We must build on Connolly’s legacy
But it is our time, our fight, our history in the making. Take to the streets with pride, and march behind your trade union banner on 9 February
The great lock out in 1913—14 was “an apprenticeship in brutality, a hardening of the heart of the Irish employing class” (Connolly). The current attack on Irish workers by the state sees the ruling class re-enacting that brutality through its continuous austerity measures being hurled at workers, their families, the unemployed, and community organisations.
For the last three years we have been active witnesses to this. There is not a household or an individual unaffected—some worse than others—unless you are in the “fat cat” bracket. The consequence of the triumph of the bankers and their fellow-travellers has led the country to an economic crisis, which has almost destroyed our existence as an independent,
‘I see people aged 67 or 68 at class reunions who dodder around and are constantly going to the doctor. Why should I have to pay for people who just eat and drink and make no effort?’ ‘The Ministry of Health and welfare is well aware that it costs tens of millions of yen a month to treat a single patient in the final stages of life. The problem won't be solved unless you let them hurry up and die.’ Asô Tarô, prime minister of Japan (multi-millionaire former president of AsoCement, which employed prisoners of war as slave labour), 26 November 2008.
sovereign state. Now, self-interest furnished by greed is not unusual in a capitalist state: what is unusually was the previous Government’s response. They accepted liability for the debts of private speculators. The second staggering blow to the Irish people is that the present Government is continuing with this policy. These policies are not in working people’s interest: the poor, the marginalised, the unemployed are the scapegoats. Let us put the debt and the present economic and political policies into context. The decision to continue to pay the speculators has resulted in Ireland carrying 42 per cent of the entire euro-zone bank debt. Now that is overwhelming: to put it in context, every man, woman and child pays €9,000 of bad bank debt, compared with €192 per capita in other eurozone states. (These figures were supplied by Michael Taft of Unite.) Connolly understood that the working class needed fighting, militant trade unions to defend their interests, given the irreconcilable divisions between workers and a capitalist class that sought to brutally maximise profits at its expense. But trade unions are only one part of the representative coin. It is political parties that make the decisions that affect all citizens. The question is, are trade union interests being represented by present Labour Party policy?
Inside this issue
CPI calls for support for the ICTU demonstration page 2 The ICTU’s “better, fairer debt” strategy page 2 2013: the continuing of the great scattering page 3 ‘Social Europe’ for the EU’S privileged page 4 Rarefied Davos air fosters elite illusions page 5 More on monopolies globally page 6 Democracy and the crisis Part 1 page 7 Is Ireland a tax haven? page 8 Another imperialist intervention in Africa page 10 Slanted media attack Caribbean socialism page 11 FILM Red westerns page 12 Socialist Voice 3 East Essex Street Dublin 2 (01) 6708707
Who is responsible for economic policy?
he ICTU would appear to have conveniently forgotten that it was this Government that introduced the horrific budget in December 2012. This was a budget that attacked the poorest and the most vulnerable disproportionately (a lot of trade unionists and their families are suffering), while leaving the wealthy relatively unscathed. And the Government called this a “fair budget.” The Government had choices, just as they had choices when they were elected and instead of pursuing a policy of blind compliance and deference to the European banking institutions they could have chosen a different road and could have repudiated the bank debt. The real reason for not taking a different approach is that we have a neo-liberal Government, pursuing neo-liberal policies, and these policies are in the interests of capitalists and not of the people as a whole. We cannot pay the €3.1 billion promissory note, and we should not pay it. It is not a debt owed by trade unionists, community organisations, or the unemployed. It is a debt belonging to speculators. The ICTU wants trade unionists to demonstrate against European bankers that
are crippling Ireland. Good. But this is where the problem becomes evident. The European bankers are crippling Ireland on behalf of bankers as a whole, and these include our own bankers at home. Flaw number 3, which is probably the biggest mistake of all for the trade union movement, is the notion that rallying around the Government on this will save the Croke Park deal—or, which is much the same thing, make Croke Park mark II more bearable. This is a delusion. The Government’s policy towards the labour market and the public sector will not alter if the terms of the bank debt are modified. There are two reasons for this. The first is that the Labour Party has no traction on Fine Gael’s determination to privatise, marketise and disassemble the public sector, in the interests of private investors and providers. The second is that bank debt relief will have no short-term effect on the gap between what the Government borrows and what it spends. The coalition—including the Labour Party—is in thrall to the neo-liberal solution to this problem: austerity, austerity, austerity. So when we take a stand—make it your stand: n No to bank debt. n No to austerity. n No to the austerity Government.
CPI backs the ICTU demonstration
Take a stand—but make it your stand. The ICTU leadership has called for major demonstrations on Saturday 9 February. Demonstrations are taking place in Dublin, Waterford, Cork, Sligo, and Limerick. The main theme of the demonstrations is the restructuring the bank debt. The CPI supports that call to rally. The ICTU slogan is “Lift the burden: jobs, not debt.” It is arguing that the €64 billion bank debt is unsustainable and must be restructured. While we do not agree with the ICTU’s economic analysis of dealing with the crisis, we do call on all people to support the demonstration. There are several flaws in the ICTU’s strategy, not least the fact that it appears to have given up on any notion of national sovereignty. It argues that we need to convince the European Union that Ireland needs a deal on the bank debt, and that the trade union movement needs to support the Government in making this case. Now, while some people may think there is some merit in this argument, the difficulty with this is that we are letting the Government off the hook. This is flaw number 1.
The ICTU’s ‘better, fairer debt’ strategy
We have long advocated a strategy for the organised trade union movement whereby it would not only take the lead in the struggle against austerity but take a central role in opposition to the socialised corporate debt. The signs coming from the ICTU are not good. The demonstration planned for the 9th, while very important, can only be the first step towards a much more focused and sustained strategy. They have not presented any clear demands, given no direction to members about what they should be demanding. They have reduced organising workers to an expensive PR campaign costing €340,000 of members’ money for half a dozen oneoff demos. The fact that no leading trade union officer was to speak on the platform at the Dublin demonstration shows a clear abdication of responsibility. The reason given is that they wanted one clear message for the media on the day, and they didn’t want to be booed, as they have been at previous demonstrations, particularly in the pre-budget demonstration organised last December page 2 SOCIALIST VOICE
by the Dublin Council of Trade Unions. Very few of our esteemed leaders cut their teeth in the rough-and-tumble of general meetings of members, of branch and section committees, never mind strike committees. There they would have experienced the sharpness of debate and arguments that would have made the few boos from a few hecklers seem pretty tame. No, the real reason is that they didn’t want any critical voices from the platform. They did not impose censorship: rather they cover their complete capitulation under the guise of not confusing the message or having their message lost because of a few boos. And one suspects the fundamental reason is that they didn’t want any critical words directed at the Labour Party in government: no demands for nonpayment or calls for repudiation of the debt to be articulated. The demonstrations have been called to back up the Government’s negotiating on the promissory notes, not opposition to the socialised corporate debt imposed on the people by the EU and the Irish
establishment. The Government’s position is to pay the debt, only extending the repayments over a longer period. The ICTU in effect has reduced its demands to a “better, fairer debt.” They are still following the logic of “social partnership.” If we back you up in regard to the debt, you give us something in Croke Park II. We will deliver and manage our members’ expectations. The ICTU has no policy on the debt other than the one the Government gives it. Its overpaid advisers have nothing to offer, neither have those employed as “economists” within the trade union movement anything to say that is not a “better, fairer debt” strategy. They are co-ordinating their efforts with the Government to ensure the passing of Croke Park II. If there is to be another Croke Park deal it will lead to the destruction of trade union organisations in the public sector, just as “social partnership” destroyed trade union organisation in the private sector. [EMC]
2013: the continuing of the great scattering
The economic crisis continues to take a heavy toll on working people across the board, while the spoofing from Government ministers, in particular from the Labour Party, continues to talk up the “recovery” under way. The mix of Government policies is working, and the icing on the cake will be a deal on the bank promissory note. The recent reports from the Central Bank and the ESRI have both revised their growth forecasts downwards for 2013, and neither sees any improvement in the job situation. The ESRI is predicting that employment will remain unchanged, at about 1.83 million, and will rise by 7,000 during 2014. Growth in employment has been focused on the private sector, in particular in the exporting transnational sectors. The Government, Central Bank and ESRI figures are all predicated on a growth of exports into the extremely sluggish economies of the European Union, Britain, and the United States. The EU, the British government and the Obama government in the United States are encouraging the same argument: that growth in employment will come about through increased exports. So if they are all exporting, who will be importing? At the same time the state is promoting early retirement from the public sector. More jobs will be lost in the public sector than can be replaced in the private sector. So it is a spiral downwards in regard to jobs and job losses. There are 429,000 people registered as unemployed who sign on at Social Welfare offices—despite the fact that the minister for
“social protection,” Joan Burton, claims that the figure is 324,000. There are an additional 83,400 people on back-to-work and community schemes. Putting these figures together, we have more than half a million people looking for and needing work. The Government’s great initiative for this year was the “Gathering”—an appeal to the Irish people who were forced to leave the country to look for work, generation after generation, to come home for their holidays, to spend money and boost the economy, while at the same time emigration denudes the towns and villages of our youth and young families. Those who can walk are being pushed onto every available plane out of the country. This is clearly seen in the fact that unemployment in the 25–30 bracket has gone down, because of the mass emigration of our youth. The population of the Republic grew by 341,900 between 2006 and 2011; but there were 48,900 fewer between 20 to 24 in 2011 than there were in 2006, 12,300 fewer between 25 and 29, and 9,900 fewer between 15 and 19. The great Scattering grows apace. The economic and social policy of this Government is to drive the greatest possible number of people, in particular our youth, out of the country as quickly as possible. This has always been their answer to their failure to create a sustainable economic base. What is clear is that capitalism itself cannot create stability, nor the tens of thousands of jobs required. Stability and job creation will be achieved only with the establishment of a planned economy and a society organised to meet the needs of the people and the environment. [EMC]
‘The philosophers have only interpreted the world, in various ways: the point, however, is to change.’ Karl Marx 11-00am - 12-30pm Saturday 9 February: Why Class Matters Themes: Classes and class struggle; Historical Materialism.
Saturday 23 February: The State, Democracy and Social Revolution Themes: A look at the state we're in. What constitutes the state? Saturday 9 March: Economics: Neutral Science or Arena of Struggle? Themes: The labour theory of value and its relevance today
James Stewart 1934—2013
The Communist Party of Ireland expresses its deepest sympathy with the family of Jimmy Stewart: with his wife, Edwina, also a life long member and activist of the CPI, and his two daughters, Helen and Moya, with all his grandchildren and extended family. Jimmy Stewart was a former general secretary and former national chairperson of the CPI. For more than three decades he worked full- time for the party. Along with Seán Murray he drafted the party programme, Ireland’s Path to Socialism, in 1963, outlining the political strategy and tactics of the CPI, which contributed to the emergence of the Northern Ireland Civil Right Association in the mid-1960s and the resulting mass mobilisation of working people for democratic demands. He played a prominent role in the reuniting of the two parties, the Irish Workers’ Party in the South and the Communist Party, Northern Ireland, in the North, to form one united allIreland communist movement. A full account of the role and activities of Jimmy Stewart can be found at www.communistpartyofireland.ie . pictured above in the Kremlin at the 70th anniversary celebrations of the Russian
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‘Social Europe’ for the European Union’s privileged elite Within the European Union Commission, Andor László’s is not a powerful voice. He isn’t listened to in the same way as, for example, “Supercommissioner” (and Super-budget-fetishist) Olli Rehn. Yet occasionally Andor, EU Commissioner for Social Affairs and Employment, has a message that even the Commission has to listen to. The statistics are alarming. In the EU the unemployment rate has reached 10.4 per cent, which is an increase of 0.9 percentage points since 2011. In the euro zone the figure is even higher, at 11.6 per cent. What this means is that more than one in every nine people in the potential work force is without a job. Among those between the ages of 15 and 24 the rate is as high as 22.8 per cent. An entire generation is threatened by exclusion from the labour market and the loss of any future. The growth of poverty is equally spectacular, with one in four menaced by poverty. Work is no guarantee that you won’t find yourself poor, with one in twelve employed people living below the poverty line—proving that new jobs often don’t provide a living wage. What is demonstrated by Andor’s report is that a different course must be followed if we see social provision not as a luxury but as a page 4 SOCIALIST VOICE
necessity for a humane society and a shockresistant economy. That demands a complete reversal of the present policies of the EU Commission and leaders of member-state governments, who continue to stick strictly to the 3 per cent norm.
‘An entire generation is threatened by exclusion from the labour market and the loss of any future’
In addition to budgetary goals we should be establishing goals for employment and for the fight against poverty, and these should be more than vague criteria but rather definite, well-defined and measurable objectives. But Eurocrats would not be Eurocrats if they didn’t immediately deduce from this that Brussels must have more power. And how would they use that power? Recent revelations about the misuse of EU subsidies proves once again that different priorities prevail in the EU. There is a good case for having
transnational corporations disqualified from receiving EU subsidies designed to contribute to the development of poorer regions and for a tightening up of the rules governing such subsidies. Agriculture subsidies are being paid to golf clubs and to the British royal family. Now, for the umpteenth time, it has been shown that money meant to help unemployed people in poor member-states is being spent on luxury courses for the managerial staff of profit-making corporations, such as Unilever, Pepsi, Mercedes-Benz, and Deutsche Bank. European Union subsidies are not supposed to be used to beef up the profits of big firms, and the European rules should ban this. The European Court of Auditors has still never been able to approve a budget, for the most part because of inadequate monitoring in the member-states. The Court of Auditors also has justifiable concerns over the effectiveness of the funds. In the continuing negotiations on the EU’s multi-annual budget, governments are quite rightly trying to have national contributions lowered; but questions of monitoring and control continue to be a side issue. Even worse than handing over too much cash to Brussels is seeing it badly spent and used to enrich the profits of wealthy transnationals. [COM]
Poverty and wealth in France
The crisis of the system is hitting workers even in the heartland of the European Union. Workers, pensioners and the sick are all paying a heavy price. According to a recent survey, almost a quarter of French people have little or nothing left to live on at the end of the month. These “nouveaux pauvres” are students, single parents, casual workers, and the elderly. With the rise in fixed expenses, such as rent, public transport, electricity, and health, French people on small salaries are having difficulty making ends meet. Between 12 and 15 million of them, who live just above the poverty line (€954 per month), are struggling by the end of the month. • The minimum wage of approximately €1,100 a month is no longer enough to make ends meet. • 2.2 million workers have to combine several jobs in order to survive. • The average state pension of France’s 15 million pensioners is only €1,200. • Unemployment reached 3 million for the first time in more than ten years. The “Restos du Cœur,” the charity created by the late French actor and comedian Coluche, has seen a 25 per cent increase in demand for food in the space of three years. For many French people the crisis is so severe that they are no longer ashamed to ask charities for help. And at the other end of the scale are some of the wealthiest French people:
The truth behind the myth of ‘social Europe’
The president of the European Central Bank, Mario Draghi, declared to the Wall Street Journal a year ago that “the European social model has already gone.” The reality is that the “European social model,” which claimed that European “social partners”—trade unions and big business— were “all in it together,” was always an aspirational myth rather than a reality.
Cost of the Bank Bailout
A recent Eurostat study showed that Ireland, and Irish people, have paid the highest cost of the Bank Bailouts in Europe. Ireland has paid 42% (€41 billion) of the total European Bank Bailout that is 25% of Irish GDP. This compares to the €40 billion Germany has paid which is just 1.5% of its GDP. The bailout has cost Irish people €9,000 per person compared to Germany’s €491 per person and compared to an EU average of €192 per person. What is important, however, to remember is that the Irish bailout was ultimately paying back loans made to Irish financial institutions by our ‘partners’ in Germany, Britain, France, Belgium and Holland. The Irish Guarantee was a guarantee we would pay them back.
Rarefied Davos air fosters elite illusions
he 2,600 members of the global elite convened at their exclusive retreat in Davos, Switzerland, once again set about “improving the state of the world.” A columnist in the Financial Times described it as the most optimistic meeting since 2007. In a certain respect, the cautious hopefulness of the 2013 meeting was perhaps justified, as it was only a year ago that the retreat was pre-empted by warnings of a looming period of “evil” and the potential “collapse of the financial system” from no less than George Soros. Yet one year later, while optimism gains a foothold among the world’s elite, the evil doled out by global capitalism continues unabated. According to a recent report by the International Labour Organization, “the number of unemployed worldwide rose by 4.2 million in 2012 to over 197 million.” And, as the report goes on to warn, global unemployment could increase even further in 2013. Global youth unemployment, meanwhile, remains particularly dire. According to the ILO report, nearly 74 million people between the ages of 15 and 24 are unemployed. “Some 35 per cent of unemployed youth in advanced economies have been out of a job for six months or longer,” the report states. “As a consequence, increasing numbers of young people are getting discouraged and leaving the labour market.” And for those now languishing in the global reserve army of labour, the forecasts for meagre growth offer little hope of a reprieve. According to the latest World Economic Outlook by the International Monetary Fund, global growth is predicted to reach 3½ per cent in 2013. That is a downward revision of 0.1 per cent from the fund’s October outlook. But it is much worse for the advanced economies. The IMF predicts that the euro area will contract by 0.2 per cent in 2013, with contractions in Italy and Spain of 1 and 1½ per cent, respectively. In France, where youth unemployment is already over 25 per cent, growth is projected to register a measly 0.3 per cent. In Britain it is the spectre of a triple-dip recession that looms, after a contraction of 0.3 per cent was seen in the last quarter of 2012. As the Guardian reports, “the economy remains 3.5% below its peak in 2007 and is not expected to regain its previous level for at least another two years, making it the longest recovery in 100 years.” Growth in the United States, meanwhile, is projected by the IMF to come in at 2 per cent— a downward revision of 0.1 per cent from the October outlook. And all this as equality in the
United States continues to worsen. A report by the influential US Economic Policy Institute reveals that real annual wages of the top 1 per cent of earners grew by 8.2 per cent from 2009 to 2011, while the real annual wages of the bottom 90 per cent continued to decline, eroding by 1.2 per cent between 2009 and 2011. One important cause of the rapid wage and income growth of the highest earners— particularly the top 1 per cent—is the sharp increase in corporate CEOs’ pay. Another is the expansion of the financial sector and the increased pay, relative to other workers, of those in the this sector. Other factors contributing to the general increase in wage inequality include policy decisions (of omission as well as commission), such as those concerning globalisation, the minimum wage, collective bargaining rights, industry deregulation, and unemployment. But even the bleak outlook for the world’s advanced economies may be too optimistic. As the IMF cautions, “downside risks remain significant, including prolonged stagnation in the euro area and excessive short-term fiscal tightening in the United States.” Indeed, as the Economist warns, “you might think that six years after the global financial crisis first broke, the downturn would be well behind us and the economy would be humming along. Instead, huge swaths of the world seem to be embarking on a Japanese-style experiment with long-term stagnation.” This is precisely what the Marxist scholars John Bellamy Foster and Robert McChesney argue in their latest book, The Endless Crisis. Showing that the globalised system of monopoly-finance capital is characterised by a dangerous stagnation-financialisation trap, Foster and McChesney argue that it is in fact stagnation that is now the norm—not growth. And this stagnant reality has left greater financialisation as the only acceptable remedy for the global elite. “Yet,” they write, “rather than overcoming the stagnation problem, this renewed financialisation will only serve at best to put off the problem, while piling on further contradictions, setting the stage for even bigger shocks in the future.” Of course, working out how to put off the problem, while piling on further contradictions, is where the World Economic Forum comes in. After all, despite the pretentious claims of “improving the state of the world,” Davos is really little more than a posh mountain retreat held for global elites hell-bent on preserving their own privileged class positions. And, in this sense, the growing talk of an “economic recovery” is the by-product of a world suspended in an illusion cultivated annually high up in the Swiss Alps.
SOCIALIST VOICE page 5
More on monopolies globally S
ocialist Voice over the last few years has tried to refute the myth of a highly competitive capitalist system that innovates to create jobs and passes cost reductions on to consumers, exposing it as a highly monopolised system in which production, wealth and ultimately power increasingly reside in the hands of fewer and fewer companies, institutions and individuals, with grave consequences for working people in employment, democracy and the environment and for humanity. The fact that this is a monopoly system matters both in analysing the crisis today and in seeking to expose the weaknesses of the system and to present an ideological challenge to it, rather than promoting the restoration of growth and profitability—i.e. saving capitalism—as many on the “left” appear to be doing. Monopoly capitalism is driving the pauperisation of working people in a global race to the bottom as production becomes highly internationalised and automated. The concentration of wealth under monopoly capitalism has increased the political power and control of a tiny global elite, to the detriment of national democracies. It has consistently prevented any serious or significant steps being taken to redress environmental destruction, as the largest polluters are those that profit from its destruction. It is driving peasant communities off the land, creating horrendous slums and unemployment, as land is increasingly monopolised for single-commodity production. The anarchy of production and the increasing disconnection between production and consumption create global instability and almost constant overproduction. The growth of finance as an outlet for surplus accumulated capital, and the high concentration of this capital in the hands of a few players, adds to this instability and gives rise to speculative bubbles that grossly distort and ultimately destroy local economies. Billions starve while food is dumped. Billions stand idle where teachers and nurses are needed. Hundreds of millions are homeless while vacant houses are boarded up. Hundreds
of millions die from preventable disease while medicines are withheld. This is monopoly capitalism today: disgusting and wasteful, serving the needs of only a few. Let’s take a look at a selection of global sectors and who the controlling powers are. In the world of news and information, the largest companies are GE, News Corp., Disney, Viacom, Time-Warner, and CBS, which control about 90 per cent of the market in the United States. News Corp. owns the biggest-selling newspapers in three continents, but they maintain their separate brands to provide the illusion of choice. So, for example, GE owns Comcast, NBC, Universal Pictures, and Focus Features; News Corp. owns Fox, the Wall Street Journal, the New York Times and, closer to home, the Times (London) and the Sun. It also has a large shareholding in BSkyB and is attempting to purchase Sky’s sports “rival,” ESPN.
‘Monopoly capitalism is driving the pauperisation of working people’
Disney owns ABC, Miramax, Pixar, and Marvel. Viacom owns MTV, Nick Jnr, CMT, and Paramount. Time-Warner owns CNN, HBO, Time, and Warner Brothers. CBS owns NFL.com, Smithsonian, Showtime, 60 Minutes, and Jeopardy. In Ireland, of course, we have Independent News and Media, controlled by the O’Reilly family and Denis O’Brien, which owns the Evening Herald, Irish Independent, Sunday Independent, Sunday World, and Irish Daily Star, as well as fourteen regional titles. Denis O’Brien’s Communicorp Group also owns Today FM and 98FM, Newstalk, Spin 1038, and Spin South-West, as well as about forty other radio stations in Europe. In accountancy in the late 1980s there were about eight global firms; by 2002, and following the collapse of Arthur Anderson as part of the fall-out of the Enron “creative accounts” fraud, this has been reduced to four. The “Big four,” as they are called, are Ernst
and Young, KPMG, Price-Waterhouse Cooper, and Deloitte. Their combined income grew from $89 billion in 2007 to $103 billion in 2011. Tobacco production is dominated by China National Tobacco, Philip Morris International, and British-American Tobacco, whose combined market share is about 70 per cent of global production. The four “ABCD” firms— ADM, Bunge, Cargill, and Louis Dreyfus— dominate the global trade in grain, along with the global commodities trader Glencore and the Marubeni group. Together they account for about 90 per cent of the world’s grain trade. In the area of new technology the smartphone market is dominated by two companies, with 85 per cent of sales in 2012 going to Android (Google) and iOS (Apple). It is rarely that these companies are ever penalised for monopoly practices, such as price-fixing and agreed division of markets, which they engage in constantly; but sometimes they are caught out and token fines are imposed. The technology companies Philips, LG and Panasonic were fined about €1½ billion by the EU Commission for engaging in a ten-year cartel, with regular meetings between the companies to agree prices in the region of 60 per cent above market value. Microsoft reached an out-ofcourt settlement with the US government for monopoly practices, including taking advantage of its near-monopoly position and price-fixing; it faced similar charges in the EU and was fined for it. Naturally, American politicians jumped to its defence, describing it as an assault by Europeon successful American businesses. American Movil, the biggest mobile network in Latin America, was fined $1 billion in a Mexican court for price-fixing on call charges. And Intel was fined $1½ billion by the EU for blocking tactics used in trying to destroy a smaller competitor. These are only some of the few successful cases, where the abuse is so outrageous that the authorities must act. But the practices are systemic and part of monopoly production and accumulation, particularly as the same companies struggle to find new avenues of growth, with ripping off existing consumers in new and clever ways the easier growth strategy. [NL]
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Democracy and the crisis Part 1 The importance of democracy as a central part of any progressive programme, whether socialist or republican, at the present time cannot be overstated. It is vital that Marxists remain committed to democracy in its real sense and advance it as one component of the way forward for society out of the crisis in capitalism. All around us we can see evidence of the erosion of even the limited scope of bourgeois democracy, as the capitalist system and its ideologues want to be free of more of the constraints on their actions. At the same time the political and ideological bankruptcy of much of social democracy, republicanism and the left in Ireland has led to a collapse in the articulation of a principled and coherent alternative to the status quo. To quickly illustrate these claims, first look at the way the establishment has attacked the idea that the people can and should participate in making the decisions about how society is organised. Since the first referendum on the Lisbon Treaty they have argued that the need for referendums on changes in the European Union is both inefficient and undermines
elected representatives; that giving balanced media coverage to the different sides in a referendum is unfair and inappropriate; and that the people always concentrate on issues that are not contained in the proposals under consideration. The capitalist state in Ireland would clearly be very happy to dissolve the people, though perhaps not so enthusiastic about electing another..
‘bourgeois democracy is neither real democracy nor a possible vehicle for revolutionary change’
Secondly, the complete capitulation of the Labour Party and its trade union supporters to the agenda of capitalism and imperialism can be seen in the actions and programme of the present Government. The Labour leadership boasts that it is willing to make the “hard”
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decisions and that the EU-IMF programme must be implemented so that the country can “return to the markets.” Obviously, they can see no alternative to capitalism and imperialism; unfortunately, they are not alone. While Sinn Féin has opposed the austerity programme of the Government and argued for a greater share of the resulting burden to be shouldered by the better off, it too sees no alternative to capitalism: just witness its argument that increased tax on higher incomes can be justified during the crisis but might be unfair at other times, or its acceptance that the EU-IMF targets are essentially correct, it is only how they are achieved and over how long that is in question. Nor has the United Left Alliance or any of the independent left in the Dáil offered any way forward: to an extent they have been trapped in the parliamentary game, discussing budgets and economic and fiscal policy within the terms of bourgeois democracy. While it is necessary to engage with the establishment discourse—this is part of the battle of ideas, the propaganda war—this is not enough. Proposing alternative sources of tax and demanding more investment to create jobs remains firmly within the capitalist status quo unless it is accompanied by demands that challenge capitalism’s organisation of the economy and society. They might produce a somewhat fairer distribution of wealth (certainly not a fair distribution), but any such gains will inevitably be subjected to the class struggle that is a continuing feature of class society. At a time when political understanding and ideology is at a very low level, the demand for democracy can be both a realistic approach and one that challenges the nature of the capitalist system. We know that bourgeois democracy is neither real democracy nor a possible vehicle for revolutionary change. But our criticism of it should be tempered by our understanding of the material conditions of class struggle in which it emerged in the modern era and in which it continues to exist. The breaking free from earlier feudal and aristocratic forms of social control was necessary for the development of capitalism— and it was progressive in its context. Bourgeois democracy has been called formal democracy or political democracy by academics. It essentially provides for a procedural equality in the political process of decision-making without allowing any of the content of equality. Part of the reason for this is that bourgeois democracy is confined to the political sphere and does not address the crucial social and economic spheres. As a system, modern representative democracy is not designed to give the people (the citizens) control over the decisions that affect their lives and shape society. Most modern theorists of democracy think this is a good thing: like our establishment politicians and commentators, they do not believe that the people are capable of making the decisions that govern their lives, nor do they think that this would be desirable. [FC] ■ Part 2 will be published in March
SOCIALIST VOICE page 7
Is Ireland a tax haven?
Can the term ‘tax haven’ be justly applied to Ireland today?
ince the global economic crisis hit in late 2007, a whole host of commentators have been trying to unveil the root causes behind the crash. One such area of study, emphasised somewhat of late in left circles, especially with the introduction of the new publication Irish Left Review, is that of tax havens. It is difficult to find an accepted definition of a tax haven, as the categorisation of the haven is usually fashioned by the criteria of the study. In general, though, we can think of a tax haven as an entity such as a country that tailors its tax laws and regulatory procedures so as to draw capital from abroad, away from other jurisdictions, by way of avoidance of tax and regulation, with maximum secrecy. To understand the emergence and continued vibrancy of tax-haven jurisdictions, some thought on their function in the global economic arena is worthy of consideration. Individuals, companies or transnational corporations doing business in the global economy have a duty to pay taxes in their country of residence. However, a company may have subsidiaries in numerous countries, with tax on its earnings paid at those countries’ rates. In such circumstances there might be the situation of double taxation, where the earnings in country B are taxed first in country B and then again in the home country, A. Obviously, companies and the countries in which they legally reside have taken steps to avoid such a scenario, in the form of tax treaties, for example.
‘Ireland “hosts over half of the world’s top 50 banks and half of the top 20 insurance companies’
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The other side of the coin is that there is a growing incentive for those residents and companies to avail of double non-taxation, “income escaping tax altogether solely as a result of crossing borders,” of which “the primary target has been countries which intentionally exempt capital from tax in one way or another—in other words, tax havens” (Rosenzweig, 2010). In this sense it can be demonstrated that countries that use tax laws to attract foreign investment are a result of the rules of the international tax regime, set up and dominated by the interests of the G7 and the United States in particular: in other words, tax laws are designed and implemented by the capitalist class in the interests of the capitalist class. The deindustrialisation of many of the longestablished capitalist countries has been one of the major factors in driving competition on tax policy. It is this tax competition that has generated the incentive for countries to widen their tax base by competing for foreign investment through such instruments as tax-
free policies, “secrecy in various forms, avoidance of financial regulation, avoidance of criminal laws, [and] escape from other rules of society such as inheritance or corporate governance rules” (www.tackletaxhavens.com). In other words, wealthy individuals or corporations—in short, monopoly capitalism— will try to avoid paying taxes so long as there are ways and means by which they can influence, manipulate or exploit the tax system. The private owners of industry don’t even want to accept the dues they owe to its citizens in a capitalist system. Countries that need foreign investment to meet their minimum revenue requirements will therefore take advantage of the high demand for both low tax and low regulation. Jurisdictions do this by competing in various fields, where they can, for example, employ tax rates that are less than the average in a certain geographical area, or “offer tax exonerations created in the development of export industries” (Maneal, 2010), both of which are relevant to Ireland. The typical image of a tax haven is of a small island country, such as the Bahamas or the Cayman Islands. However, some recent studies find that tax havens are flourishing in rich developed countries that offer different types of incentive for foreign investment to set up in their jurisdiction. One such study (Rosenzweig, 2010) that tries to explain the phenomenon of tax competition and tax havens contends that it is due to (1) a capital neutrality paradox (“as barriers to capital crossing borders are reduced, the ability to attract capital through tax competition increases”) and (2) punishment paradoxes (“punishing countries which engage in tax competition as a result of the incentives of the capital neutrality paradox will necessarily be counterproductive”) that have driven tax havens to more and more developed countries, offering different degrees to which an entity can avoid paying tax. Rosenzweig (2010, p. 961) gives a realistic scenario in which the punishment paradox leads to countries engaging in tax competition: Apply a similar analysis to a world with over one hundred countries, with the progression moving from Bermuda, Jersey, and Mauritius in the lowest tier, to Liechtenstein and Morocco in the next tier, and Austria, Ireland, and the Netherlands in the third tier. As nations punished Bermuda, Jersey, and Mauritius, the incentive would shift to Liechtenstein and Morocco, and if nations then punished them the incentive would shift to Austria, Ireland, and the Netherlands. So, rather than a decrease in the number of tax havens, as one would hope (seeing that tax avoidance can be very damaging to an economy), there has on the contrary been an increase of various degrees in the number. Whether it be a Cayman Islands style or an Irish style of tax haven depends on the political, economic and social values prevalent in the country. We may think of tax havens, therefore, as having differing tiers or ranks, in which individuals or companies can avail of their services to suit their purpose—in other
words, with different jurisdictions specialising in certain types of tax avoidance. There are two major indicators, closely linked, that would consider Ireland as being a tax haven. The first is its low corporation tax, relative to other European states, of 12½ per cent. The other is the presence of the Irish Financial Service Centre. Ireland has undergone major shifts in its economic policies, starting from a protectionist economy in the 1930s and 40s to what is now a fully open economy, which had its beginnings in the late 1950s with the introduction of exports profits tax relief in 1956, bringing about the first low foreign tax law. This basically allowed the Government to set different rates of corporate tax for foreign and domestic industries. When Ireland joined the EEC in 1973 the differential tax rate was considered discriminatory, and so the country had to adjust its tax policies, though the full implementation of a 12½ per cent tax on all trading companies was not introduced until 2003 (www.secrecyjurisdictions.com). The very reason for this low tax rate is in line with the literature on tax havens discussed so far, in that Ireland made use of its sovereign ability to set its tax rates at a lower level than the average in its geographical area to attract foreign investment. Lower corporate tax rates, however, are only one side of the question of being considered a tax haven. There are much cheaper countries (in terms of labour costs) and countries with lower taxes, in which manufacturing companies can set up operations; so having the low corporate tax rate to attract manufacturing business could not serve as a long-term solution to maintaining the required tax base. In the light of this, the development of the IFSC from 1987, under the direction of the corrupt Taoiseach Charles Haughey and his consortium of investors, business links, and wealthy individuals, can be much better understood as a move by the Irish state to appease monopoly capitalism and attract foreign investment by the other carrot, that is, “regulation havens in combination with maximum secrecy” (Troost and Liebert, 2009). As argued by Troost and Liebert, “since the EU’s new Eastern European Member States were also courting investors with low tax rates, Ireland had to come up with fresh concessions and built up the IFSC into a veritable shadow banking system.” (Shadow banks behave like banks, in that they borrow money and lend it on, at a profit; but they don’t take deposits from ordinary customers, and they fall outside the regulation system.) The Irish regulatory authority holds that it has no responsibility for investigating companies whose main place of business is outside Ireland. The scale on which investment has grown in the shadow banking system has “quadrupled between 2000 and 2006 to nearly €1.6 trillion— more than ten times as much as other forms of foreign direct investment in Ireland” (Troost and Liebert, 2009). And Ireland “hosts over half of the world’s top 50 banks and half of the top 20 insurance companies; in 2008 it hosted about 8,000 funds handling €1.6 trillion of
assets; the Irish Stock Exchange hosts about a quarter of international bonds” (www.secrecyjurisdictions.com). Can the term “tax haven” be justly applied to Ireland today? As we have seen, comparing Ireland to the Cayman Islands is too simplistic and isn’t reflective of the intricate global capitalist system. Therefore, when Ireland is taken out of isolation and into the global mechanism it plays no small role in the plague of global tax avoidance. Ireland is ranked 31st of 71 countries in the financial secrecy index. It can be rightly labelled a tax haven. If we are to conclude that Ireland is a tax haven, a fundamental problem arises in trying to tackle the practices of tax and regulatory avoidance. Because of the role foreign investment plays in the Irish economy, without a vibrant indigenous manufacturing base the state, in its present form, is totally subservient to the very policies that make it a tax haven! One has to ask oneself if the type of politicians and political parties that dominate the political spectrum have either the desire or the will to really tackle the monopolies and the scourge of tax avoidance. Even as recently as 2012 it has been shown that very profitable transnational corporations pay only a small fraction of the prescribed 12½ per cent, while the Irish working class and its allies are hit hardest with house taxes and water charges, being strangled and stripped of their services, their welfare and their public companies and slowly but surely losing all meaning of the words “sovereignty” and “democracy.” Tax avoidance is not a new phenomenon, but its scale is global and tiered, with Ireland placed as an integral cog in monopoly capitalism’s wheel. The benefactors are the owners of the monopolies and their allies, while those who lose out are ordinary working people. It’s not just a matter of tax justice: tackling tax havens is a class issue, confronting head on the owners of capital and their allies. If our present political parties are unwilling to tackle them, they need to be replaced with classoriented parties and organised labour. Class warfare has many battlefronts, and global tax havens is just one such front. The need to develop class-consciousness and build a strong class-oriented party, such as the CPI, is as important now as it was a hundred years ago. [EON]
Maneal, Adrian Constantin, “The tax havens, between measures of economic stimulation and measures against tax evasion,” Bulletin of the Transilvania University of Braşov, Series VII: Social Sciences, Law, vol. 3 (52), 2010. Rosenzweig, Adam H., “Why are there tax havens?” William and Mary Law Review, vol. 52, issue 3 (December 2010), p. 923–996. Troost, Axel, and Liebert, Nicola, “Trillions down the drain of tax havens and shadow banks,” Blätter für Deutsche und Internationale Politik, 3, 2009. (Available on line at www.taxjustice.net/cms/upload/pdf/TroostLiebert_tax_havensfinancial_crisis.pdf.)
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International Another imperialist intervention in Africa
mperialism has once struck in Africa. After Libya, now it is the turn of Mali. On 11 January, France launched an aerial attack on the country and had moved 2,500 of its ground troops for action. The purported motive is to save the country from Islamist fundamentalists. Already reports of civilian casualties are pouring out. According to the UN High Commission for Refugees, nearly 230,000 Malians were displaced internally, and an additional 144,500 were already refugees in neighbouring countries. This is not all. The recent hostage crisis, which led to the death of citizens of many countries in Algeria, shows that the crisis in Mali is going to have repercussions for the entire Sahel-Sahara region. The crisis in Mali began with the military coup in March 2012, just a month before the elections were to take place. The events that followed rapidly plunged the country into a deep crisis—political, economic, and military. In April the Tuareg-led National Movement for the Liberation of Azawad (NMLA) declared the independence of the northern part of the country. Within a few months they had lost control to three groups of Islamic fundamentalists. It was to “prevent” the “takeover” of the entire country by these Islamist groups that France moved in. Or so they claim. President Hollande said the threat of a radical Islamic takeover was so imminent that he had no choice but to intervene—to save not just Mali but all of western Africa and, the French now imply, Europe as well. The public relations machinery of the Western countries dish out the usual reasons for military intervention: “jihadists,” “threat to democracy,” “wipe out terrorism from the surface of the earth,” and “potential threat to European longterm security.” Historically, France used its control of Mali to ensure its hegemony over other colonial possessions in Africa. The statement by the “socialist” president Hollande that “the age of what was once called ‘Françafrique’ is over” reeks of hypocrisy. Mali is crucial to the Africa Command of the US Army, created in 2008, and to the Pentagon’s general “Middle East-Northern Africa” (MENA) outlook. Mali borders Algeria, Mauritania, Burkina Faso, Senegal, the Ivory Coast. and Guinea. And Mali is rich in natural resources, with gold, uranium, bauxite, iron, manganese, tin, and copper. Studies point to plenty of unexplored oil in northern Mali. The United States has been militarily involved through the training of the Malian page 10 SOCIALIST VOICE
army since 2001. In 2005 it established the Trans-Sahara Counter-Terrorism Partnership, comprising eleven African “partner” countries: Algeria, Burkina Faso, Libya, Morocco, Tunisia, Chad, Mali, Mauritania, Niger, Nigeria, and Senegal. Every year it conducts joint military exercises in the region. Incidentally, Captain Amadou Haya Sanogo, who led the coup, was trained by the United States and was closely associated with Africa Command. More recently, in June 2012, the United States came out with a National Security Strategy in Africa, with the usual guff about “strengthening democratic institutions,” encouraging “economic growth, trade and investment,” “advancing peace and security,” and “promoting opportunity and development.” Not to be left behind, the European Union and, more importantly, France have an active interest in this region. The uranium deposits in Mali and the uranium mines in neighbouring Niger are of particular interest to France, which generates 78 per cent of its electricity from nuclear energy. In September 2011 the EU came out with its own version of “Strategy for Security and Development in the Sahel.” This concluded that “improving security and development in Sahel has an obvious and direct impact on protecting European citizens and interests and on the EU internal security situation.”
‘Historically, France used its control of Mali to ensure its hegemony over other colonial possessions in Africa’
The active participation of China in the region is also a matter of growing concern to both the United States and the EU. The Chinese presence in the continent is increasing by the day, and Africa now provides a third of the energy needs of China. During this period of global crisis, naturally the control of regions rich in natural resources and markets assumes enhanced significance. The domestic situation in Mali provided a fertile ground for fundamentalist forces to take root. The global economic crisis had seriously affected the country. Employment fell, with many companies in the services sector closing or laying off workers. Most branches of the economy, with the exception of the mining industry, are in bad shape because of the crisis. The growing numbers of unemployed, falling wages and increasing prices of food grains and essentials created discontent among
the people. The fundamentalists took advantage of this situation. It is a known fact that the Salafist Group for Call and Combat, as it was known until it was renamed AQIM in 2007, grew out of Algeria’s Armed Islamic Group (GIA) and is controlled by Algeria’s security and intelligence services. The collapse of the Libyan government and the defeat of Gadaffi led to a widespread availability of arms. France is losing ground in many west African countries. In recent elections in Senegal a president from the centre-left was elected, defeating the French stooge. The only consolation for France is Côte d’Ivoire, where it staged a militarily intervention two years ago. In Mali too the progressive forces are gaining ground, which is worrying to the local elite and their international masters. A series of protests and strikes were organised by the workers and students in the capital city, Bamako. All these developments are viewed as a real threat to French hegemony in this region, so France acted to take back power before the situation spirals out of control. With the pretext of Islamic fundamentalism now available, France has moved to assume control over this resource-rich region. The United States, Canada and the major countries in Europe are helping the French with financial assistance, in training the Malian army, and in the transporting of troops. The plan would seem to be to have the actual fighting on the ground done largely by soldiers from the Economic Community of Western African States. What they will be fighting, however, is not only the Islamic fundamentalists but also the Tuareg nationalists (though the NMLA had welcomed the French troops), who have been consistently fighting for their right to self-determination. Already reports indicate that widespread atrocities were being committed against Tuareg people and people of other minorities. Mali is nearly twice the size of France or Afghanistan. Its terrain is varied. A prolonged guerrilla war would have devastating effects on the area, which would not be confined to Mali, as was witnessed recently in Algeria. The entire Sahel-Sahara region will be affected, and many fear that this might lead to the Balkanisation of the region. It was only after the Second World War that many countries in Africa secured freedom from the colonial yoke. But the colonialists left these lands with boundaries that disregarded the nationalities inhabiting them. Now imperialism is re-entering the region, using conflicts that stem from these artificial boundaries. [COM]
Slanted media attack Caribbean socialism
Western media reporting has convinced most people outside Cuba and Venezuela that these countries are run by dictatorships that have ruined them. But Cubans and Venezuelans have access to more information about their own countries than foreigners who rely on viciously slanted media. So they keep reelecting the politicians who have improved their lives—much to the annoyance of the major capitalist media and their sponsors. The president of Venezuela, Hugo Chávez, fighting for his life, has recently been the target of hate-filled journalism from some of the more influential publications on both sides of the Atlantic. An edition of El País, Spain’s main newspaper, influential also in Latin America, printed a grotesque front-page picture of a figure they claimed was Chávez, lying on his back in a hospital bed, with tubes hanging out of his mouth. The picture was of somebody else, taken in 2008. It had to withdraw this edition from the stands and apologise publicly—but not to Chávez or his family, as El País hates Chávez as much as it hates Cuban democracy. (Its Cuban reports come from the jaundiced pen of Yoanni Sánchez, a well-known dissident.) An article in the New York Times claimed that Venezuela had “dwindling productivity” and “an enormous foreign debt load.” In fact, under Chávez real GDP per capita, mostly driven by growth in productivity, expanded by 24 per cent from 2004. In the twenty previous
years, before Chávez, real GDP per person fell. As for the “enormous foreign debt load,” Venezuela’s foreign public debt is about 28 per cent of GDP, and the interest on it is about 2 per cent of GDP. If this is “enormous,” have a look at the corresponding figures for Ireland! So you can say almost anything you want about Cuba, Venezuela, Ecuador, and Bolivia, so long as it is bad, and it usually goes unquestioned. Statistics and data count for nothing when the mass media are presenting their ugly picture. Irish commentators often parrot such misleading propaganda, which then becomes solid fact, as we know to our cost, in the mind of the general public. In the 28 January issue of the New Yorker (“Slumlord: What has Hugo Chávez wrought in Venezuela?”) we read that “the poorest Venezuelans are marginally better off these days.” Marginally? From 2004 to 2011 extreme poverty was slashed by about two-thirds. Poverty (measured by cash income) was reduced by about a half. This doesn’t count the access to health care that millions now have, or the doubling of university enrolment—with free tuition for many. Access to public pensions tripled. Unemployment is half of what it was when Chávez took office. Venezuela’s reduction in poverty, growth in real income and other basic data of the Chávez era are accepted by international statistics agencies, such as those of the World Bank and the United Nations. But let’s not allow universally agreed statistics get in the way of socialism-bashing! This article is illustrated by grim
photographs of depressed-looking people in grim surroundings, though international surveys find Venezuelans to be among the happiest people in Latin America and in the world. The rant goes on: “After nearly a generation, Chávez leaves his countrymen with many unanswered questions, but only one certainty: the revolution that he tried to bring about never really took place. It began with Chávez, and with him, most likely it will end.” What universe does that malicious hack live in? Even Chávez’s opponent in the October presidential election, Henrique Capriles, was forced to promise voters that he would preserve and actually expand the Chávez-era social schemes that had increased people’s access to health care and education. And after Chávez beat him by a wide margin of 11 percentage points, Chávez’s party increased its share of governorships from fifteen to twenty of the twenty-three provinces, though Chávez himself was not even in the country. Venezuela will not regress, as the majority of Venezuelans have become used to sharing in the country’s oil wealth through government schemes and higher levels of employment and income in the private sector. Being savvy, they keep re-electing their president and his party. Why is a democratically elected president so viciously attacked, even when fighting for his own life? It is because, like Cuba, he has the temerity to show that socialism offers a viable and eco-friendly alternative to a neo-liberal capitalist regimen that impoverishes the masses as it ravages the planet. [TMS] SOCIALIST VOICE page 11
Women and the European Union (2009) by Deirdre Uí Bhrógáin €2.50
21st-Century Anti-Imperialism Andrew Murray’ James Connolly Memorial Lecture, 2010 €2.50 (£2.10)
We all know well the classic American western, the story of the strapping and urbane frontiersman slaying the uncouth and uncivilised natives. We have all been fed this brand of inaccurate and chauvinistic film-making almost since birth. These “cowboy and Injins” films have made such a cultural impact that there is a dangerous chance of them being taken, by the uninformed viewer, as historical fact. Luckily, most of us know the truth regarding the “Old West”: the brutal colonisers carrying out genocide against the Native Americans, using everything from swords to biological warfare. Within the propaganda-filled cocoon that was the American western film industry, a world of pink waistcoats, John Wayne, chivalrous heroes, and good holy men, there was no place for the truth. And American studios were not the only ones to produce westerns: Europe was well known for its ability to make such films, Italy in particular having a thriving western film industry. There were others, though. Such countries as the German Democratic Republic (East Germany), Yugoslavia and the USSR also produced westerns. These westerns, however, had little in common with their Yankee counterparts. Instead of painting the invading colonists as proud heroes they portrayed the bestial extermination of the native people and the violent theft of their lands. The films from the German Democratic Republic especially stand out. These films, produced by Deutsche Film AG or DEFA, notably made the Native American the protagonist. They showed the genocide carried out against the native people, displaying the savage acts of ethnic cleansing and land seizure. The films were well written, beautifully shot, and, most importantly, told the story of resistance against the barbarous
US army and the imperial white settlers. These films were produced from the 1960s onwards and acted as a counterbalance to the American westerns. The East German films were incredibly popular in socialist countries. The Sons of the Great Bear, released in 1966, sold tens of millions of tickets in the first few months after its release. It tells the story of the Dakota Indians struggle to hold on to gold it has discovered on its lands. The ruthless white settlers will do anything to take it from them. This tragic story perfectly represents the real struggle of the native people to hold on to their lands and the property found on them. Other popular titles would follow. Such films as Apaches and Chingachook joined The Sons of the Great Bear and many other titles to form a revolutionary collection of East German westerns. More than anything else they strove to expose the true nature of the “Old West.” They turned the traditional western on its head and sought to expose the festering truth from behind the gentle colours and clichéd plots of the American western. These films were big hits in socialist and progressive countries, where the people were well educated about the horrors of that malignancy that is colonialism. Their creators looked beyond the money-making business that is the traditional film industry and instead tried to produce art that would tell a righteous story. They produced art that would expose the suffering of native people in North America and show the true brutality of colonialism, whether in Latin America, Africa, or Oceania. These films never did make it in the West. Their content would not have sat well with the colonising states. The war crimes and crimes against humanity that they portrayed would have not coexisted peacefully with the myths the United States has spread regarding this eventful piece of its history. The films are hard to get, but they are available. They should be watched, because they offer a more realistic experience. These wonderful tributes to East German cinema serve a purpose. Like so many things in the enigmatic United States, one must look from outside for any shred of truth. These films provide much of that truth and are, as the Hollywood Reporter put it, “westerns with a twist.” [AF]
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