from home for two days a week, but supervisors will be able to knock back a “request” that they decide “is unreasonable and ... would unduly disrupt the work of the unit”. Workers won’t be subject to more than one threat of being made redundant during the agreement “subject to any exceptional circumstances”.
What else has been “gained” at Western Sydney in return for pay cuts?
There’s a provision to ensure that when reorganisations abolish positions, the remaining workers won’t have higher workloads. Again, it looks good—but there’s nothing to indicate that management will be forced to fill vacant positions.
Maximum academic teaching time will be reduced by one hour per week. But managers can prevent this reduction if they insist on measuring workloads not in terms of hours, but in terms of “equivalent full-time student load”, whose maximum limit is unchanged.
The provision for converting fixed-term appointments to ongoing jobs has been firmed up a little, but the difficult requirement of three years of continuous employment prior to conversion has not been changed.
There are also changes that are worthwhile but cost management little or nothing: superannuation for workers on unpaid parental leave; gender affirmation leave; five minutes from the union during staff induction sessions; an Indigenous employment target of 3 percent of the workforce (again without any mention of an enforcement mechanism); retention of rights to Indigenous intellectual property.
The NTEU branch at Western Sydney University is relatively weak. And the deal there follows a token half-day strike. In contrast, the strongest branch in the country is at the University of Sydney, where workers generally have the best pay and conditions. There have been three days of strikes, and further action is planned, over an ambitious set of union demands that would reduce workloads, improve job security and increase real wages.
Unfortunately, according to the student newspaper at the university, union branch president <a href="blank">Nick Riemer</a> thinks that the Western Sydney deal “should reset [enterprise agreement] negotiations everywhere”. That would be a huge retreat for workers across the sector and especially at Sydney University. Management at Western Sydney was only too happy to accept the NTEU officials’ capitulation, even if it was clad in the rhetoric of “union win”.
All this continues the colossal sell-out of pay and conditions that the same national NTEU leadership team came up with in the first half of 2020 when faced with widespread job cuts that university managers blamed on COVID. The so-called Jobs Protection Framework was dropped because of a widespread revolt by rank-and-file unionists, which also led most university bosses to rethink the advantages of such an industry-wide deal.
Where local versions of the Jobs Protection Framework were pushed through by the joint action of management and union officials, pay was cut and jobs weren’t protected; they were slashed. That happened at Latrobe and Monash universities, at the University of Western Australia—and at Western Sydney University.
Linking the Jobs Protection Framework with the latest deal is, in the boastful words of the Western Sydney NTEU branch president, “something strange and remarkable”. But this isn’t because it is heroic; it’s because union leaders continue to sacrifice their members’ livelihoods to management’s bottom line.
No wonder NTEU officials looked to Western Sydney University this time around for a dubious “win” and a way out of undertaking the kind of industrial campaigns that could improve members’ lives but which require massive organising efforts.
This article was updated on 20 August.

University union officials want PAY CUTS. Again

At the heart of capitalism’s impressive economic dynamic there is a dirty secret. And it’s a BIG secret.
Capitalism gives rise to crises in many ways because it puts profits before the satisfaction of human needs: floods, bush fires, droughts due to global warming; new diseases and pandemics; and wars. But human suffering on a huge scale recurs in periods of mass unemployment and declining living standards for the bulk of the population for strictly economic reasons.
Economic crises are turds in the custard of capitalist prosperity.
The productivity of human labour has increased enormously under capitalism, driven by the logic of competitive accumulation: investment to make profits to reinvest to continue making profits. This process has led to technological advances like the shift to collect wheat crops with combine harvesters instead of sickles, or communication by video calls instead of letters carried by horses or boats.
In The Communist Manifesto, where Marx and Engels praised this dynamism, they also recognised that capitalism is prone to profound economic crises: 
“In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity—the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed.”
Later, Marx provided systematic explanations of why the very foundations of capitalist production mean capitalist growth is unstable, fragile and subject to reversals.
Most of the things on which our survival and flourishing depend are commodities, at once use values, which we need to fulfil specific functions, and values, which exchange based on the quantities of human labour embodied in them. That was not the case in pre-capitalist societies, the bulk of whose production was destined for the consumption of producers, rather than sale on a market.
But, as technology advances under capitalism, it is only by accident that the proportions among use values and the proportions among exchange values match, so growth is seldom smooth.
There is also a long-term tendency for the rate of profit to fall and for capitalism to break down. Because of it, the ongoing potential for disrupted production, due to disproportions in the expansion of the number of use values and values, also takes the form of deep crises.
If they are to stay in business, bosses need to make profits. To make profits they must be able to sell the products their workers produce. To do that, they have to compete with other employers selling the same kind of commodities.
The most important, though not the only, way that they compete is by keeping down the price of their products compared to those of their rivals. Keeping the lid on wages and the costs of raw materials is part of this effort. So is investment in new, more expensive machinery and equipment that makes it possible to produce the same or better commodities with less labour.
This competitive accumulation of productive resources means that bosses pay out more and more on machinery and equipment compared to their outlay on labour.
The first bosses who use such a new technology can gain massive profits. Their costs have gone down, but the prices they charge can be set just below those of their competitors still using the old technology, reflecting the average costs of production in the industry. Their profit margins are higher, and their share of the market expands. The innovators get an above average rate of profit.
The problem is that the advantages of being the first to use a new technology do not last forever. Eventually all the bosses in the industry will also adopt it, or they will go out of business. Then the prices charged will reflect the now lower average costs involved in using the new technology. Consequently, the rate of profit of the innovating bosses falls, as does the average rate of profit in the industry.
In 2003, the Wall Street Journal spelt out how this worked with new technology for LCD screen manufacture:
“Since the cost advantages are highest for those who move first, companies have been in a headlong dash to boost manufacturing capacity.”
The corporations that invested in the state-of-the-art plants and got them pumping out screens quickly made big profits, as prices still reflected the fact that the slower corporations were using old-fashioned equipment. But all producers were forced to load “up on advanced new production capacity, anxious to lock in market share” or leave the industry. Pretty soon, profits in the industry fell.
“While price cuts brought on by increased supply stand to be a boon for couch potatoes the world over by putting a flat-screen TV within affordable reach, they threaten to doom the industry to a future of cut-throat competition and slim margins.”
When profits fall, total investment by bosses declines and growth slows. When profits fall far enough, a crisis sets in: growth stops or economies even contract, as firms go out of business, workers are laid off and the overall level of production declines.
Rising living standards give way to lower real wages and/or unemployment for the working class. Capitalism undermines the conditions of its own health—including the reproduction of workers’ capacity to labour , its most precious commodity.
There are “counter-tendencies” to the basic tendency for the rate of profit to fall. Some are automatic. Increased productivity reduces the value of the food, clothing, shelter and other commodities that workers consume. Money wages can stagnate or fall while the cost of living also declines, so workers can still turn up to work properly nourished, clad, healthy and educated. Higher productivity also reduces the value of productive resources, slowing the fall in the rate of profit.
But the effects of these counter-tendencies are necessarily limited. Competition pushes bosses to invest money saved by them in more expensive, but labour-saving, technologies.
Other mechanisms can boost profits for a while too. During crises, bankrupt capitalists sell their productive resources at bargain prices. With lower costs, the new owners can now produce at a profit. 
Bosses can intensify exploitation by cutting wages or intensifying work, to raise the share of profits in total output. Attacks on trade unions and the use of racism by bosses and governments to divide and weaken workers’ capacity to resist help increase profits at the expense of wages.
The discovery of new sources of cheaper raw materials can boost profits too. By engaging in imperialist trade and investment policies, states can improve the profits of locally based businesses at the expense of those in other countries. 
Large amounts of profits invested in unproductive industries like armaments, which do not produce commodities that go back into the production process, can stabilise the rate of profit under some circumstances. That happened during the Cold War.
These counter-tendencies mean that capitalism does not simply break down once and for all, as the rate of profit declines month by month, year by year. Instead, the alternation of periods of custard prosperity with periods of turds of stagnation is typical of the system.
To understand the state of the economy at any time, we have to assess the balance between the tendency for the rate of profit to fall and its counter-tendencies. But we also have to consider shorter term factors that influence profits and give rise to the business cycle.
In a recession, prices of commodities—including the price of labour power, wages—fall below their value, profits slump and workers are laid off. Eventually, in the initial phase of an economic recovery some capitalists need to renew their fixed capital (buildings, machinery or other equipment) if they are to stay in business. They take advantage of rates of profit improved by lower costs and tentatively expand their output and investment. Their employment of idle productive capacity and labour power can stimulate other sectors which supply them with inputs or produce the kinds of commodities that workers consume.
As the economy gathers pace, there is greater competition for workers, raw materials and credit. This increased demand puts upward pressure on prices, which rise above the value of their commodities, and interest rates. The extent to which wages rise also depends on the extent to which workers fight for increased pay. But as new investments increase capacity and output, prices slide back towards commodities’ values, and profits decline.
Eventually, as profits are eroded, the economy becomes more vulnerable to shocks that can trigger a recession. The oil shock, when Middle Eastern countries pushed up the price of this strategic commodity, was an important factor in setting off the deep recession of the mid-1970s. The collapse of extremely risky mortgage finance providers, then the investment bank Bear Sterns, which speculated in mortgage-backed securities, then Lehman Brothers bank, led to the Global Financial Crisis of 2007-2009.
The depths and durations of downturns will be conditioned by the longer-term movements in the rate of profit. During the long postwar boom, from the late 1940s through to the early 1970s, recessions were generally short and shallow. Since then, growth has been more uneven. The Global Financial Crisis was the most severe recession since the Great Depression of the 1930s. In 2020, COVID plunged the world into the steepest international economic downturn ever.
There are additional complications to consider when assessing economic situations, beyond the tendency for the rate of profit to fall and the business cycle. They are consequences of uneven capitalist development internationally.
The Global Financial Crisis, for example, did not have the same intensity in every country. It affected China and consequently one of its main raw materials suppliers, Australia, much less than the rest of the world.
In the face of intensified international competition for declining sales, many Chinese industries had the advantage of investments in more recent and efficient technologies, along with relatively cheap but skilled labour. Chinese purchases of Australian iron ore, coal and educational services remained robust.
Making economic predictions is a very uncertain activity, even when based on systematic, concrete analysis. But we can be confident of the conclusion that crises are unavoidable.
Capitalists decide their levels of output and investment using forecasts that are not consistently reliable. Competition among them makes it impossible to reliably plan production to achieve proportional growth in all sectors and avoid crises. It is not in their interests to disclose the details of their operations to rivals, state regulators or international institutions. And they cannot escape the logic of the tendency for the rate of profit to fall.
The unavoidable economic contradictions of their system mean, as Marx and Engels put it, that the capitalist class “is unfit to rule because it is incompetent to assure an existence to its slave within his slavery, because it cannot help letting him sink into such a state, that it has to feed him, instead of being fed by him”.

Promise and devastation: understanding economic crises

Australian governments and their counterparts around the world have largely succeeded in desensitising us to avoidable mass deaths and disease. In the week to 6 July, 294 people died of COVID-19 in Australia, more than 40 a day. 
In May, OzSAGE, an organisation of health-related experts, issued an <a href="https://ozsage.org/media_releases/covid-19-has-become-a-leading-cause-of-death-in-australia-urgent-call-for-action/">urgent call for action</a> to prevent COVID-19 deaths, pointing out, “Higher COVID case numbers are leading to increased hospitalisation, suffering and death. This is the first time an infectious disease has been a leading cause of death in modern history”. In that month, Australia had the highest rate of new infections in the world, apart from a few small islands.
Already stressed hospital workers and facilities continue to be overwhelmed by new cases. One of the latest strains of the Omicron COVID-19 variant is even more virulent than its predecessors and, rather than our noses and throats, targets our lungs in particular. That makes it a greater threat to health.
“Long COVID”, ill health caused by the disease that lasts weeks or months, is affecting large numbers of people. <a href="https://theconversation.com/triple-vaccination-seems-to-reduce-the-chance-of-long-covid-but-we-still-need-to-prepare-for-a-jump-in-cases-183428">University of Sydney health researchers</a> point out: “With one in 20 people with COVID still experiencing symptoms three months later, long COVID might even become Australia’s most significant cause of longer-term disability”.
Yet despite the rising death toll, hospitalisations and long COVID, governments have been making us more vulnerable to the disease by lifting measures that protect us. The availability of fourth vaccine doses may have been extended to those over 30 on 7 July, but it is still not available to everyone. And that announcement came the day after the Albanese government scrapped the requirement that people arriving in Australia have at least one vaccine dose, in effect inviting new strains of the disease to enter the country freely. 
This follows states dropping or scheduling the dropping of vaccination requirements for teachers, and the abandonment of many of the simple but effective measures that prevent disease spread, such as mask mandates for public indoor areas. Enforcement of mask mandates on public transport is generally extremely slack in Australia.
Governments claim to be “following the expert advice”. No doubt. But it’s the best advice money can buy, from people on government payrolls, whose incomes, statuses and careers could be jeopardised if they embarrass their employers.
In reality, governments seem to have had two main concerns in setting their COVID-19 policies: their electoral viability and keeping production and profits going. To start with, when the dangers of COVID-19 weren’t clear, the most precautions were taken: lockdowns and mask mandates along with large-scale public information campaigns. In richer countries, like Australia, there was unprecedented income support provided for those who couldn’t work. Governments didn’t want a substantial chunk of the workforce starving or turning on them.
But, in some cases, like Sweden and federal US policy under Donald Trump, production and profits were the top priority from the beginning. This was only thinly disguised by disingenuous appeals to “herd immunity”, supposedly generated by mass infection. That was UK Prime Minister Boris Johnson’s initial response, while in private declaring his intention to “let the bodies pile high”. Scott Morrison’s Liberal government in Australia had the same inclination, but it was tempered by the actions of state governments, whose actions raised public expectations about the right to be safe and the responsibility of government to contain infectious disease.
Then vaccines became available. The partial protection they provided was very welcome. But with time and the emergence of new variants, their effectiveness has declined. Still, they have been increasingly used as a justification for dropping lockdowns, along with the test and trace systems, that worked well in Australia, and other measures aimed at preventing disease, most recently weakening isolation requirements for people who are infected.
The early Omicron variants, while more infectious, were less virulent (likely to cause severe disease or death). That too was used as an excuse to remove public health measures and shift responsibility for public health from governments and society to the decisions of individuals. But there is no guarantee that Omicron won’t be replaced by another even more infectious but also more virulent strain.
Conservative politicians, backed by far-right mobilisations on the street, led the let-it-rip charge. Dan Andrews’ Victorian and Mark McGowan’s Western Australian Labor governments held out longest against this push, and had very widespread support for doing so. But they too fell into line.
Australian governments’ increased health funding in the face of COVID-19 has been trivial and wholly inadequate compared with what’s needed.
Around the world, governments have given in to the virus, prioritising the imperative that businesses operate freely and produce profits. “Don’t focus on the number of infections”, they say, “but on hospitalisations”. The unstated message is “Don’t care about people dying”.
As the rate of people in hospital with COVID-19 has surged, governments have gone quiet about hospitalisations as well. On 9 July, more than 3,800 people were in hospital with COVID-19 in Australia, the highest number since the initial Omicron outbreak in early 2022. That number is rising fast. More than 1,840 of these patients are in New South Wales. That’s the equivalent of the state’s two biggest hospitals full entirely with COVID-19 patients.
We can add to that the many people whose health has been badly affected by the virus. A large US <a href="https://www.nature.com/articles/d41586-022-00403-0">study</a> in February found that the risk of stroke is elevated by 52 percent after a COVID-19 infection, heart attack by 72 percent. A <a href="https://www.abc.net.au/news/2022-06-25/long-covid-clinic-st-vincents-cognitive-decline/101178450">study</a> at St Vincent’s hospital in Sydney tracked 128 people in the year following their infection—a majority of whom had only mild cases. The ABC reports that “some sort of cognitive decline was recorded in almost all of the participants, regardless of the severity of the initial infection”.
Every week, more studies are being released that confirm that the scrapping of health measures is inflicting a greater and greater level of ill health on the whole population, and especially on the working class. OzSAGE, whose members are not on the payrolls of government COVID-19 advisory bodies, has a series of important recommendations to minimise the death toll and disease burden. These would not be cheap, but they would put people’s health before profits. They include the provision of free high-quality masks, expanded eligibility for the fourth booster dose, legislated standards for indoor ventilation and air filtration, free and accessible PCR and rapid antigen tests and improved access to treatment.
Any sane society confronted by a vicious new disease would do everything in its power to suppress it. If that wasn’t possible, it would dramatically and permanently expand the health workforce, rather than relying on already overburdened staff to do even more. It would maintain testing, rather than severely restricting access to PCR tests, as the Andrews government has just done in Victoria. It would have income support for everyone affected by COVID-19, a measure now wholly abolished by the Albanese government.
A decent society would mount a colossal public education campaign about how to avoid getting infected or infecting others, and train a public health workforce in the thousands. It would put massive resources into vaccine and treatment research but also into ventilation and air filtration. It would reorder the way schools, workplaces, shops and recreation facilities operate in order to minimise risk of aerosol transmission. And it wouldn’t be intimidated by a tiny minority of far-right sociopaths who oppose broadening requirements for people to be vaccinated and to wear masks so they are much less likely to infect workmates, friends, family and people in the shops.
Our rulers have done none of this. Over the past year they’ve just let the bodies pile up and hoped that we are all too excited about getting back to the gym to notice or care. And businesses have seen the cash pile up, as thousands suffer and die. A sickening and thoroughly capitalist crisis continues.

Jerome Small

COVID-19: a sickening capitalist crisis continues

From early in her political career, Rosa Luxemburg was concerned with the struggle against imperialism and war. Her analysis and the tactics she advocated weren’t all correct, but she was always on the side of the working class and its independent organisation, and of the oppressed. That was true in her approach to the “national question”, her responses to wars and her theory of imperialism.
Luxemburg grew up in the Russian-occupied province of Poland, called the Congress Kingdom. The authorities repressed the Polish language and culture. There was, for example, no legal Polish-speaking university. During the early 1890s, Luxemburg formulated an approach to the oppression of the Polish nation and the Marxist “national question” in general.
She argued that the Congress Kingdom should remain part of the Russian state. One of the most industrialised areas of the empire, it was economically integrated with the other territories under tsarist rule.
By severing that link, national independence would be economically disruptive and reactionary, she argued. Furthermore, Polish and Russian workers had a common interest in bringing down both tsarism and capitalism. Polish national rights could be fought for now and most effectively achieved within a democratised Russia.
She applied the same argument to Bohemia in the Austro-Hungarian Empire and Alsace-Lorraine in the German Empire. Both were also industrially developed and integral parts of larger economic units. But she supported the independence of economically backward Armenia from the Ottoman Empire.
Insistence on dogmatic rejection of any whiff of Polish nationalism, by Luxemburg and her fellow leader of the Social Democratic Party of the Kingdom of Poland and Lithuania (SDPKPL), Leo Jogiches, was a factor holding back the consolidation of revolutionary socialist forces in Poland until 1918. In December of that year, the Communist Workers’ Party of Poland was formed in a merger of the SDPKPL and the Polish Socialist Party-Left, which had split from the nationalist Polish Socialist Party a dozen years before.
Her argument failed to recognise how fights for national rights and national self-determination could be harnessed to struggles to weaken the world’s dominant powers, the states that are the greatest obstacles to achieving socialism, without compromising the independence of workers’ movements from bourgeois nationalist political currents.
But Luxemburg did forthrightly oppose the tsarist regime’s Russification policies in the Congress Kingdom and efforts to Germanise the Polish provinces of the German Empire. In 1900, she wrote:
“Truly, it is high time for the Polish people to shake off its lifelessness, to express its indignation, to rise to fight against Germanisation. How to lead this fight, which path is the most effective to defend the Polish nationality—these are questions that merit serious consideration.”
In response to a peace conference proposed by the tsar in 1898, Luxemburg identified it and similar ideas—predecessors of the United Nations—as farcical and ineffective means of preventing war. They are just public relations exercises for the military powers that participate in them, because “big-money capitalism and militarism depend on each other like siblings, bourgeois republics, whether constitutional or absolute monarchies, are nothing more than meaningless company signs for the organisation of the sectors of industry, trade, and agribusiness that make up capital”.
In the social crisis created by the Russo-Japanese War, she recognised revolutionary opportunities. Although in exile and a member of the German Social Democratic Party (SPD), she remained a leader of the SDPKPL in Russia’s Polish province. Luxemburg and her Polish party called on Russian and Polish workers to fight independently for revolutionary democratic change and not to rely on the tepid reform efforts of even the braver sections of the bourgeoisie. And, of course, she welcomed the revolution when it broke out in January 1905, still in the midst of the war. In December, she went to Warsaw to participate in it.
After a period of political activity and then imprisonment in Warsaw, and back in Germany, Luxemburg participated in the German Social Democratic Party’s 1906 congress. The party’s founder and leader, August Bebel, opposed a motion for a militant response to any German military intervention in revolutionary Russia. Luxemburg objected.
Then, at the 1907 International Socialist Congress, she and Vladimir Lenin, with their experience of the Russian revolution, successfully moved that the resolution on war include the assertion: “If war should ... break out, [‘workers and their parliamentary representatives in the countries involved’] have the duty to work for its speedy termination, and to exploit with all their might the economic and political crisis created by the war to arouse the population and to hasten the overthrow of capitalist rule”.
The resolution was adopted unanimously. But only a few of the International’s member parties and small minorities in others took it seriously.
In her most substantial work, The Accumulation of Capital, Luxemburg tried to demonstrate that imperialism, militarism and war are inherent features of capitalism. She provided scorching descriptions of the effects of imperialism, including the horrors of the Atlantic slave trade, the violence of British colonialism in India and French colonialism in Algeria, the British Opium Wars against China and the hyper-exploitation of peasants associated with the Egyptian state’s indebtedness to foreign lenders.
“Capital knows no other solution to the problem [of incorporating new productive resources and workers, and securing markets for its products] than violence, which has been a constant method of capital accumulation as a historical process, not merely during its emergence, but also to the present day ... Hence permanent military occupation of the colonies, indigenous uprisings, and expeditions to crush these are the order of the day for any colonial regime.”
The bedrock of her theory of imperialism, that it was a consequence of capitalism’s tendency to breakdown that gives rise to sporadic, unavoidable economic crises, was not only accurate but fully in accord with Marx’s analysis of the logic of capitalist development. But Luxemburg’s explanation of the main mechanism that gives rise to the breakdown tendency and consequently to imperialism was wrong.
Her account, and less elaborate versions of it outlined by earlier Marxists, was ultimately based on the pre-Marxist underconsumptionism theory of Simonde de Sismondi. They believed that capitalist production outstrips the capacity of society to consume, especially because the purchasing power of the working class is restricted by their exploitation. All the commodities produced can be sold and profits maintained only if the excess over what was consumed within the framework of capitalism is disposed of by selling it outside of that framework—so sales to classes not involved in capitalist relations of production or in areas where capitalism is little or undeveloped. Capitalist states’ competition for control over control such territories leads to the establishment of “protectorates”, annexations and war.
Such measures to “realise” all the surplus value produced within capitalist relations of production, she argued, can temporarily hold off the system’s tendency to break down. But the incorporation of additional social layers at home and areas abroad into capitalist markets leads to the extension of production relations and the problem of overproduction is reproduced on a larger scale.
Capitalism’s core economic contradiction, however, lies deeper than the problem of finding outlets for commodities that have already been produced. The very process of increasing the productivity of labour, by applying more and more machinery and equipment in the heart of capitalist production, means that the rate of profit tends to fall.
Rather than being driven by a need to realise surplus value, imperialism provides a series of mechanisms that increase the amount of surplus value available to particular countries and corporations in competition with each other. These include (preferably monopoly) access to natural resources and cheap labour power; unequal exchange between the outputs of higher tech industries in imperialist countries and those produced with cheaper production techniques elsewhere; and high-interest loans.
Nevertheless, unlike Karl Kautsky, the principal theorist of the SPD, and the International, Luxemburg insisted that imperialism and war were inherent in capitalism rather than optional extras.
So, while most “socialist” parties sided with the ruling classes of their countries, Luxemburg took the International’s position on war, which she had formulated, seriously when the First World War broke out. She opposed the conflict and recognised the opportunities for revolution it could open up. Her position was spelt out in the Junius Pamphlet (see separate <a href="https://redflag.org.au/article/rosa-luxemburgs-junius-pamphlet">article</a>).

Rosa Luxemburg on imperialism and war

The German federal election is on 26 September, and the Greens have been second to the Christian Democrats (CDU) <a href="https://www.newstatesman.com/world/2021/08/german-election-2021-new-statesman-s-poll-tracker">in polls</a> over most of the past year. At one point they were even the frontrunners. Quite a change since the last election, in 2017, when they were the smallest of the six parties that made it into the parliament.
No party is anywhere near getting a majority in its own right, so another coalition government is inevitable after September. Would a Greens prime minister make for big changes? We have to look at the history of the Greens to answer that question.
When the Greens stormed onto the state and federal political stages in Germany in the early 1980s, they were a breath of fresh air. Their famous slogan in the 1990 federal election was “Everyone’s talking about Germany. We talk about the weather”. But their appeal was not due only to environmentalist concerns about pollution.
The party’s roots were in the radical movements of the 1960s and the militant anti-war and anti- nuclear campaigns of the 1970s. The Greens and their regional forerunners sought to complement grassroots initiatives, including for environmental protection, social justice, gay rights and the legalisation of cannabis. They asserted: “We will not participate in a government which pursues the [current environmentally, ecologically and politically] destructive course”.
Early party members and leaders included graduates of 1960s student anarchist and 1970s Maoist groups but also some conservativeas well as right-wing, “blood and soil” environmentalists. The far right was quickly driven out. But there was soon a prolonged factional struggle between “Fundis” (leftist fundamentalists) and “Realos” (conservative realists) over a range of policies and whether or not to participate in coalition governments. Among the leading Fundis were former anarchists Joschka Fischer and a hero of the 1968 student movement in Paris, Daniel Cohn-Bendit, along with former Maoists Reinhard Bütikofer and Winfried Kretschmann.
The Realos won. The focus on parliamentary politics and “exercising power” by entering into governments propelled the German Greens, as it has the Australian Greens, to the right.
They were the junior partner in a federal coalition under the Social Democratic (SPD) Prime Minister Gerhard Schröder between 1998 and 2005. Fischer was deputy prime minister and foreign minister. The “anti-war” Greens voted for German participation in a war for the first time since 1945—the NATO bombing of Serbia in 1999. Then, in 2001, German troops were dispatched to fight in Afghanistan.
The shift to the right was not confined to foreign policy. The Red-Green coalition was also responsible for Germany’s decisive turn to neoliberal economic policy, in the <a href="https://www.dw.com/en/a-quick-guide-to-agenda-2010/a-988374">Agenda 2010</a> package. This was a multi-front attack on German workers.
In 2003 and 2004, the coalition cut the lowest income tax rate by 4.5 percent (from 19.5 to 15 percent), but cut the rate on the highest income earners by 6.5 percent (from 48.5 to 42 percent). It reduced public provision of health care and forced people to pay for part of the cost of medicines and visits to doctors. Together with the SPD, the Greens also reduced pensions. The associated <a href="https://en.wikipedia.org/wiki/Hartz_concept">Hartz labour market “reforms”</a> legalised forms of insecure work for the first time and slashed unemployment benefits.
Since 2005, the Greens have been out of office at the federal level. But they have participated in ruling coalitions in eleven of Germany’s sixteen states. Their choices of coalition partners have been very promiscuous. The Greens are currently junior partners in a coalition with the Left Party and SPD in three states, junior partners with the CDU and SPD in another two, junior partners with the CDU or SPD in a further two, and junior partners in a coalition with the CDU or SPD and the right-wing, free market Free Democrats in two states.
The Greens are the senior partner in a coalition with the CDU in Baden-Württemburg. Former Maoist, then Greens Realo, Winfried Kretschmann became the first Greens premier of a German state in 2011. Initially he led a coalition with the Social Democrats. The SPD’s decline led the Greens to switch to the CDU as their junior partner in 2016.
Baden-Württemburg is one of Germany’s most prosperous states, making the Greens’ conservative budgetary policies easier to bear. The state party has favoured a tightening of Germany’s political asylum rules. Kretschmann offered Baden-Württemburg as a site for the disposal of nuclear waste. By abstaining in the vote, the Greens parliamentary group recently allowed the candidate of the far-right Alternative for Germany (AfD) to be appointed to the state’s constitutional court.
The conservative news magazine Der Spiegel in 2016 observed that the Greens in Baden-Württemburg were “bourgeois, locally rooted and so ecologically calibrated that the owner of a Porsche Cayenne no longer even thinks that there is a contradiction between their choice of a means of transport and their decision in the voting booth”. The Greens won votes in the elections earlier this year at the expense of the CDU.
Overall, Greens policies have shifted to the right and the party has broadened its voting base to wider sections of the white-collar working and middle classes, beyond those interested in significant social and lifestyle alternatives, though not to people on low incomes.
At the federal level, the Greens have benefited from being in opposition to the “Grand Coalition” of the CDU (and its Bavarian sister party, the Christian Social Union), led by Prime Minister Angela Merkel, and the SPD between 2005 and 2009 and again since 2013.
Although still the largest party, the CDU has lost a lot of support lately after fifteen years in office under Merkel, who is retiring. Her replacement, Armin Laschet, is relatively unknown outside Nordrhein-Westfalen, Germany’s largest state, where he is the premier.
Since Schröder’s hard turn to neoliberalism in the early 2000s and following years as the junior partner in the Grand Coalition with the CDU-CSU, the Social Democrats have been discredited among sections of their core working-class and trade union base. On 12 August, SPD co-chair Norbert Walter-Borjans denounced train drivers striking over pay and conditions for alienating customers.
The Left Party has more traditional social democratic policies and an almost exclusively parliamentary orientation, but lacks the support of the bulk of the trade union bureaucracy and has been plagued by the <a href="https://theleftberlin.wordpress.com/current-debates/whats-eating-sahra-wagenknecht-aufstehen-refugees-and-racism/">capitulation to racism</a> of its most prominent politician, Sahra Wagenknecht. The Free Democrats, with their dogmatic free enterprise ideology and wavering between far-right and liberal social policy, have always had limited appeal, especially beyond the self-employed middle class, although they have also benefitted from opposition to the Grand Coalition. And the ability of the AfD, set up in 2013, to expand its support has been limited by counter-mobilisations against racist movements on the street—out of which it grew early on—internal conflicts between its fascist and merely hard-right wings, and its COVID denialism.
Unlike the Left Party and the AfD, the Greens have been united around their generally conservative program and were well placed to expand support in the middle of the political spectrum, at the expense of the centre-right CDU and centre-left SPD, and compared to the limited radicalism of the Left Party and of the far-right AfD at the extremes.
The federal Greens are chaired by Annalena Baerbock and Robert Habeck. In April, after Baerbock was selected as the party’s candidate for prime minister in the upcoming elections, the Greens briefly nudged ahead of the CDU in opinion polls for the second time since mid-2019. Support declined, however, after right-wing media beat-ups over minor errors in her curriculum vitae and a tax return, and a spurious accusation of plagiarism.
Baerbock has never had a real job, going straight from university to a series of staffer jobs with Green politicians before entering the federal parliament in 2013. Her husband coordinated contact between the Greens and big business before moving on to the better paid job of senior expert, corporate affairs, at DHL, the freight and logistics giant.
The Greens’ main federal election policies this year include bumping up the highest income tax rate, which they helped Schröder’s government reduce. Similarly, they propose raising welfare payments that the Red-Green coalition cut. The Greens want to make German citizenship far more accessible for immigrants and automatic for people born in the country. The party has watered down its earlier policy of completely ending legal regulation of women’s right to abortions. Both the European Union and NATO are at the centre of Greens foreign policy, along with willingness to send the German armed forces abroad on “humanitarian” missions. They promise to end coal-fired electricity by 2030, instead of the current government’s target of 2038.
Overall, the Greens now have a well-established capitalist approach. In their <a href="https://www.gruene.de/artikel/wahlprogramm-zur-bundestagswahl-2021">2021 federal election program</a>, they talk in terms of giving the market “a social-ecological framework”, “promoting entrepreneurial spirit, competition and ideas”, making “financial markets more stable and sustainable” and “budgeting soundly, far-sightedly and fairly”. In other words, they are as devoted to managing capitalism as the other parties in the German parliament, differing only in the extent to which they recognise that climate change and environmental destruction are a threat to profits.
All the recent opinion polls suggest that the German government after the election will be a coalition led by the CDU-CSU. It may include the Greens. Whatever the outcome, a predicted Greens advance over their performance last time will only bring a gust of stale, middle-of-the-road wind.

The German Greens: from environmental peaceniks to neoliberals with guns

The Labor Party has decided to support the government’s tax cuts for the rich. Worth an estimated <a href="https://www.smh.com.au/politics/federal/stage-3-tax-cuts-to-cost-184-billion-as-decade-of-deficits-looms-20210727-p58dd1.html">$184 billion over ten years</a>, Labor politicians are confident that this massive concession to billionaires, <a href="https://www.news.com.au/finance/economy/australian-economy/aussie-billionaires-wealth-surges-during-coronavirus-pandemic/news-story/2cfbc89d28cc1fd2508a13e99cf70f93">whose wealth has doubled during the pandemic</a>, is in the interests of the poor and downtrodden. It’s a step towards greater fairness and equality. So is the ALP’s decision to ditch its own modest proposal to reduce the negative gearing tax give-away to the well-off. 
How can that be?
Well, according to the logic of Labor politics, the highest good is winning office and, by definition, ALP governments benefit everyone. The right wing of the party is clearest about this. But it’s also the position of the left, combined with a dose of handwringing or tissue shredding over the sacrifices of principle—the constant concessions to the rich—that must be made to achieve the higher good.
Understanding politics would be much easier if there were a simpler match-up between parties and social classes: Liberals and Nationals for the bosses, Greens for the middle classes, Labor for workers. But its more complicated.
Workers and their dependents are around two-thirds of the Australian population. The conservatives do most straightforwardly express the views of bosses. Some of them play a very active role in the Liberal Party machine. Along with taxpayer subsidies, big business is the main source of funds for both the Liberals and Nationals. And a few capitalists (Malcolm Turnbull, for example) have even been among its prominent parliamentarians. But neither the Liberals nor the Nationals would ever win elections unless significant numbers of workers voted for them.
Greens voters are disproportionately professionals but most of them are white collar workers, like teachers, who sell their ability to work for a wage, have limited control over what they do on the job and no control over other employees.
Labor’s working-class base has declined, but it still exists. Even if most workers no longer vote for the ALP, they are a much larger proportion of its electoral base than they are of the other parliamentary parties. So the most working-class electorates are generally the safest Labor seats.
At least as important, there is a connection between affiliated trade unions and the Labor Party, via the union officials. They control their unions’ delegations to ALP state conferences, play a major role in the extra-parliamentary machine and have been treading the track from union office to parliamentary suite since the party was established in the 1890s.
And for a well over century, Labor has been committed to managing Australian capitalism. In government at state and national levels on many occasions, it has not deviated from that commitment, which is a fundamental aspect of its make-up.
In fact, its links with the working class mean that Labor can sometimes deliver more for the capitalist class than the conservative parties. The decline in workers’ living standards under John Curtin’s government during World War Two, the introduction of real-pay-cutting wage indexation under Gough Whitlam and likewise Bob Hawke and Paul Keating’s Prices and Incomes Accord, which also reduced real wages and conditions and intensified work, are examples.
Of late, Labor has been complaining about rising government debt. “Deficits as far as the eye can see”, <a href="https://jimchalmers.org/latest-news/speeches/this-government-s-eighth-budget-generational-debt-without-a-generational-dividend/">whinged </a>Shadow Treasurer Jim Chalmers in May. Fearmongering about deficits is one of the conservatives’ justifications for cutting public services. At that time, Chalmers was critical of tax cuts for the rich. But he didn’t call for higher taxes on companies and the wealthy to increase the social wage while reducing the deficit.
The ALP’s tax policies have followed the same pattern. Curtin imposed national income tax on workers for the first time. The Hawke-Keating era (1983-96) saw <a href="https://treasury.gov.au/publication/business-tax-working-group-consultation-guide/consultation-guide/the-history-of-australias-company-tax-rate">cuts in company tax rates</a>. Labor has been complicit in the decline in the top marginal rate of tax, imposed on people with high incomes, from 75 per cent in 1952 to 37 per cent today.
Now Labor has climbed on board the give-aways-to-the-rich wagon and agreed to a further drop to 30 per cent in 2024—which will be more than $17 billion a year lost to government revenues. Chalmers has done a backflip, justified by the need to avoid a scare campaign over taxes against the ALP in the next federal election.
Labor’s devotion to “fiscal responsibility” has meant that the first backflip is being followed by more, at the expense of workers and the poor. To keep the deficit down, given the tax cut, spending will have to be slashed. According to the Sydney Morning Herald, the party will start by <a href="https://www.smh.com.au/politics/federal/federal-labor-set-to-dump-multibillion-dollar-cancer-and-dental-pledges-20210727-p58den.html">dropping its promises</a> to pay for pensioners’ cancer treatment and dental care.

Labor’s plan to help workers by handing the rich $184 billion

In the middle of unprecedented management and government attacks on university workers, National Tertiary Education Union (NTEU) officials have declared war on rank and file unionists they disagree with.
There has been an outraged response across the union and beyond. At least 626 people, including 430 members of the NTEU, have signed the<a href="https://docs.google.com/forms/d/e/1FAIpQLSfaFmLOmDYajnUrTAnVhfG6sWr2CZpD9PGdxnh3Mf3hRiGIbA/viewform?fbclid=IwAR3iqaVMLsj2LAJjd2MrweUe215aZSpkAJhS1kpJjOeyG7yYivoa-eFFSSk"> </a><a href="https://docs.google.com/forms/d/e/1FAIpQLSfaFmLOmDYajnUrTAnVhfG6sWr2CZpD9PGdxnh3Mf3hRiGIbA/viewform?fbclid=IwAR3iqaVMLsj2LAJjd2MrweUe215aZSpkAJhS1kpJjOeyG7yYivoa-eFFSSk">protest letter</a> drawn up by<a href="https://nteufightback.site/get-involved"> </a><a href="https://nteufightback.site/get-involved">NTEU Fightback</a> calling for the withdrawal of a precedent-setting motion that would gag unionists at Murdoch University. If you’re a unionist, please sign it. 
Thousands of university workers have lost their jobs during the COVID-19 crisis, both because the federal government has refused to provide the same employment subsidies to universities as they did to the private sector, and because vice chancellors have used the opportunity to restructure employment and cut pay and conditions. 
Early in the crisis, the national leadership of the NTEU, in a “Jobs Protection Framework”, shamefully offered wage and conditions reductions to the university bosses, in return for a role in implementing them. In the face of a massive revolt by union members and rejection by some vice chancellors, the framework was dropped.
The rank and file organising centre NTEU Fightback played a crucial role in building opposition to the framework, by providing and distributing detailed arguments against it and formulating an alternative approach to the current crisis. Fightback emphasises the importance of resisting all attacks on university workers now, rather than offering concessions, building membership self-confidence and combativity, so that sustained strike action can be a feature of the campaign over enterprise agreements which expire at key universities in the middle of next year.
But union officials have persisted with their concessionary approach at individual universities. And they hate the fact that there are members speaking out against it.
These are the circumstances in which Murdoch University branch and Western Australian NTEU division officials are attempting to gag activists who are critical of the union’s approach. Local and divisional officials put together a<a href="https://storage.googleapis.com/production-gator-v1-0-6/456/335456/9fFSO2bi/c161857c9be74a7c9c2b4b3b5279692e?fileName=Text%20of%20proposed%20Murdoch%20University%20NTEU%20branch%20%E2%80%9Cprotocols%E2%80%9D.pdf"> </a><a href="https://storage.googleapis.com/production-gator-v1-0-6/456/335456/9fFSO2bi/c161857c9be74a7c9c2b4b3b5279692e?fileName=Text%20of%20proposed%20Murdoch%20University%20NTEU%20branch%20%E2%80%9Cprotocols%E2%80%9D.pdf">motion</a> for the Murdoch NTEU Branch Committee meeting on Monday 9 November, seeking to ban union members from being able to “advocate amongst the membership positions at variance with Union decisions”, or to participate in any public discussion of debates within the union. The motion would allow the Branch Committee to sack delegates who don’t adhere to this policy.
The Murdoch Branch leadership, which failed to organise serious resistance to a massive reduction in conditions in 2018, has taken aim at anyone who might voice criticism of union policy in general and two members of NTEU Fightback in particular. Both are very effective delegates. One is a member of the Branch Committee and a thorn in the side of its old guard. The other initiated and has led the network of casual workers at Murdoch. They have been demonstrating in practice how one of the union’s weakest and most demoralised branches can be rebuilt.
Earlier this year, Murdoch management balloted staff to vary their agreement and take a significant pay cut. The casual Fightback member was instrumental in carrying an argument among casuals to reject the bribe offered by the university to casual and low paid staff in an effort to secure support for the proposed pay cut. She did this while maintaining her criticisms of the union’s overall strategy. The campaign was successful with casual staff part of the 73 percent of total votes cast against the deal. 
The officials were afraid to take their motion to a general meeting of members. Still afraid of their own members, they are now taking the even more undemocratic step of putting it to an email vote of Branch Committee members, because the in-person Branch Committee meeting they put it to was inquorate.
Under this bureaucratic manoeuvre, members of the Branch Committee who have not participated in or even heard the debate, and some who have long been inactive, will be deciding whether or not to gag members they disagree with.
The motion restricting democracy would have stopped Jack Mundey in his tracks. Earlier this year, unionists around Australia celebrated the life of Jack Mundey, one of the leaders of the New South Wales Builders Labourers’ Federation in the early 1970s. The BLF in this period was famous for its<a href="https://facebook.us19.list-manage.com/track/click?u=696ff0032fed15a96d2a3516f&amp;id=6769a396c3&amp;e=546dff7a6b"> </a><a href="https://facebook.us19.list-manage.com/track/click?u=696ff0032fed15a96d2a3516f&amp;id=6769a396c3&amp;e=546dff7a6b">Green Bans</a>: after thorough debate at every level of the union, labourers imposed work bans to preserve green space and working class housing, to defend gay rights and women’s rights, and to support anti-racist and anti-war struggles.
Of course, Mundey’s<a href="https://facebook.us19.list-manage.com/track/click?u=696ff0032fed15a96d2a3516f&amp;id=fcc08e312e&amp;e=546dff7a6b"> </a><a href="https://facebook.us19.list-manage.com/track/click?u=696ff0032fed15a96d2a3516f&amp;id=fcc08e312e&amp;e=546dff7a6b">rise to the leadership</a> of the BLF was not smooth. For years, Mundey and his rank and file team put out a newsletter called The Hoist, which promoted a serious industrial strategy as well as democracy and progressive policies in the union. Mundey’s team used the left press, including the Communist Party newspaper Tribune, to discuss their project and to recruit members to their rank and file group.
None of this would have been possible if they had abided by a ban on “advocating amongst the membership positions at variance with Union decisions”, or a ban on participating in debates in public forums, such as Tribune, about the direction of the union. The fact is that rank and file groups, reform groups, caucuses, and debates in public forums—including rank and file newsletters and left-wing media—have an important place in the history of virtually all unions.
NTEU officials, not only at Murdoch and in Western Australia but also nationally, are adopting the<a href="https://redflag.org.au/article/sda-leadership-lashes-out"> </a><a href="https://redflag.org.au/article/sda-leadership-lashes-out">approach</a> of the Shop, Distributive and Allied union (SDA), among the least democratic and most right wing in the country. The recent National Council of the NTEU adopted motions designed to intimidate critics by condemning “division” (their code for criticism of the leadership’s policies) and condemning “bullying” (their code for criticism of the leadership’s policies) within the union. These motions were supported by arguments that NTEU Fightback was undermining solidarity and potentially bringing the union into disrepute.
The Council also rejected a motion reinstating the practice of allowing delegates to know who the members in their workplaces are. This information, which even the SDA gives its delegates, was denied to NTEU delegates in the course of the debate about the Jobs Protection Framework. For the NTEU’s leadership, avoiding potential criticism came before building an effective union.
NTEU Fightback members of the Council had a different approach. They moved the motion about membership lists for delegates. Watered down by the officials, their motion committing the union to demanding effective paths to continuing jobs for casuals was carried. Their proposal that the union replace its strategy of pre-emptive surrender on job cuts, by offering concessions to university managements, with a<a href="https://storage.googleapis.com/production-gator-v1-0-6/456/335456/9fFSO2bi/a7e85803fa694e5a9e32ecf544e8babb?fileName=fighting%20back.pdf"> </a><a href="https://storage.googleapis.com/production-gator-v1-0-6/456/335456/9fFSO2bi/a7e85803fa694e5a9e32ecf544e8babb?fileName=fighting%20back.pdf">fighting approach</a> was defeated. They supported a motion to devote more resources to organising casuals, which was also voted down.
Union activists committed to building the NTEU and fighting their employers’ offensive know that their success depends on resisting their own officials’ attacks on union democracy too.

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