Revisiting Alleged 30 Million Famine Deaths during China’s Great Leap, Written by Utsa Patnaik, in People's Democracy, (Weekly Organ of the CPI(M), Vol. XXXV No. 26, June 26, 2011

http://bit.ly/jaBMO0


THIRTY years ago, a highly successful vilification campaign was launched against Mao Zedong, saying that a massive famine in which 27 to 30 million people died in China took place during the Great Leap period, 1958 to 1961, which marked the formation of the people’s communes under his leadership. The main basis of this assertion was, first, the population deficit in China during 1958 to 1961 and, second, the work of two North American demographers, A J Coale (Rapid Population Change in China 1952-1982, 1982) and Judith Banister (China’s Changing Population, 1987). No one bothered to look at the highly dubious method through which these demographers had arrived at their apocalyptic figures.



The ‘estimate’ was later widely publicised by Amartya K Sen who built an entire theory, saying that democratic freedom, especially press freedom, in India meant that famine was avoided while its absence in China explains why the world did not know that such a massive famine had taken place until as much as a quarter century later when the North American demographers painstakingly uncovered it.



The capitalist press was happy to reciprocate the compliment by repeatedly writing of “30 million famine deaths,” to the extent that a fiction was established as historical fact in readers’ minds. The London Economist had a special issue on China some years ago, which repeated the allegation of 30 million deaths in three separate articles and refused to publish the Letter to the Editor this author sent contradicting the claim. More recently, in his Introduction to the book Mao Zedong on Practice and Contradiction, which he edited and published in 2006, Slavoj Zizek also mentioned the figure of 30 millions as though it were a given fact. Well known intellectuals have to be taken seriously and the claim examined.



TWO ROUTES

There are two routes through which very large ‘famine deaths’ have been claimed --- firstly, population deficit and, secondly, imputing births and deaths which did not actually take place. Looking at China’s official population data from its 1953 and 1964 censuses, we see that if the rate of population increase up to 1958 had been maintained, the population should have been 27 million higher over the period over 1959-1961 than it actually was. This population deficit is also discussed by the demographers Pravin Visaria and Leela Visaria. The population deficit was widely equated with ‘famine deaths.’ But 18 million of the people alleged to have died in a famine were not born in the first place. The decline in the birth rate from 29 in 1958 to 18 in 1961 is being counted as famine deaths. The Chinese are a highly talented people, but they have not learnt the art of dying without being born.



There is a basic responsibility that everyone, and more particularly academics, has to be clear and precise about. To say or write that “27 million people died in the famine in China” conveys to the reader that people who were actually present and alive, starved to death.  But this did not actually happen and the statement that it did is false.



China had lowered it death rate sharply from 20 to 12 per thousand between 1953 and 1958. (India did not reach the latter level until over a quarter century later.) After the radical land reforms and the formation of rural cooperatives, there were mass campaigns to clean up the environment and do away with disease bearing pests while a basic rural health care system was put in place. That a dramatic reduction in the rural death rate was achieved, is not disputed by anyone. During the early commune formation from 1958, there was a massive mobilisation of peasants for a stupendous construction effort, which completely altered for a few years the normal patterns of peasant family life. Women were drawn into the workforce, communal kitchens were established and children looked after in crèches as most of the able-bodied population moved to irrigation and other work sites during the slack season. We find a graphic description of this period of mass mobilisation in Wiliam Hinton’s Shenfan. When this author spent three weeks in China in 1983, visiting several communes --- which still existed at that time --- she was told every time that “we built our water conservation system during the Great Leap.” The birth rate fall from 1959 had to do with labour mobilisation, and not low nutrition since the 1958 foodgrain output was exceptionally good at 200 million tons (mt).



HOLES IN THE ARGUMENT

There was excess mortality compared to the 1958 level over the next three years, of a much smaller order. Let us be clear on the basic facts about what did happen: there was a run of three years of bad harvests in China --- drought in some parts, floods in others, and pest attacks. Foodgrain output fell from the 1958 good harvest of 200 mt to 170 mt in 1959 and further to 143.5 mt in 1960, with 1961 registering a small recovery to 147 million tons. This was a one-third decline, larger than the one-quarter decline India saw during its mid-1960s drought and food crisis. Grain output drop coincided in time with the formation of the communes, and this lent itself to a fallacious causal link being argued by the academics who were inclined to do so, and they blamed the commune formation for the output decline. One can much more plausibly argue precisely the opposite --- that without the egalitarian distribution that the communes practised, the impact on people of the output decline, which arose for independent reasons and would have taken place anyway, would have been far worse. Further, without the 46,000 reservoirs built with collective labour on the communes up to 1980, the effects of later droughts would have been very severe. Recovery to the 200 million ton level took place only by 1965. Throughout, however, the per capita foodgrain output in China even during the worst year, 1960, remained substantially above that in India.



As output declined from 1959, there was a rise in the officially measured death rate from 12 in 1958 to 14.6 in 1959, followed by a sharp rise in 1960 to 25.4 per thousand, falling the next year to 14.2 and further to 10 in 1962. While, clearly, 1960 was an abnormal year with about 8 million deaths in excess of the 1958 level, note that this peak official ‘famine’ death rate of 25.4 per thousand in China was little different from India’s 24.8 death rate in the same year which was considered quite normal and attracted no criticism. If we take the remarkably low death rate of 12 per thousand that China had achieved by 1958 as the benchmark, and calculate the deaths in excess of this over the period 1959 to 1961, it totals 11.5 million. This is the maximal estimate of possible ‘famine deaths.’ Even this order of excess deaths is puzzling given the egalitarian distribution in China, since its average grain output per head was considerably above India’s level even in the worst year, and India saw no generalised famine in the mid-1960s.   



IDEOLOGICAL BIAS

Relative to China’s population, this figure of plausible excess mortality is low and it did not satisfy the academics in northern universities who have been always strongly opposed to socialised production. Coale’s and Banister’s estimates gave them the ammunition they were looking for to attack the communes. How exactly do Coale and Banister reach a figure of ‘famine deaths’ which is three times higher than the maximal plausible estimate? Examining carefully how they arrived at 30 million ‘famine deaths’ estimate, we find that the figure was manufactured by using indefensible assumptions, and has had no scholarly basis.



In the 1982 census, there was a survey on fertility covering one million persons or a mere 0.1 per cent sample of the population, who were asked about births and deaths from the early 1950s onwards. The very high total fertility rate obtained from this 1982 survey is used by them to say that millions more were actually born between the two census years, 1953 and 1964, than were officially recorded. They ignore the birth rate of 37 per thousand derived from a very much larger 1953 sample which had covered five per cent of all households and was specially designed to collect the information on births and deaths used in the official estimates. Instead, they impute birth rates of 43 to 44 per thousand to the 1950s, using the 1982 survey. There is no justification for such an arbitrary procedure of using a much later reported high fertility rate for a long distant past. We know that a distant recall period makes responses inaccurate. These imputed extra births between 1953 and 1964 total a massive 50 million but according to them did not increase by an iota the 1964 population total, 694.6 million, the official figure which they assume as correct. Thus, although all official birth and death rates are rejected by them, the official population totals are accepted. This opportunistic assumption is clearly necessary for their purpose because it allows them to assert that the same number of extra people died between 1953 and 1964, as the extra people they claim were born.



FALLACIOUS CLAIMS

But the demographers are still not satisfied with the 50 million extra births and deaths that they have conjured up. Fitting a linear time trend to the falling death rate of the early fifties is done to say that deaths should have continued to decline steeply after 1958 and since it did not, the difference from the trend meant additional ‘famine deaths.’ Such straight-line trend fitting is a senseless procedure since the death rate necessarily shows non-linear behaviour. It cannot continue falling at the same steep rate; it has to flatten out and cannot reach zero in any population --- not even the inimitable Chinese people could hope to become immortal. The final estimate of extra deaths in both authors is raised thereby to a massive 60 million, a heroic 65 per cent higher than the official total of deaths over the inter-censal period.



Having created these 60 million extra deaths at their own sweet will out of nothing, the authors then proceed to allocate them over the years 1953 to 1964, arbitrarily attributing a higher portion to the great leap years in particular. The arbitrariness is clear from the variation in their own manipulations of the figures. Coale’s allocation raises his peak death rate in 1960 to 38.8 per thousand while Banister is bolder and raises it to 44.6 compared to the official 25.4 for that year, and 30 million ‘famine deaths’ are claimed over the Great Leap years after all this  smart legerdemain. Having violated every tenet of reason, these ‘academics’ may as well have allocated all their imaginary deaths to the Great Leap years and claimed that 60 million died --- why hang themselves only for a lamb rather than for a sheep! Seldom have we seen basic norms of academic probity and honesty being more blatantly violated, than in this travesty of statistical ‘estimates.’ And seldom have  noted intellectuals, who might have been expected to show more common sense, shown instead more credulous naivete and  irresponsibility, by accepting without investigation and propagating such nonsensical ‘estimates,’ giving them the status of historical fact. In the process, they have libelled and continue to libel Mao Zedong, a great patriot and revolutionary. They have unwittingly confirmed the principle attributed to Goebbels --- that a lie has to be a really big lie and be endlessly repeated; then it is bound to be believed.



Thirty million or three crores is not a small figure. When one million people died in Britain’s colony, Ireland, in 1846-47, the world knew about it. When three million people died in the 1943-44 Bengal famine, the fact that a famine occurred was known. Yet 30 million people are supposed to have died in China without anyone knowing at that time that a famine took place. The reason no one knew about it is simple, for a massive famine did not take place at all. The intellectuals who quote the massive famine deaths figure of 30 million today, are no doubt outstandingly clever in the small, im kleinen, but are proving themselves to be rather foolish im grossen, in the large. A person has to be very foolhardy indeed to say that 30 million people died in a famine without anyone including the foreign diplomats in China and the China-watchers abroad having the slightest inkling of it. And those who credulously believe this claim and uncritically repeat it show an even greater folly than the originators of the claim.                                                
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GREECE: Public Outrage over Austerity Plan, by Bego Astigarraga, IPS, 30 June, 2011

http://bit.ly/k6F32b

ATHENS, Jun 30 (IPS) - The mass protests in Greece swelled by the hour as parliament voted this Thursday to implement the social and economic adjustment plan approved Wednesday, including measures for privatisation, tax hikes, spending cuts and mass lay-offs in the state sector.
The increasingly disappointed and restless crowd continued to demonstrate in the streets of Athens against the new Medium Term Fiscal Strategy 2012-2015, that will seriously affect middle- and low-income families and was approved at the insistence of the European Union and the International Monetary Fund (IMF).

A prime target of the protestors' wrath is German Chancellor Angela Merkel. "She is to blame for handing Greece over to the speculators," said Nikiforos, one of the thousands of demonstrators gathered in front of the parliament building in Syntagma Square. "We must carry on demonstrating and organise a united social movement in Europe."

Konstantine, a physics student at the University of Athens, said: "The situation for workers is tragic, as they are on the edge of levels of genuine poverty." "University matriculation used to be free, but it now costs 800 euros (1,161 dollars). Schools are being closed, and public transport fares have risen by 40 percent," she told IPS.

For his part, Alexander, a psychologist and teacher of children with disabilities who belongs to the Front of the Anti-Capitalist Left (ANTARSYA), told IPS the government "wants to sell the country out to the IMF in order to save the bankers.

"Do they want to strangle us even more? We won't let them," he said.

In spite of the pressure exerted by a two-day general strike, the crowds of demonstrators surrounding parliament and the clashes with police that have left dozens of people injured, parliament narrowly passed the new adjustment plan Wednesday, with 155 votes in favour, 138 against and five abstentions. Only one lawmaker of the rightwing opposition New Democracy party voted with the governing Panhellenic Socialist Movement (PASOK).

Panayotis Kurublis, the sole socialist lawmaker who voted against the austerity programme, was immediately expelled from the party, further narrowing the government's parliamentary majority.

Kurublis and the opposition appear to agree with over 80 percent of Greeks who in various polls rejected the stringent austerity plan and said they were totally against "selling their country at the diktats" of the so-called "troika" of the EU, the European Central Bank and the IMF.

Following the approval of the plan, a condition laid down by the troika for proceeding with the second phase of a financial bailout, the government of Prime Minister George Papandreou will have to implement a vast privatisation programme this year.

"We must prevent the country's collapse at all costs," said Papandreou ahead of the parliamentary vote. The passage of the austerity plan freed up the payment of the next tranche of 17 billion dollars out of a bailout loan totalling 157 billion dollars that was approved in May 2010 by the EU and IMF.

Experts say Greece's debt, the highest in the EU, will grow to 166 percent of GDP by 2012.

The new austerity package - the second since March 2010 - aims to make savings of some 28.4 billion euros (over 40 billion dollars) between 2012 and 2015 from tax hikes and public spending cuts. The government's target is to reduce the deficit to below three percent of GDP in 2015.

An estimated 45 billion euros (65.3 billion dollars) of revenue during the same period is expected from the total or partial sale of dozens of public enterprises, such as state-owned refineries, power stations, ATEbank (a largely agricultural bank), as well as management concessions for airports, highways and ports, mining rights, real estate and land.

A "solidarity tax" has been introduced which will be a one-off levy of one to five percent of personal incomes, with the highest rates being applied to the highest income brackets. The minimum taxable income threshold will be lowered, although earnings of workers under 30 and pensioners' incomes will remain tax-free.

Value added tax in bars and restaurants will be raised from 13 to 23 percent.

Despite the draconian nature of the austerity plan, international analysts are sceptical of the results it will bring for the country, which is on the brink of default. Meanwhile, popular discontent is growing and further unrest is feared.

The two-day general strike, in which all the unions joined with a very high participation rate, was a clear sign that Greek citizens are not prepared to accept more spending cuts and higher taxes.

The last straw could be the decision to eliminate 150,000 of the current 700,000 public employee posts. The government intends not to renew the contracts of temporary workers, tantamount to dismissal, and to replace only one in 10 public officials who retire.

Communist Party Israel condemns repression in Syria while opposing imperialist interference, by Uri Weltmann , Sunday, June 19 2011

http://bit.ly/iBT4Ev


CPI never backed oppression: Response to Yossi Gurvitz

This weekend, Yossi Gurvitz accused former MK Muhammad Naffa, secretary-general of the Communist Party of Israel of backing the suppression of the Syrian uprising. Uri Weltmann, a member of the Communist Party of Israel, denies these allegations and clarifies the party position below. Yossi Gurvitz replies to Uri Weltmann, here.



Reading Yossi Gurvitz’s article, which aims to “expose” the position of the Communist Party of Israel (CPI) on the developments in Syria, one is attacked by an eerie feeling of déjà vu. Suddenly, we are thrown back to the old days of the Cold War era, where facts need not stand in the way of finger pointing, and a truthful account of events is just a distraction from the fanning of anti-Communist hysteria.

The title of Gurvitz’s article – “Israeli Communist Party supports Bashar Assad (but only in Arabic)” – is doubly false: First, because the position of the CPI is not one of support for Assad, nor of support towards the criminal ways in which the Syrian army is treating the protesters; Second, because the sinister allegation that the views expressed in the Arabic press of the Party, are somehow different from the views expressed in the Hebrew press of the Party, is an old re-hash of an old lie.

Gurvtiz bases all of its claims on one blog post, by the former-Communist Joseph Algazy, which contains numerous slanders, half-truths and plain falsehoods. Gurvitz – who doesn’t read Arabic – took these claims to be true, without ever bothering to check them against facts. He is not the only Israeli Left blogger who has re-posted the slanderous piece by Algazy, but he has done so with the most enthusiasm, adding his own attacks on the principle of Jewish-Arab partnership inside the CPI (which he refers to as “a facade”).

Normally, one would not bother to write a response to such a piece. But the fact that more than one reader was fooled by the fallacies which Gurvitz, Algazy and co. peddle, demands that the record be set straight.

What exactly is the position of the CPI towards the protests in Syria?

On March 24th, shortly after the Syrian protests became a widespread mass phenomena, the Political Bureau of the CPI met, and published the following statement:

The Political Bureau emphasizes its complete rejection of the way in which the Syrian regime had chosen to act, and denounces its crimes towards the protesters, especially in Daraa, which has caused the injury and deaths of many protesters. The Syrian regime, which is threatened by US Imperialism and Israel, must meet the just demands of the protesters for freedom, democracy, a dignified life, and against corruption and emergency laws.

Contrary to the outrageous claims made by Gurvitz against the CPI, this statement – indeed, like all Party statements – was published in Hebrew, as well as in Arabic.

This position was repeated time and again in the Party press. One recent example, published last week, would be the article in “Zo Haderech” by Tamar Gozansky (Member of the Political Bureau, and former member of Knesset), who not only condemned the killing of protesters, but also warned against the danger of imperialist intervention.

This twofold position – of condemning the killings, while warning against the plans of imperialism – was repeated in the article in “Al-Ittihad” by Faten Ghattas, (Chairperson of the Party’s Central Control Commission).

In the blog post of Algazy, which was re-posted by Gurvitz, Muhammad Naffa, Secretary General of the CPI, is accused of supporting Bashar Assad. Gurvitz – following Algazy – had no misgivings about journalistic norms, when he goes on to plainly state, without a shred of proof, that Naffa had “denounced the [Syrian] uprising”. But while Algazy quotes extensively from those who criticize an article published by Naffa in “Al-Ittihad”, he doesn’t quote a single word from what Naffa had actually said. Why is that? And why hadn’t he provided a link to that article, so that the readers could judge for themselves?

In the above-mentioned article, Naffa says: “We support that the brave Syrian people will receive all of their rights, and we oppose the corruption, the State Security courts, the arbitrary arrests, the emergency laws, and the attacks on the freedom of expression, and other freedoms.” Quite a “denunciation”, isn’t it?

Naffa goes on to warn against the danger of imperialist intervention (like the Political Bureau did in its March statement, and like Gozansky and Ghattas did in their last week articles), but neither “support for Bashar Assad”, nor “denunciation of the Syrian uprising”, are anywhere to be found.

The same views by Naffa can be found in an interview, published in Saturday on the website of the CPI, and in Sunday’s issue of “Al-Ittihad.”

Algazy continued to practice “creative journalism” when he quoted a sentence, taken from a statement by a meeting of Communist Parties in Europe, which calls on Communist Parties “to express their support for Syria in the face of the imperialist plots”. This part of the statement has received criticism from some Arab thinkers, whose objections to this wording are quoted in detail by Algazy. But never once did he mention that the CPI did not actually participate in that meeting of Parties, nor was it a signatory of that statement – although he knowingly lends his readers to believe that is the case.

Why did the principled position taken by the CPI arouse so much anger among various “Left” bloggers in Israel?

Unlike some liberals on the Left, who give unconditional support to the protesters, regardless of their demands, the CPI has refused to take imperialism out of the equation. It would be plain ignorance to claim that US imperialism is indifferent towards the developments in Syria, or that it doesn’t have an interest in having a specific political line to become dominant among the protesters. Therefore, any analysis of the developments in Syria has to start by taking them in context. Not every demand by the protesters has to be automatically supported, but things have to be weighed objectively.

On the other side, contrary to some would-be “anti-imperialists”, who play the erroneous game of “my enemy’s enemy is my friend”, the CPI had consistently pressed for the demands of the Syrian people for democracy, freedom and social justice to be met. The Party had been quite clear that arbitrary use of power, and killing of innocent and peaceful protesters, is something that we unequivocally condemn.

Is ours a complicated position? Indeed, and rightly so. One cannot provide a simple solution to a complicated situation. Those on the Left who would try to do so, will necessarily find themselves either siding with a repressive and corrupt government, or with an occupying imperialist power.

The CPI’s position might prove to be unpopular – both to those who ignore imperialism, as well as to the apologists of the repressive Syrian government – but it is a principled stand. For more than 90 years, the Communists in this country, Jews and Arabs alike, held on to their principles, even at times when doing so was difficult, or even life-risking. We are greatly proud of that. And we will continue to do so.

Uri Weltmann is a member of the Communist Party of Israel (CPI), and member of the National Secretariat of the Democratic Front for Peace and Equality (Hadash). He works as a high school Mathematics teacher, and is currently studying towards his Masters degree in Philosophy of Science, at Haifa University.

THE CLC: A TALE OF TWO CONVENTIONS: By Sam Hammond, Vancouver, June 1-15, 2011, issue of People's Voice

http://www.peoplesvoice.ca/Pv01jn11.html#ATHECLC

For the 26th time since its founding, the Canadian Labour Congress met in Convention May 9-13 in Vancouver, BC. President Ken Georgetti welcomed the 2500 delegates with a speech that probably won't be remembered for more than a few days, if at all. The speech did not reflect the anger and anguish the people are going through across Canada, or the dangerous reality of a new Harper majority in Ottawa. That reality had to come from the floor, and it did several times during the week.
     The structural changes that will effectively reshape the CLC into a consensus of the largest private and public sector union leaders were adopted as expected, with only mild squirming from the Labour Councils which are left out of the new structure completely.

     Ken Georgetti managed the microphones with clumsy prejudice. Early in the convention he twice cut off Dave Pritchett from the Longshore Union, while CAW leader Ken Lewenza to go four minutes beyond the speaking time. On Tuesday morning, Georgetti apologized for his sins the day before, but throughout the week he continued giving speakers at pro mikes preference over speakers at con mikes. The chairing became quite a topic of discussion in the food courts and even in some of the caucuses. Many new affiliates and first‑time delegates were particularly upset.

     More than at any other CLC convention, the several hundred resolutions sent in were grouped into watered down composites and squeezed into debate times that were severely compressed by a line‑up of guest speakers, cultural presentations and discussion panels. Some of the delegates who took part in the Action Caucus estimated that in the week‑long convention, only about nine hours were allotted to floor debate on resolutions.

     One of the guest speakers was Jack Layton, who understandably was on a high over the NDP election success, and of course received a resounding welcome from the delegates.

     The Action Caucus had its first meeting on May 8, before most delegates had not arrived. Regular daily meetings of the Caucus began in earnest the next day. The main thrust of the Action Caucus was to get adoption of an "Action Plan to Resist the Harper Agenda". A petition to get the Action Plan on the floor was signed by over 500 delegates, the most effective work done at the convention. Although the Action Plan did not make it to the floor, it was in tune with the feelings of the majority of delegates. Much of it was incorporated by the executive into "Good Jobs, Better Lives: A Workers Program to Defeat the Right‑Wing Agenda," an action resolution which was passed and is now policy.

     Because of the behind the scenes work of the Action Caucus, the language of the "Good Jobs, Better Lives" resolution is militant and emphasizes the need to support unions in struggle and under attack such as CUPW and PSAC, to promote "public demonstrations" and "direct action where necessary to defeat the right‑wing agenda".

     The resolution states, "We will work with affiliates, federations and labour councils to build a strong progressive workers movement to counter the right‑wing corporate agenda in this country. This will include engaging in member‑to‑member campaigns, public outreach and direct action..."

     It also states, "At the 27th Constitutional Convention in 2014, the CLC will bring forward a political plan to defeat the Conservative government and to elect a federal New Democratic Party government." This is a much different posture than two conventions back when Gilles Duceppe and Jack Layton got equal billing.

     The members of the Action Caucus brought militancy to the mikes, reflected the urgency of delegates who want a stronger fightback, and built respect and prestige for the left, for the ideology of struggle against capital and unity of working people.

     In the words of one member of the Action Caucus, "It was as if there were two conventions going on at the same time that did not connect."

     This is an accurate observation. The thrust from the top is to prepare conditions for the election of an NDP majority in 2015. The thrust from the left is to fight every day over the next four years, to prevent the Tories from implementing their pro‑corporate, pro‑war, pro‑imperialist agenda.

     The youth, the homeless, the disenchanted, the unemployed and the abandoned, our entire working class, cannot wait for social democratic salvation in 2015. Thanks to the Action Caucus and the militant delegates the "Good Jobs, Better Lives" resolution gives equal billing to both agendas. It has the potential for unity and resistance.

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(The above article is from the June 1-15, 2011, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)

Crisis of Capitalism: Act II Written by Zoltan Zigedy, Marxism-Leninism Today

When, in the last few weeks, insiders and economists like Jeffrey Sachs and David Stockman – not noted for their radical postures – decry the state of the economy and the direction of policies, all of us should take note. Sachs, one of the fathers of neo-liberal "shock therapy," recently cited decades-long stagnant wages and obscene levels of inequality: "We've reached the greatest income [and] wealth inequality in history... This is a new 'Robber Baron' era, of course." He went on to say "...the people at the top buy the politicians... All of them – all parties. Everyone is in the hands of the super wealthy." (Interviewed by Aaron Task, Tech Ticker, Yahoo! Finance). In a similar vein, David Stockman, former director of the Office of Management and Budget under the Reagan Presidency, ripped the "crony capitalism" that has changed "capital markets into a rip-roaring casino that really is not productive for the real main street economy and is generating windfall gains for a very limited number of people to no good purpose..." He sees ordinary folks trying to save in this environment as "savaged" by Federal Reserve and government policies. (Interviewed by Peter Gorenstein, Daily Ticker, Yahoo! Finance) These gloomy, critical views stand in stark contrast to the generally up-beat, optimistic reports and forecasts that usually flow from policy makers and dominate the media today. For the experts and pundits, the crisis has passed and we are on the way – though, they concede, tentatively – to recovery. In truth, our modern-day Pollyannas mistake the first act for the entire play. While our economy may not be on the edge of a precipice, the problems that placed the world economy near collapse have only been displaced, pushed forward or swept aside. Even an arch-advocate of capitalism such as Vincent Reinhard, senior fellow at the conservative American Enterprise Institute, understands this: "After a severe financial crisis, we [tend to] get a severe recession, slower recovery and subpar expansion... Denial is a standard feature of financial crises..." (Interviewed by Stacy Curtin, Daily Ticker, Yahoo! Finance). A closer look at the economy – an up-to-date report card from a Marxist perspective – is surely in order. Gross Domestic Product The broadest conventional measure of national and international economic performance remains GDP growth. Laden with the assumptions fundamental to the continued functioning of the capitalist economic engine, it valorizes all that is considered important to the ownership class and its continued accumulation of capital. Conversely, if an enormous human asset, such as the addition of one year of life span, were added to every person in the US, that value would not show up in the annual GDP figures except insofar as it generated commercial economic activity. Yet, as biased as the GDP growth figures are, their trend does reflect something real – the prospect of capitalism's sustainability. The first quarter figures for 2011 show a tepid US annual GDP growth of 1.8% from January through March. Pundits posture this as an aberration, a momentary stumble; but the trend line from the last quarter of 2009 is decidedly downward, in step with the drying up of stimulus funds. Nonresidential fixed investment has followed the same downward trajectory since its highpoint in the second quarter of 2010, even with spending on equipment and software leaping 11.6% this past quarter. Likewise, export growth rates — touted by the experts as a leading force of recovery — show the same downward trend from the level reached in the last quarter of 2009. Despite the Federal Reserve's shrinking-dollar policy to sustain the rate of export growth, it is now falling below earlier levels of growth. Given that refined oil-based products account for the second largest component of export value and that the dollar value of these exports is highly inflated by the rising cost of oil, export growth calculated in dollars is exaggerated in the official numbers. Further suggestive of foul weather ahead, the February GDP report for Canada – the US's leading export destination by far – demonstrated an actual decline of .2%. It is hard to imagine robust export growth ahead, with a stagnant Canadian economy. The growth rate of government spending – the sole factor preventing the economy from falling over the cliff at the height of the crisis – is now in negative territory and falling rapidly. The debt hysteria gripping local, state and federal officials produced budget cuts that are only now beginning to affect the GDP and other key economic indicators. Their influence on key factors – employment, incomes, consumer spending, etc. – will be felt more dramatically and negatively in the months and years to come. Consumer spending continues its modest growth from its decline in the depths of the crisis. Its sustainability is in question, however, given that wages failed to keep up with inflation in the first quarter of 2011. This suggests that consumer debt and shrinking savings will again be the source of consumption growth, a condition ominously reminiscent of the pre-crisis period. Internationally, GDP growth shows the same downward trend in nearly all the developed capitalist world, particularly the European Union. For those countries that have surrendered their sovereignty to the International Monetary Fund and the European Union – Greece, Ireland, and Portugal – the decline is far more dramatic. In the case of Greece, compliance with the austerity hawks has been catastrophic, with four successive quarters of losses greater than an annualized rate of 5%. The People's Republic of China and many emerging markets, on the other hand, have sustained high growth rates for diverse reasons, ranging from rational planning to irrational investment bubbles. Profits, Productivity and Employment Profit growth in the US – the fuel for a capitalist economy – has sprung back sharply from its nadir in the last quarter of 2008. Accelerating rapidly from that point, growth has stabilized over the last year at a rate commensurate with the pre-crisis period. Pundits hail the growth of profits in the manufacturing sector, a factor that has now reached about 90% of its pre-crisis level of production. But they fail to ask how profit growth can be so strong with less production and capacity utilization well below pre-crisis levels.   The answer lies in a sharp increase in the rate of labor exploitation, expressed as intensified labor productivity. Labor productivity drove the explosion of profits after the 2008 collapse, settling at a level above historic averages. Put bluntly, the restoration of profitability came at the expense of an increasingly sweated, shrunken workforce. Two factors opened the door to profit restoration: a weak, class-collaborationist labor movement, unwilling to confront capital, and the high rate of unemployment sowing fear throughout the workforce – what Marx called "the reserve army of labor." With little organized fight for a larger share of the surplus and generalized fear of job loss among the working class, intensified exploitation was readily available to the capitalist class. Nonetheless, the trend in labor productivity, like the trend in profitability, is downward, suggesting strongly that the crisis has failed to wring from the economy the long-term tendency for the rate of profit to decline–the theoretical basis for the Marxist theory of crisis. With private sector labor productivity losing momentum, capital has turned to the service sector, primarily public goods and services, as a target for countering slowing profitability and surplus accumulation. The current attack on public employees' rights, wages, salaries and benefits marks this tactical shift. With weak unions, disunity and nearly non-existent class consciousness, the private labor market is virtually elastic – capitalism can dictate the terms and conditions of labor. State-monopoly capital cannot tolerate a relatively inelastic public sector labor market with high union density, firm contracts and stable standards of living alongside a nearly enslaved private sector. Hence, it has launched an all-out assault on public sector workers, organized by capital's minions in both political parties. While they cannot outsource police, firemen, and other face-to-face employees, they can break their unions. Of course, this initiative is done under the transparent ruse of debt reduction. Another alarming sign emerging from the profit picture is the return of financials as the leading force in US profit growth. While non-financial profits lost steam at the end of 2010, profits from the financial sector jumped dramatically. By the end of 2010, financial profits achieved the same percentage of total domestic profits as they did in 2005. Clearly, speculation and financial maneuvers have ominously returned to the main stage in the US economy. For example, hedge funds have been increasing their CDS bets against Japanese debt, doubling the notional value of swaps made over the last year. Millions were made with the recent natural disaster and nuclear crisis. Debt speculation is an active agent in amplifying the volatility of European debt. While supporters and critics of Administration policies wring their hands over the persistently high rate of unemployment, massive layoffs — reducing the labor force dramatically faster than economic activity – was the key factor in restoring profitability and increasing asset value as expressed by equity markets. It would be naïve not to see unemployment as a capitalist tool of capitalist recovery, a tool that the ownership class is reluctant to surrender. Much has been made of recent drops in the official monthly unemployment rates. Critics are quick to correctly note that these declines also reflect people who have left the workforce, people who are "discouraged" and statistically disappeared. Perhaps a more realistic measure of the employment consequences of the crisis comes from examining the employment-to-population ratios and the labor participation rates compiled by the Bureau of Labor Statistics. The ratio of US employed to the total population has lost 4.5 points from its pre-crisis peak – a workforce loss of 13 to 14 million workers. When we add back those displaced but receiving unemployment compensation, we find a loss of 1.9 points in the labor participation rate, revealing 5 to 6 million workers officially disappeared – left without jobs or unemployment benefits. For these casualties of the crisis, savings, family support, food banks, social security, meager government aid, or the street are their only means of support. Unlike the politically biased official unemployment rates that obscure as much as they reveal, these grim BLS calculations offer little to celebrate. Nor does the future of US employment appear bright. Over the last decade, US based multi-national corporations have added over two million jobs overseas while eliminating nearly 3 million here, a trend that will likely continue. Running on Empty Since the depths of the crisis over two and a half years ago, US policy makers have sought to stabilize and revive the critically wounded capitalist system. First, they offered a transfusion to the financial sector by injecting trillions of publicly obligated dollars into its lifeless body. Secondly, federal authorities cut away the gangrenous tissue infected by financial speculation – over a trillion dollars' worth of fetid securities — and placed it in the vaults of the Federal Reserve and Treasury, where it rests to this day. Thirdly, lawmakers agreed to an $800 billion stimulus package meant to restart the economy's feeble heartbeat. After all these treatments, the economy remains in critical condition. In mid-2010, the Federal Reserve recognized that these efforts to resuscitate a sickly economy were failing. Despite offering financial institutions and corporations virtually cost-free loans, the economy continued to respond sluggishly. The authorities acknowledged that the huge accumulated federal debt would eventually require higher interest rates to entice purchases of treasury securities to offset that debt. They understood that higher interest rates to secure the purchase of government debt would rebound through our financial institutions, driving all interest rates up and slowing borrowing. With lending drying up, they anticipated that the economy would slow down. Thus, they sought to backstop this potential setback to recovery by embarking on a massive purchase of US treasury securities to maintain extremely low interest rates and ease any barriers to borrowers – essentially a rearguard action dubbed Quantitative Easing II. As with the gangrenous financial securities, they purchased nearly $600 billion in government debt and locked it in the Federal Reserve vault, where it joins the garbage accumulated in the speculative frenzy that gave birth to the crisis. They hope to determine what they will do with it and the other "assets" at a later date. Like most of the moves that flow from economic theories corrupted by wishful thinking and iron-clad confidence in capitalism, the Federal Reserve strategy produced consequences undesired. The huge infusion of dollars to purchase treasury securities cheapened the value of the dollar against other currencies. Imports, which outstrip the value of our exports to other countries, grew more costly to the US consumer; and inflation raised its ugly head, chewing away the living standards of working people. Further, many commodities, like oil, are traded internationally in dollars. With the value of dollars declining, pressure drove suppliers to raise prices to offset the falling buying power of the dollar, creating more inflationary pressure internationally. Moreover, rising interest rates in several countries inflated their currencies against the dollar as well, further affecting the costs of imported goods. These inflationary forces amplify the costs of other products, feeding an inflationary spiral. Despite unfounded optimism purveyed by the authorities and the media, inflation poses a serious threat to the economy and, especially, working class living standards. Those elements of the Consumer Price Index most relevant to working and poor people – fuel, health care, food, childcare, school fees, rent, etc – are those showing the most dramatic increase. In addition, Federal Reserve policies failed in their mission. Though the cost of funding the US government debt is relatively stable, the cost of borrowing in the consumer arena continues to grow. Interest rates on mortgages, student loans, auto loans, etc. are on the rise. Again, QE II offered little relief to working people. Prospects Rather than a recovery, we are in Act II of a severe crisis of capitalism. It is not merely a financial crisis, a severe business-cycle trough or a radical imbalance, but a profound crisis of the capitalist system. Yes, there are imbalances, especially in the global economy. However, they are the effects and not the causes of this deep crisis. The advanced economies are scrambling to find solutions – individually – to the intractable problems of stagnation or decline, inflation, debt, intensified competition and failing economic institutions. These problems have fostered equally intractable political crises. Economic blocs, like the European Union, are under great stress from the diverse interests of the member states. The emerging economies, on the other hand, are super-heated and threatened by the influx of speculative capital boiling over into severe eruptions of inflation and over-production. As I argued some years ago, early in the crisis, the ephemeral era of capitalist cooperation – once called "globalization" – is over. Nation-states are going it alone, trying to find solutions to their immediate life-and-death issues, often at the expense of their global "partners." Where they do find areas of limited cooperation, for example, in the aggression against Libya, their differences surface as well. Years from now, when sober heads look back on the global crisis, they will recognize that the stability of thye People's Republic of China, with its publicly owned banks and rational planning, did more to save the global economy from the brink than all of the bankrupt policy antics of the major capitalist powers. But there are more acts to come before the global capitalist economy finds firm ground. What is missing from the maelstrom is for the working classes of all nations to move to center stage and demand solutions benefiting the vast majority. The Economist magazine, the voice of free markets since Marx's time, reports that confidence in free markets has sunk by 21 percentage points internationally since 2002. Similarly, the Gallop Poll shows the confidence in banks and Congress is now at an all time low in the US. Only 23% of respondents have "a great deal of" or "a lot of" confidence in banks. The Congress scores even lower: a meager 11% share "a great deal of" or "a lot of" confidence in the US legislative branch. The crisis opens great opportunity to shape the world in a new direction, a direction that would not merely tame capitalism, but remove its destructive forces forever.

Ethnic cleansing of Palestinians, or, democratic Israel at work, By Gideon Levy, Haaretz,12.05.11

While we are still desperately concealing, denying and repressing our major ethnic cleansing of 1948 - over 600,000 refugees, some who fled for fear of the Israel Defense Forces and its predecessors, some who were expelled by force - it turns out that 1948 never ended, that its spirit is still with us. 

http://www.haaretz.com/print-edition/opinion/ethnic-cleansing-of-palestinians-or-democratic-israel-at-work-1.361196
It happened on the day after Independence Day, when Israel was immersed in praise of itself and its democracy almost ad nauseam, and on the eve of (virtually outlawed ) Nakba Day, when the Palestinian people mark the "catastrophe" - the anniversary of the creation of Israel. My colleague Akiva Eldar published what we have always known but for which we lacked the shocking figures he revealed: By the time of the Oslo Accords, Israel had revoked the residency of 140,000 Palestinians from the West Bank. In other words, 14 percent of West Bank residents who dared to go abroad had their right to return to Israel and live here denied forever. In other words, they were expelled from their land and their homes. In other words: ethnic cleansing.

While we are still desperately concealing, denying and repressing our major ethnic cleansing of 1948 - over 600,000 refugees, some who fled for fear of the Israel Defense Forces and its predecessors, some who were expelled by force - it turns out that 1948 never ended, that its spirit is still with us. Also with us is the goal of trying to cleanse this land of its Arab inhabitants as much as possible, and even a bit more. After all, that's the most covert and desired solution: the Land of Israel for the Jews, for them alone. A few people dared to say it outright - Rabbi Meir Kahane, Minister Rehavam Ze'evi and their disciples, who deserve a certain amount of praise for their integrity. Many aspire to do the same thing without admitting it.
The revelation of the policy of denying residency has proved that this secret dream is in effect the establishment's secret dream. There one doesn't talk about transfer, heaven forfend; nobody would think of calling it cleansing. They don't load Arabs onto trucks as they once did, including after the Six-Day War, and they don't shoot at them to chase them away - all politically incorrect methods in the new world. But in effect that's the goal.
Some people think it's enough if we make the lives of the Palestinians in the territories miserable to get them to leave, and many have in fact left. An Israeli success: According to the Civil Administration, about a quarter of a million Palestinians voluntarily left the West Bank in the bloody years 2000-2007. But that's not enough, so various and sundry administrative means were added to make the dream come true.
Anyone who says "it's not apartheid" is invited to reply: Why is an Israeli allowed to leave his country for the rest of his life, and nobody suggests that his citizenship be revoked, while a Palestinian, a native son, is not allowed to do so? Why is an Israeli allowed to marry a foreigner and receive a residency permit for her, while a Palestinian is not allowed to marry his former neighbor who lives in Jordan? Isn't that apartheid? Over the years I have documented endless pitiful tragedies of families that were torn apart, whose sons and daughters were not permitted to live in the West Bank or Gaza due to draconian rules - for Palestinians only.
Take Dalal Rasras, for example, a toddler with cerebral palsy from Beit Omar, who was recently separated from her mother for months only because her mother was born in Rafah. Only after her case was publicized did Israel let the mother return to her daughter "beyond the letter of the law" - the cruel letter of the law that does not permit residents of Gaza to live in the West Bank, even if they have made their homes there.
The cry of the dispossessed has now been translated into numbers: 140,000, only until the Oslo Accords. Students who went to study at foreign universities, businessmen who tried their luck abroad, scientists who went abroad for professional training, native Jerusalemites who dared to move to the West Bank temporarily - they all met the same fate. All of them were taken by the wind and expelled by Israel. They couldn't return.
Most amazing of all is the reaction of those responsible for the policy of ethnic cleansing. They didn't know. Maj. Gen. (res. ) Danny Rothschild, formerly the chief military governor with the euphemistic title "coordinator of government activities in the territories," said he heard about the procedure for the first time from Haaretz. It turns out that not only is the cleansing continuing, so is the denial. Every Palestinian child knows, and only the general doesn't. Even today there are still 130,000 Palestinians registered as "NLR," a heartwarming IDF acronym for "no longer a resident," as though voluntarily, another euphemism for "expelled." And the general who is considered relatively enlightened was unaware.
This is an absolute refusal to allow the return of the refugees - something that would "destroy the State of Israel." It's also an absolute refusal to allow the return of the people recently expelled. By next Independence Day we'll probably invent more expulsion regulations, and on the next holiday we'll talk about "the only democracy."

This story is by:
• Gideon Levy

Osama bin Laden is dead – but US imperialism’s worldwide war lives on, By the Communist Party of India (Marxist-Leninist) Liberation

The following article is the editorial for the upcoming edition of ML Update. It is posted at Links International Journal of Socialist Renewal.

* * *

http://links.org.au/node/2298

May 7, 2011 -- The US has proclaimed its success in its decade-long hunt for Osama bin Laden, culminating in the killing of bin Laden by US military operatives in a house in Abbotabad in Pakistan. As the televised triumphalism and images of hyper-nationalist celebrations in the US fade, however, Washington's heroic narrative is being subjected to uncomfortable questions.     

Ironically, Osama bin Laden’s death has come, not in the wake of 9/11 when he was at the peak of his strength, but at a time when bin Laden and his al Qaeda were effectively sidelined in an Arab world that is witnessing a democratic awakening and upsurge. This fact too robs the US narrative of some of its sheen.

The US itself has put forward conflicting versions of the night-time raid by its military team. The initial US claim of an intense firefight has now been discarded, with the US admitting that in fact, only one man opened fire on the US operatives. The claim that bin Laden himself opened fire too has been withdrawn, and the US has admitted that he was in fact unarmed. Osama bin Laden’s killing is said to have been witnessed by his 12-year-old daughter. Apart from Osama and his son (whose bodies were speedily disposed off in the sea), at least three other men and one woman were killed, while many have been injured.

Why was it necessary to kill an unarmed Osama bin Laden rather than arrest him and bring him to justice? Why has his body been hurriedly disposed off in a way designed to prevent the possibility of any closer scrutiny of the manner and circumstances of his death? The US has yet to answer these questions convincingly. Moreover, an armed attack on a sleeping household including several children, the killing of an unarmed terrorist in the presence of his child, and the killing of other unarmed men and a woman – these are not the stuff of a heroic encounter with a dreaded terrorist.

US President Barack Obama has claimed the killing of bin Laden to be the crowning achievement in the war on terror. Some have even tried to glorify it with comparisons to the end of Hitler and the defeat of fascism. Such inflated claims are quite baseless. The end of Hitler did mark the end of WWII and a world historic defeat and decline of fascism. The killing of Osama bin Laden, in contrast, spells neither the end of terrorism as a phenomenon nor the end of the US imperialist "war on terror".

By-product of anti-Sovietism

Osama bin Laden and the al Qaeda are known to be the most dangerous by-products of the anti-Soviet strategy pursued by the US in the 1980s using the popular resentment in Afghanistan and the Islamic world against the Soviet intervention in Afghanistan. Modern-day terrorism is largely a US strategy that has backfired, and this cannot be contained or ended by the end of Osama bin Laden. Rather, continuing US occupations in Iraq and Afghanistan, and wars on Libya are likely to keep spawning more terrorism.  

The most immediate political effect achieved by the Osama killing is the sharp rise in popularity ratings of Obama, who is soon to face elections. The Osama coup has effectively taken the wind out of the sails of the aggressive Republican/Tea Party campaign that had been gathering momentum in the backdrop of growing unemployment and continuing economic crisis in the US and the huge politico-economic costs of the US misadventure in Iraq and Afghanistan. Now, Obama’s claim to have avenged 9/11 may well outweigh the propaganda of his rivals.    

There are indications that the despotic Saudi rulers, threatened by the Arab uprising and seeking a convergence of Arab ruling interests and those of US imperialism and Obama in particular, helped deliver Osama to the US.

Pakistan’s military establishment is facing tough questions within its own country about how much it knew and concealed of Osama bin Laden’s hideout, which was a stone’s throw away from a military academy. The Raymond Davis episode, Wikileaks revelations of Pakistan’s rulers’ doublespeak on US drone attacks, and now the Osama episode, have created some ferment in Pakistani society about the nexus between the Pakistan ruling class, the military establishment, terrorism and US imperialism.

The Pakistan rulers and military as well as the US are wary of possible reverberations of the "Arab spring" in Pakistan. Whether Pakistan will indeed witness some version of an "Arab spring" remains to be seen, but it must be stressed that only a democratic and anti-imperialist awakening of the people can be an effective answer to both imperialism and terrorism (which, after all, is nothing but an imperialist ploy gone berserk).

India

In India, we are witnessing some hawkish clamour to use the US Osama operation as a precedent for unilateral action to hunt down the masterminds of 26/11 [the November 26, 2008, Mumbai terrorist attack] inside Pakistan. The Indian army and air force chiefs have indulged in irresponsible statements about India’s preparedness for a similar operation against terrorists in Pakistan. Instead of indulging in such misplaced jingoism, India should re-examine its own relationship with the US in the light of the US treatment of Pakistan.

The Osama operation, like the Raymond Davis episode, has underscored the sheer contempt the US has for the sovereignty and independence of its so-called allies and partners. All US "partners", including new members of the club like India, should be warned. Terrorism and imperialism pose similar threats to both Pakistan and India. With the increased US presence in South Asia, with its accompanying spiral of terrorism, people of both countries need to recognise the need to come closer to tackle these twin challenges of terrorism and imperialism effectively.