Issue 205 of SOCIALIST REVIEW Published February 1997 Copyright Socialist Review

NOTES OF THE MONTH

Editorial, Police Bill, Korea, domestic work, drugs, Peru

Editorial

Gordon Brown's speech on 20 January, pledging Labour not to increase income tax and to continue with Tory controls on public spending, was not an abandonment of socialism. That happened long ago. The new development is the Labour leadership's determination to ditch social democracy the old idea that Labour would use the instruments of government to improve the conditions of the majority. Labour never stood for revolution (perish the thought) but it did represent some hope of better times to come. Not any more.

The Labour leadership has now explicitly rejected the idea of using tax to redistribute wealth more fairly. 'The difference in priorities between the parties', says Brown, 'is between the Conservatives who would help the privileged few and Labour which will reward the hard working majority.'

But in contrast to Labour's firm promise not to increase the top rate of tax even for those on 100,000 a year there is no commitment to the lower paid. For those at the bottom of the heap tax cuts remain an 'ambition'. 'I would like to have announced that we could definitely introduce a ten pence rate in our first

budget,' says Brown. But 'without the information available to the government on the true state of the public finances, I cannot promise that resources are available to do it. And, therefore, I will not make a promise about the timetable for its introduction. This is a measure of the prudence and caution with which we will proceed.'

New Labour = New Prudence. But only in its commitments to the poor. Apparently it costs nothing to reassure the rich.

The logic of Brown's speech is that Labour will hold income tax down by putting up other taxes, such as VAT, the council tax and national insurance contributions. All these taxes have one thing in common they favour the rich at the expense of the poor. Labour's commitments on these taxes are limited. It says it won't put VAT on food, fares and children's clothes and that it will reduce (not abolish) the Tory tax on fuel.

Brown's other aim is to hold down public spending, starting by implementing the existing Tory spending plans for 1997-98. Labour's grand aim now is to 'reorder existing budgets to meet our priorities'. So what is given with one hand will be taken away with another. Just as under the Tories, the targets for cuts will be social services and welfare payments. As for the health service, there is not the slightest suggestion that Labour will deviate from Tory policies. We can only imagine what will happen next winter when health trusts start running out of funds.

The real priorities of the Labour leadership were laid bare in a Financial Times interview with Tony Blair (16 January). His model is no longer the supposed social democratic heaven of Sweden or Germany, but the United States. 'People don't even question for a single moment that the Democrats are a pro-business party. They should not be asking the question about New Labour.'

The 'two real problems' facing the British economy are an 'undereducated and underskilled workforce' and 'a long tail of companies which are underperforming'. In the long term 'the best thing government can do is set a framework within which business has the stability to plan and invest in the future'.

In stark contrast to all this it is clear that the vast majority of ordinary people want a higher rate of tax on the rich and more spending on health, education, pensioners and the poor witness the row over the proposed 60m on a new royal yacht. The recent pronouncements from Blair and Brown will have angered people even more. The election of a Labour government will do little to dissipate this feeling.


Police Bill

John Witzenfeld

For decades the Home Office has authorised police to enter homes and offices to look through documents and plant bugs without legal authority. This amazing fact has emerged as part of the discussion on the Police Bill. Under guidelines set out in a 1984 Home Office circular the police only require a chief constable's prior approval in serious criminal investigations. In 1995 in the UK as a whole there were over 2,000 covert bugging operations by police and customs officials.

However, this 1984 circular does not confer legal immunity on the police. To avoid the police being sued even more than they are now and to attack ordinary people's rights further, the Tory government intends to give these abominable practices the protection of statute law. The provisions of the bill will allow police to obtain a warrant enabling them to bug and burgle any home, office or workplace from chief constables, or in their absence, from assistant chief constables or commanders in London, whenever they think it necessary to combat 'serious crime'.

What is serious crime? Under the bill it applies to offences where a person might expect a prison sentence of three years or more on first convictions, as well as those involving violence and substantial financial gain. So it would include offences such as street robbery. It also includes offences involving a 'large number of persons in pursuit of a common purpose' which could thus involve strikers such as the Liverpool dockers and their supporters or anti-road protesters.

Even Law Lord Browne-Wilkinson has stated that, 'The bill ignored the long established principles that the state, its officers, the police or anybody else have no greater authority to enter property than anyone else. If they do so it is illegal.'

It will be the police themselves who will decide whether to grant a warrant, and only after the warrant has been acted on will the commissioner (a judge) review what the police have done. This is far too late in the process and provides no real safeguard. These powers also extend to solicitors' offices and barristers' chambers, thus destroying the fundamental right to consult a lawyer in private.

The bill would also force anyone applying for work to reveal if they had a criminal record or not. Even if someone was found innocent of a charge, the new 'criminal conviction certificate' would contain a record of the charges.

You might think that the Labour Party would be leading a campaign against these draconian measures taking us even closer to a police state. Not a bit. Jack Straw, shadow home secretary, supported the Tories at first until the Labour Party saw the strong opposition to the bill. Labour then tabled amendments which if passed would mean the police having to get approval from new 'surveillance commissioners', who would be senior judges, before they could mount bugging operations in homes and offices. They would also seek to ensure that the measures were not used against peaceful protesters such as the anti-roads campaigners and that there was special protection for lawyers, doctors and journalists.

Tory Home Secretary Michael Howard's latest kick in the teeth was from the unelected House of Lords which backed amendments to ensure prior authorisation by a panel of judges calling for prior approval to be given by circuit judges. The defeat in the House of Lords has now thrown the whole legislation into doubt. Pressure has to be built to ensure it is thrown out completely.


Korea

Kevin Ovenden

The mass strikes which paralysed South Korea in January have severely weakened the government of Kim Young Sam. The use of riot police armed with teargas against strikers alienated large sections of public opinion and Kim's standing in the polls plummeted from 30 percent before the strikes to 17 percent afterwards.

His decision to ram a new labour law through a secret session of parliament on Boxing Day provoked the biggest wave of strikes in South Korean history. It also undermined his credentials as a crusader for democracy Kim Young Sam is the first civilian president in 37 years. The new legislation makes it easier for bosses to sack workers and delays introducing full union rights until 2002.

Although leaders of the outlawed Korean Confederation of Trade Unions decided to scale down the strikes on 18 January to stoppages every Wednesday and demonstrations each Saturday, the movement forced the government to seek compromise over the labour law. The South Korean stock market dropped 4 percent on hearing the news of the government's partial retreat. But the impact of the strikes goes far wider than Korea itself.

The events of the last two months have shattered many of the myths politicians in Britain and other western countries repeat about the largest 'Asian Tiger' economy. Virtually every news report on the strikes in South Korea carried the message that the new labour law was necessary for South Korean companies to abolish 'outdated work practices' and compete in an era of globalisation.

The most astonishing aspect of these claims is that they came from people who only six months ago were telling us that South Korea represented a model economy in which high levels of growth went hand in hand with social stability and a cooperative approach between bosses and workers. Some commentators did not manage to execute the 180 degree turn in time. Labour front bencher Michael Meacher wrote a column praising the South Korean economic miracle in Tribune (3 January 1997) as hundreds of thousands of workers downed tools.

In another about face, some analysts appear to have discovered that South Korea is not the free market miracle it was cracked up to be. Financial Times journalist John Burton went so far as to call the South Korean economy 'state directed capitalism'. This grasps an element of the truth.

The South Korean economy grew dramatically in the 1960s and 1970s precisely through an alliance between an authoritarian state and a small number of giant companies. In 1961 total economic output stood at $2.1 billion, about where it had been in 1950 at the outbreak of the war between North and South Korea. By 1976 the figure had reached $95.1 billion and it topped $100 billion in 1987.

Five factors combined to generate the stunning growth which led to the industrialisation of this poverty stricken ex-Japanese colony. There was a strong authoritarian state built up under General Park Chung Hee who seized power in 1961 and later suspended elections and political parties. This state introduced a system of bureaucratic planning of the economy. The Economic Planning Board issued five year plans which set targets for production in key areas of the economy. As with the economies of the Eastern Bloc these plans had nothing to do with satisfying people's needs, but rather were about concentrating resources for investment in heavy industry. South Korea received a generous supply of foreign capital.

The division of the Korean peninsula between the pro-Moscow North and the pro-Washington South meant the whole area was a hot spot during the Cold War. The US and later Japan were very willing to give high levels of grants and loans to build up South Korea as a bulwark against Chinese and Soviet influence in the region. The third Five Year Plan (1971-76) was financed by $4.5 billion in loans from foreign governments and banks. Over the next five years that tripled to $13.1 billion. Japan and the US provided ready markets for Korean exports.

The state intervened to back the giant conglomerates, the 'chaebols', which grew up to dominate the South Korean economy. Within the space of 20 years nine of these companies grew from obscurity to win a place on the Fortune list of the world's top 500 firms. The government underwrote their enormous debts. The average debt to equity ratio of the largest chaebols is about 400 to one.

When some of the chaebols faced bankruptcy in 1971 Park Chung Hee's government stepped in to cut corporate taxes and interest on business loans. The effect was to channel all available credit into the hands of these family run firms. That squeezed smaller companies out of the market and prevented new ones from getting off the ground. Now just four industrial groups, Hyundai, Samsung, Daewoo and Lucky Goldstar, account for 30 percent of total sales in South Korea and over 50 percent of exports.

Throughout the period of economic growth wages were kept down and unions repressed. There were repeated violent confrontations as workers fought against long hours, low pay, and the most unsafe working conditions in the world.

Growing unrest in the late 1980s forced the regime to move towards parliamentary democracy and improve conditions. Ex-general Roh Tae Woo oversaw the transition to free elections in 1992. Wages increased rapidly over the last ten years as workers have sought to recoup some of what the bosses have taken as profits. The average factory wage in South Korea is now about 250 a week.

But the reason for South Korea's economic slowdown is not that workers have been cosseted in the face of international competition as the media claim. The very way of organising production which led to three decades of growth is itself responsible for the economic problems.

In the 1980s Korean bosses found they could not compete in high tech areas simply through having low labour costs. They had to move sharply to invest in research and development. It was not easy to make the required technological breakthroughs because each chaebol was composed of 15 to 30 companies involved in diverse areas of production. So Hyundai for instance is involved in shipbuilding, cars and electronics. The government tried to intervene to make sure each chaebol concentrated only on a particular area of expertise and invested there rather than, for instance, frittering money away on real estate ventures.

The US had a large trade deficit with South Korea and pressured it to open up the economy to imports. South Korea now imports 14 billion more than it exports. The chaebols are so large that the government cannot risk letting one of them go bust. That means productivity cannot rise through letting the most inefficient companies go to the wall.

The sharpened competition has led the ruling class to launch an assault on workers and it has turned to authoritarian methods to try and push them through. So we find that in the South Korean 'exception' bosses are talking the same language of deregulation and downsizing as they are in Europe and the US. And they anticipate a future of higher unemployment, job insecurity and sharper battles between bosses and workers.


Domestic work

Judith Orr

To most people the Upstairs Downstairs world of servants and domestic help belongs to the 19th century, but nearly 20 years of tax breaks for the rich and benefit cuts for the very poorest in society are bringing that world back in the 1990s. A new study, by researcher Rosie Cox, shows that a layer of mainly women are having to take part time, low paid jobs as part of a growing black economy doing housework and cleaning in the homes of the wealthy.

It's a sign of times, explains Cox, and just shows how far from a 'classless' society Britain is today. As Cox explains, 'The top end stuff like butlers and housekeepers has just grown. The best figure I could get was that there was 3,000 butlers in the country (and they do still iron the newspapers for the people they work for!). It's a trendy thing, a sign of the rich getting richer. A butler costs 45,000 a year in wages, plus they're on the books, you're paying their tax and national insurance. You've got to give them somewhere to live not a room but a flat or cottage, a car, pay for their food. If you have a butler you're going to have a housekeeper so the very very rich are employing more of those people.'

But the increased use of domestic help is not confined to the super rich. Many more are involved in providing child care, 'nannies, au pairs, mothers' helps, all that's grown because of a combination of more women working, particularly women working full time some distance from where they live but also because of the real lack of state nursery provision or childcare.'

Cox's study has also found a growth of the use of cleaners, although many remain officially invisible because they work for cash in hand in order not to lose precious benefits. She found that 'whereas previously there was much more angst about getting people to do your dirty work, it's now more socially acceptable. For instance many people send out their ironing or other "domestic services". In Hampstead there's even a company which picks your kids up and drive them back and forwards to school. These things are quite new.'

But how are these modern day servants treated? 'Generally people were really bad at recognising that for the people they were employing, that was their job. When I asked people whether they paid sick pay or holiday pay, most said things like,"Oh, I don't know. She's never been ill. I don't know what I'd do". They really wanted to feel they were friends with their cleaner. People with cleaners did not think of themselves as going back to some kind of Upstairs Downstairs situation. They felt quite appalled by the idea of it and were resistant to looking at that comparison. Many referred to the relationship being mutually beneficial. One of the questions I asked people was, "What did you call each other?" Almost everyone was on first name terms but one woman I interviewed said she and her cleaner used first names yet later she just referred to her as "the cleaner" when talking to her children.'

Recent news coverage surrounding city banker Nicola Horlick dwelt on her ability to hold down such a demanding job and have five children. Few pointed out the obvious benefits of earning a 1 million salary, so being able to pay several full time staff to look after the children and run her four storey home. As Rosie Cox points out, the contrast between this and the lack of insight into the lives of the working class women carrying out these and other jobs is striking: 'I think it is very funny that if you're well paid, then you're superwoman, and if you're not very well paid and you're the kind of woman who's always worked then you are seen differently. If you come from a working class background then trying to juggle childcare is just seen as part of your role, because you have to arrange with friends and families or pay for a childminder to collect children from school. Some of the cleaners I talked to did run into horrible difficulties if they had to change the day they were working on because of arrangements with their kids, and everyone just takes that as if it's the most normal thing in the world.'

The favoured option for middle class families is to employ an au pair. Many young women come to Britain in answer to advertisements which describe childminding delightful youngsters as part of the family, with plenty of time to have fun and learn English. The reality can be very different. 'Probably the richest family I interviewed had an au pair who was just 18 and she was living in a room which was converted from the turn in the stairs it was six foot square, if that. She was completely isolated looking after a little baby and knew absolutely no one in this rich residential area. The family obviously thought she was a servant that was how they treated her. She didn't feel happy using communal space in the house. When I went to talk to her she didn't even feel we could sit in the kitchen and so we talked in her room. Some employers said of their au pair, "Well of course she doesn't sit in the living room in the evenings. She's got a television in her room." They get paid 35 a week for a 25 hour week the one who lived on the stairs was working 35 hours a week for 50. Out of that they have to pay for their own tuition for English classes which they have to go to to fulfil their contract.'

The media reaction to this latest research showing an increase in domestic service and examining the treatment of domestic workers has been to produce interviews with middle class people saying how much they love their nannies. 'The Telegraph went completely overboard, saying what a great thing this growth of domestic work was and said how good it was for people to meet people from other social groups and how it created employment opportunities and was a very good way to transfer wealth from the richest to the poorest.'

But what the study demonstrates is both the ever growing gap between the rich and the poor and the status of work in the home which is still seen as women's work. As Rosie Cox concluded, 'The fact that women perform reproductive labour is a very important part of the way society is structured and women subordinated. Domestic work is considered to be of no economic value because it's normally done for free which is one of the reasons why people who employ cleaners can't see that they are working, in the same way that another job would be regarded as working. This keeps it as a low status job. Where housework fits in to society is where domestic workers will fit into society. So these workers have to put up with all the stigma attached to housework and there's lots of it because of the place of women in society.'


Drugs

Lee Humber

When Brian Harvey from the band East 17 remarked that taking the drug ecstasy was harmless and improved people it was greeted with howls of pompous outrage. A different response greeted the remarks of Crispian Mills of Kula Shaker. On a phone-in show he advised a young caller that the best way to get a band together was to 'take lots of psychedelic drugs'. Mills, ex public school son of Hayley Mills, grandson of Sir John Mills, received barely a reprimand. So why the big fuss over Harvey?

Ecstasy has become a normal part of weekend recreation for many working class young men and women. Harvey's stance is seen as an affirmation of illegal behaviour. And this, of course, is too much for the state to swallow.

The hypocrisy of the public stance on drugs never fails to stagger. All the usual suspects were rounded up to condemn Harvey's comments including the ex drug squad dad of Leah Betts who died after taking a tab of ecstasy. The sickening anti-drug campaign based around Leah Betts routinely ignores the fact that the official inquiry into her death found that it was caused not by the drug itself but by her drinking too much water in a mistaken belief that this would lessen the effects of the drug.

Between 1988 and 1993 only 14 deaths had been directly linked to the use of ecstasy, whereas in 1992, 1,400 premature deaths were related to overall illegal drug use. This is in complete contrast to the safety record of the legal drugs, alcohol and tobacco. In 1992 alone there were 28,000 deaths related to alcohol. Each year there are over 110,000 smoking related premature deaths. So why no 'Just Say No' campaigns around these two killer drugs?

The alcohol and tobacco industries are two of the most profitable in the world. Both operate ruthless campaigns to open up and exploit new markets. Women and the young are key target areas. Trendy advertising encourages 11 to 15 year olds to consume over 1 billion cigarettes per year, shelling out 120 million in the process. According to the World Health Organisation smoking will kill over 1 million of today's children and teenagers by the time they are middle aged. Children and teenagers have been aggressively targeted by the booze barons too, with the recent array of alcoholic lemonades aimed specifically at the very young.

Illegal drugs are one very real form of competition to the legal drugs industries who expect the governments they bankroll to ensure their monopoly positions are protected. What can we expect from an Labour government? At best a continuation of the anti-drugs offensive and an increase in the moralism that passes for government information on illegal drugs.

Socialists have a different and very simple alternative. In the short term we need information on how to use drugs safely while illegal drugs should be legalised, and in the longer term we need a different sort of society that negates their use.


Peru

Mike Gonzalez

On 18 December 1996 a groups of 18 well prepared guerrillas occupied the Japanese Embassy in Lima and held hostage the 450 or so dignitaries who were there for a diplomatic reception. The guerrillas belonged to a group named after the leader of an Indian rebellion against the Spaniards in the late 18th century the Tupac Amaru Revolutionary Movement (MRTA). According to the Peruvian government the MRTA had ceased to exist; 400-500 of its members were in Peru's appalling jails facing 30 year sentences. Like the more influential group Shining Path (Sendero Luminoso), they were broken by a completely ruthless Peruvian government. In 1990 the new president, Fujimori, promised social reforms combined with a war against Sendero. By 1993, having captured 'Presidente Gonzalo', leader of Shining Path, he claimed victory over the opposition. And that was how things looked.

The war against terrorism was also a useful instrument for controlling and terrorising a population that in the six years of Fujimori's government has suffered rocketing unemployment, collapsing living standards, mounting street violence (street shootouts, often drug related, are a common part of day to day experience in Lima). Peru, after all, was an important laboratory for the testing and implementation of the new 'neo-liberal' economic strategies imposed everywhere in Latin America in the 1990s. Their reality was a shock programme to destroy public services, privatise all public enterprises, and compete in the market for cheap and passive labour.

The reappearance in 1991 of cholera was the sign of things to come. In 1994 the living conditions of most of Peru's population collapsed.

The fight against terrorism, in these circumstances, is the mask that a repressive state wears when it sets out to crush all resistance to its own interests. For the US and Japan, the largest and second largest investors in the country, the 'new' Peru was a more reliable place for their capital. So it was particularly significant that MRTA chose the Japanese embassy to occupy.

The MRTA today probably has no more than 200 active members. Its claims to have a network of trade union and community organisations are very questionable. Formed in 1983-84, its strategy of spectacular acts of armed propaganda, placed it closer to organisations like the pre-1979 Sandinistas in Nicaragua. Spokespeople were emphatic about their devotion to workers' democracy, but there is limited evidence of any long term dedication to creating mass organisations of resistance and struggle.

At the end of the 1980s the Peruvian ruling class's internal crises had made it almost unable to govern. Sendero's politics had contributed to that crisis in a series of acts of confrontation and sabotage which found support among desperate slum dwellers in the cities as well as some rural communities. But it was also true that Sendero's belief that it alone could lead the revolution led it to attack and destroy many of the organisations and unions that sustained resistance.

As the repression grew, the relentless sectarianism of Sendero left the mass organisations confused, hence the unexpected electoral majority for Fujimori, who promised economic growth and social reform. Later he turned his machinery of repression against those who had supported him. He was re-elected in 1994, perhaps because Peru had by then experienced a slight economic boom and the guerrillas were apparently destroyed.

The re-emergence of the MRTA is both a sign of the left's terrible weakness and of the depth of the crisis in Peruvian society. Prediction is a dangerous exercise. The MRTA and the government have now set up a negotiating committee. The guerrillas' demands are for a release of their prisoners and safe passage out of the country. Fujimori's whole reputation is staked on his remorseless anti-terrorism; his adviser, Montesinos, reputed to be the real power behind the throne, is a merciless killer and a protege of a US government which is bitterly opposed to negotiation.

On the other hand, the death of prominent Japanese figures in the embassy would destroy Fujimori's most fruitful source of investment and support. Tanks and armoured cars are starting to circle the embassy as a news blackout starts to take effect. It seems unlikely Fujimori will release any prisoners, though he might be persuaded to improve conditions and possibly free some high profile prisoners.

Whatever the outcome, the sad truth is that Peru's majority are watching and waiting. It is important that the MRTA is seen to gain some kind of victory and that Fujimori's weaknesses are exposed. That might at least help to encourage the resurgence of a popular movement of resistance and struggle of which there is a fine tradition in Peru.


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