Synogenes.com

The good times may have returned for London bankers, or so says the BBC website. But that is little comfort for those people facing massive cuts in public spending. While they see their services being cut, jobs being lost, and their pay packets shrinking, the very people whose actions brought about the financial crash have apparently been forgiven.

£7 billion are to be paid out in bonuses in the UK this year and we are expected to be pleased that it is less than the £11 billion paid out in 2007. Of course, the bonuses like any other income is taxed but we are expected to excuse the obscene amount simply on the grounds that the government collects the taxes. Everyone pays income tax - it is not an act of generosity that the bankers are paying it on their bonuses.

But we have to remember what caused the financial crisis. Financial capital gravitated towards the trade in securities and derivatives, particularly the selling on of mortgage debt in packages called CDOs, Collateralised Debt Obligations, in order to get higher profits. Speculators bought these products which entitled them to a share of every mortgage payment, thinking that they would get far more profit than investing in productive industry. Although they were well aware of the social importance of productive investment, they were only interested in higher profits.

The value of these CDOs was artificially inflated by having them rated by tame companies - the values were boosted by far more than the value of the properties used as security. As soon as the debt-led mortgage boom slowed and stopped, the value of these CDOs plummeted, as the speculators knew they would. Those adept at hedging their bets, made a killing, but millions of house owners lost their homes. It was a veritable crime against economy.

So when politicians talk about growth and investment in the economy, they would do well to remember that capitalist interests will never forgo the chance of quick profit. Instead of investing in industry, they will always go for the highest return, even if that undermines the economy.

They don't have a choice because they are in competition with other capitals. If they don't take the opportunity, their competitors will. If their competitors gain an advantage, they will lose market share and may even be taken over. So they follow the same scent as the pack. That mad anarchic self-serving logic is precisely what drove the world financial system to crash. And the scale of the crash sparked the state funding crisis that is now being translated into massive austerity measures.

None of this is a secret, even if politicians would rather not talk about it. Because they are all signed up to the belief that growth, trade, market forces, liberalisation of international capital and labour, and globalisation, are the saviours of mankind, and anything or anyone that questions these mantras are deemed unacceptable. But they are confronted with the empirical evidence of the madness of their beliefs. They have proved beyond doubt that blind competition, unconstrained capital, chaotic anarchic market forces, don't tend to equilibrium but to massive and sustained imbalances that benefits a small number of people at the expense of everyone else.

The bonuses are precisely the inducements used to reinforce the short-term profit-grabbing mentality that brings about the crisis. Any responsible government would be committed to ending that mindless competitive rush for short-term gain in the interest of planned investment in the economy.

But that's not how it works. If everyone is seen as a selfish, self-serving individual, each trying to maximise his or her own gain, and it is assumed that this leads to increased social good, then money-grabbing behaviour stimulated and reinforced by bribery is seen as somehow socially acceptable and even beneficial.

But anyone who can think for themselves will see the flaw in this ludicrous position even without the massive empirical evidence of where it leads. The whole argument rests on the idea that competition between individuals and companies is fair, that demand and supply, prices and profits, will equilibrate, will settle to a reasonable balance. But they manifestly don't.

In reality, it's all about power. Large fish don't compete fairly with small fish - they gobble them up. Large companies force smaller ones out of the market. Big states bully smaller ones, the IMF and World Bank impose crippling conditions on their loans to some states while offering favourable terms to their friends. Trading blocks manipulate and control markets even when they are pretending to open them up with neoliberal policies. Those conditionalities are precisely designed to enforce unequal power relations.

The bonuses provide a potent symbol of that damaging corrupting system and there is no reason why we should think ourselves lucky that it is only £7 billion this year. It should be zero and the whole amount should be used to pay off government debt incurred to bail out the speculators.

If the politicians were really concerned about the causes of the speculation they would consider measures such as a tax on every hedge fund transaction. That alone would significantly reduce the power of the hedge funds to create their profitable imbalances in the currency markets. It would also raise more than enough cash to pay back the states who have bailed out the banks. And that in turn would obviate the need for the so-called austerity measures.

But that is far, far too rational an approach for a system based on anarchic competition and blind faith in the market. And it would hurt the pockets of the powerful.

Everyone is breathing a sigh of relief at the wonderful successful rescue of the thirty-three miners from the mine in the Atacama desert. It was a triumph of human determination and technical skill, achieving such a rescue at such a depth. And whilst the media circus engaged the dignitaries and politicians such as the billionaire Chilean President Sebástian Piñera, and the socialist Evo Morales, no-one can deny the heart-rending images of desperate relatives waiting for their loved ones to come out.

I won't have been the only one to notice the role that religion played in the drama. Chile is a very religious country with many practising catholics. They get hope from their faith in a generous and protective God, sufficient to keep them positive in the face of poverty and adversity. Their priests tell them that their lot is an opportunity to show resilience and faith, that God is testing their character, and that he will reward them in heaven.

Not so in the case of Piñera who has decided to avail himself of the riches on earth. As a media magnate not dissimilar to Berlusconi, he has backed the right wing consistently and made a fortune. He doesn't need the piety and platitudes of the clergy because he has the power to do what he wants. And the mine owners like their wealth now too. But the miners are not so lucky.

Despite the appearance on the screens of a cleric odiously trying to claim some of the praise for the rescue by talking about his gathering of praying catholics, this wasn't about a God providing an opportunity for humble people to show their strength, but about a mine disaster. The roof collapsed and thirty-three human beings were trapped. God didn't make that happen nor did he get them out.

At least one of the miners had been working in the mines since he was twelve years old. Mario Gomez, 63, has the miner's disease silicosis as does Mario Sepulveda. It is an occupational disease, a type of pneumoconiosis, caused by breathing in fine silica dust. People suffering from it are condemned to a short life of breathlessness, chronic weakness, coughing, and lung complications. There is no treatment and sufferers often die early.

There is though an effective preventative. By filtering the air and providing protective masks, the incidence can be very greatly reduced and even eliminated. But that costs money, and in the Chilean copper mines, safety has never been a particularly high priority, despite what the owners claim. They are out to make money and they will cut costs to do so.

The safety ladder that was supposed to provide miners with an escape route in the event of a roof collapse was only one third constructed. The "refuge", the area where the miners took shelter had the power cut off and had no ventilation. The San Jose mine has a poor safety record. In 2004, a miner Pedro Gonzalez died following a roof fall. In 2006, a truck driver Fernando Contreras died in an accident. In that year alone, 182 workers were injured, 56 of them seriously.

The mine was even closed in 2007 after a geologist was killed in a mine explosion, but it was reopened again in less than a year. While the church praises itself for supporting a benevolent God and pretends to have had a hand in the rescue, and the politicians wallow in the media exposure, our attention ought to be on the working conditions of the miners, the poverty of their families, and the culpability of those owners who put profits ahead of human lives.

We should be struck by the obscenity of a billionaire politician telling desperately poor miners' families that "we are all together". It is the fact that businesses can exploit working people to extract the wealth they produce that gives rise to the appalling conditions in the mines as well as the wealth of people like Piñera.

We can only hope that the mining businesses will be held to account but with a billionaire as a president who has very strong vested interest in maintaining the exploitation, there's little chance of that happening.

Listening to the media at the moment in the UK, you'd get the impression that every single problem facing the government is part of the legacy left by the outgoing New Labour government. Every single statement by the Tory politicians is prefaced with a reference to this legacy but it pays to check the facts.

The massive financial crash hit in September 2008 but the budget of 2007 estimated that Britain's structural deficit was 3%. At the time, the Institute for Fiscal Studies reckoned that two-thirds of that was borrowing for investment, leaving only 1% of GDP as the financial black hole - a level that was relatively easy to manage.

At the moment, the structural deficit is around 8% so what made the difference? Well, there was the small matter of absolutely eye-watering levels of borrowing to bail out the collapsing financial sector. That is the direct cause of the current demands for austerity. If the banks were taken into public ownership without compensation, accompanied by capital controls to prevent the flight of capital, there wouldn't be any need for the austerity measures.

But even allowing for 8% structural deficit isn't of itself catastrophic although the politicians are presenting it that way. Throughout the post-war period, many economies operated on consistently much higher levels of national debt. When the National Health Service was established in the UK, the economy was running a deficit of 200% of GDP which persisted throughout the long boom years of the fifties. The reconstruction effort, largely publicly funded, continued throughout this long deficit period.

It simply isn't true that deficit economies are necessarily in crisis. So why is there so much emphasis now on austerity? The reason is that the paymasters from which states borrowed, namely the World Bank and the IMF, are insisting on these measures to turn states into debt repayment machines.

Using these "structural adjustments" in a directly political way to shift the balance of power away from working people and even governments, they expect to restore business confidence and encourage investment with the promise of higher profits.

But it was the chasing of higher profits that led to the financial crisis in the first place as investors played the market in fictitious derivatives and securities rather than invest in productive industry. The crude fact is that they could make more money speculating than investing and they were compelled to chase those higher profits or they would be pushed out of business. It was the madness of competition that left them no choice in the matter - it wasn't greed but capitalist survival pressure.

The idea now is that if working people are forced to work harder for less, then industry once again will attract the investors by promising higher profits. But that will only work if there is growth and the financial products don't offer higher returns. So all of our lives are made subject to bribing irresponsible investors who are forced by the madness of chasing the highest profits available to speculate rather than to invest.

The cruel irony is that New Labour were the architects of reducing control on financial capital which permitted the crazy race into speculation on imaginary products. Having created the opportunity, New Labour is having a hard time criticising those who took the speculative chance and brought down the economy.

Both parties support capitalism and both are caught in the chaotic crisis-ridden mechanism of market competition. While the swingeing cuts take effect, it is working people who once again are expected to pick up the tab.

It won't be long before at least some EU states contemplate the prospect of defaulting on their international loans, breaking out of the Euro, devaluing their own currency and trying to minimise the damage locally. That would produce inflation but they would at least again control their own economy.

Austerity measures won't remove the crisis pressures and growth won't be coming back any time soon. Politically, we are in dangerous times as the far right take advantage of the inevitable social conflict.

It seems even the mainstream newspapers are now talking about protesting against the cuts. Johann Hari's excellent piece in the Independent argues against the customary apathy inspired by people thinking that nothing is achieved by protest.

Of course, the impact of the protests has a lot to do with the nature of the protest and depends critically on how easy it is to ignore it. Petitions achieve almost nothing except notifying people that there is or might be an issue to address. Ignoring a petition is very easy.

Strike action on the other hand is much more difficult to ignore. During strike action, the mainstream press always criticises strikers for inconveniencing people, damaging business confidence, hitting profits, and so on, as if the strikers had no legitimate case at all.

In fact, working people resort to strike action because it is one of the few effective weapons against employers who have all the cards stacked in their favour. They have the press on their side, the general apathy of the population, economic power as well as the law, and so working people facing this assembled force cannot hope to achieve their aims using petitions, pleas, and appeals to reason. They have to hit profits and in the public sector they have to hit the government.

And whilst one group of workers can be pitted against another by the press and politicians, using arguments like the inconvenience caused, workers are weakened by their divisions. But where there is solidarity, acting together in mutual support, the strikers are strengthened and their prospects of winning are greatly improved.

This time around it is very starkly a conflict between protecting the interests of the rich and those of the poor. Everyone knows that it was the bankers speculating with entire economies that caused the crisis, and everyone knows that ordinary working people are being expected to pay for it.

Now more than ever, working people have a vested interest in uniting together against the cuts, a blatantly class-based assault on working class conditions and social services. Whilst George Osborne cancels the tax bill for Vodaphone, thousands are being thrown out of work. The issue could scarcely be clearer. Do you support the rich or do you support the poor? The present austerity is about subsidising the damage caused by the rich by making poor people pay for it.

Apathy has always been right-wing, favouring those already in possession of the economic power. But turning the other cheek stops being credible when the second one gets slapped. So now people are starting to realise that unity is what matters, and that there are some things where compromise is the same as a defeat. Half a million jobs lost means half a million people with their livelihoods ruined - that's a crime against economy.

In France, Greece, Spain, and other countries, there are movements fighting the cuts. And all those political liberals who are stridently wrestling with the consciences while they actually do nothing, will eventually urge acquiescence and compromise, an acceptance of defeat even before the fight has begun. But hopefully there will be a strong enough social force to make them irrelevant. Those going on strike are striking for all of us, pushing back against a right-wing government intent on making poor people pay for the damage caused by the madness of the financial markets.

The austerity measures are all about shifting power more towards the owners of capital, away from workers. And working people are being fed stories about the national interest, the public welfare, and our shared future, as if the owners of capital really lived in the same world as the rest of us. But they spend more on lunch than a working class family lives on in a week.

While George Osborne cuts a corporate tax bill, low income families are paying for it instead. That the political and economic reality in our world. And that's why everyone should be supporting the fight against the austerity measures.