Future revolutions

Results of Kyoto to Date

Below is a list of the change in GHG emissions from 1990 to 2004 for some countries that are part of the Climate Change Convention as reported by the UN. .

Country	Change in GHG Emissions (1990-2004)	EU Assigned Objective for 2012	Treaty Obligation 2008-2012
Germany	-17%	-21%	-8%
Canada	+27%	N/A	-6%
Spain	+49%	+15%	-8%
United States	+16%	N/A	N/A
France	-0.8%	0%	-8%
Greece	+27%	+25%	-8%
Ireland	+23%	+13%	-8%
Japan	+6.5%	N/A	-6%
United Kingdom	-14%	-12.5%	-8%
Portugal	+41%	+27%	-8%
EU-15	-0.8%	N/A	-8%

Comparing total greenhouse gas emissions in 2004 to 1990 levels, the US emissions were up by 16%, with irregular fluctuations from one year to another but a general trend to increase. At the same time, the EU group of 23 (EU-23) Nations had reduced their emissions by 5% In addition; the EU-15 group of nations (a large subset of EU-23) reduced their emissions by 0.8% between 1990 and 2004, while emissions rose 2.5% from 1999 to 2004.

COP-4 took place in Buenos Aires in November 1998. It had been expected that the remaining issues unresolved in Kyoto would be finalized at this meeting. However, the difficulty of getting US agreement proved insurmountable, so the parties adopted a 2-year "Plan of Action" to advance efforts and devise mechanisms for implementing the Kyoto Protocol, to be completed by 2000.

When the COP-6 negotiations resumed in 2001, in Bonn, Germany, no progress had been made on resolving the differences that had produced an impasse in The Hague. However, this meeting took place after President George W. Bush had become the U.S. President, and had rejected the Kyoto Protocol in March; as a result the United States delegation to this meeting declined to participate in the negotiations related to the Protocol, and chose to act as observers at that meeting. As the other parties negotiated the key issues, agreement was reached on most of the major political issues, to the surprise of most observers, given the low level of expectations that preceded the meeting. .

At the COP-7 meeting in Marrakech, Morocco October 29-November 10 2001, negotiators in effect completed the work of the Buenos Aires Plan of Action, finalizing most of the operational details and setting the stage for nations to ratify the Protocol. The completed package of decisions is known as the Marrakech Accords. The United States delegation continued to act as observers, declining to participate in active negotiations. Other parties continued to express their hope that the United States would re-engage in the process at some point, but indicated their intention to seek ratification of the requisite number of countries to bring the Protocol into force (55 countries representing 55% of developed country emissions of carbon dioxide in 1990). A target date for bringing the Protocol into force was put forward: ­the August-September 2002 World Summit on Sustainable Development (WSSD) to be held in Johannesburg, South Africa.

The United Nations Climate Change Conference (COP 11) took place in Montreal, Quebec, Canada in 2005. It was the first Meeting of the Parties (MOP) since their initial meeting in Kyoto in 1997. It was the largest conference on climate change ever. 10,000 delegates attended.. It marked the entry into force of the Kyoto Protocol.

COP 12 was held in Nairobi, Kenya from 6 to 17 November 2006. At the meeting, the phrase "Climate tourists" was coined to describe delegates who came to see Africa, take snaps of the wildlife, of poor, dying African children and women.

UN efforts are not up to expectation given the current rate of growth of pollution and its hazards. This does not mean that Humanity as a whole is responsible for pollution. Most people everywhere desire to curb and minimize pollution. Only a tiny minority seeking profits or power subverts this desire. The power of this minority cannot be abolished by elected representatives. They are prone to the pressures of industrial interests diverting them from protecting public health at the expense of polluters.

Only direct voting by all citizens on all issues of pollution can be free from pressures by industry directors subverting efforts to maintain a clean, unpolluted, environment and planet.

Until all citizens - not their representatives - decide anti-pollution policy, anti-pollution activists can contribute by organizing and coordinating - via the Internet - a global boycott by citizens all over the planet of products of major polluters.

14. Big Business ? or Big Government ?

Privatisation or Nationalisation?

On December 24, 1991 the USSR was still a "union" of fifteen republics. Next day, on December 25, 1991 the USSR Parliament decreed this union void and the USSR ceased to exist. There were no mass demonstrations protesting against this decision, no confrontations between civilians and the army and no civil war.

For three generations Lenin’s one-party state educated and shaped its citizens’ mentality. Every schoolbook, newspaper, radio or TV program, all books films, theatre plays, or concerts USSR citizens were allowed to see had passed strict censorship by the state. This state provided all citizens with guaranteed employment (some of it forced) decent pensions, housing, health-care and education (including University). This was big government.

Yet despite all this USSR citizens did not rise to defend their state when it was dissolved in 1991, unlike in 1919 when many tried to bring back the Tsar’s regime. In 1919 there was a two-year civil war trying to reinstate the Tsar's regime. In 1991 no one fought a civil war to bring back Lenin’s regime.

When the USSR Parliament voted to dismantle the Union of 15 Socialist Republics into its constituent republics, its space-station Mir was circling earth with two Soviet cosmonauts aboard - Sergey Krikalev and Alexander Volkov. They were due to return to earth a few days later. When their return date arrived the USSR no longer existed and there was no one to cover the costs of their return. They were stuck in space till a way was found to pay for their return. Krikalev and Volkov remained "the last Soviet citizens" since down on earth the demise of the USSR terminated Soviet citizenship. Mir was a brilliant invention; it was - like the cosmonauts - a success. The USSR space program was a success. It did not fail. What failed was the BG one-party state that managed it. When that state collapsed it stopped managing its economy and all its projects, so the space program was temporarily stopped. This was not due to some fault of the space program itself. Nor was the USSR treasury bankrupt. It was due to the demise of the old management of the space program. This happened also to the state-owned economy. Like the space program it stopped due to the demise of the state that managed it. It stopped like a train whose driver is dismissed. Most USSR citizens rejected their BG one-party state but not the socialized economy or space programme. Dissolving the BG state terminated all its projects. Unlike the USA where politics depend on economics in the USSR economics depended on politics.

The state-owned economy in the USSR had amazing achievements. It started - in 1921 - to build a new economic foundation for a ruined agricultural country. In WW1 2 million Russian peasant-soldiers died, and another 5 million became disabled. Fields lay waste, there was hunger in the cities. The German occupation ravaged hundreds of towns and villages. Two revolutions in 1917 destroyed all the administration of the country. Offices, documents, and practices that used to administer 150 million people were destroyed. New - inexperienced - people began to administer the economy in new - untested - ways. British, French, American, and Japanese troops invaded Russia trying to topple Lenin’s regime. When they failed they armed and financed Tsarist generals to start a civil war lasting two years (1919-1921). This further ruined the country, parts of which changed hands many times. At certain moments Lenin’s regime existed only in St.Petersburg and Moscow. All the rest of the country was held by enemies of the revolution. Only in 1921 did the fighting end and the regime began to build a new economic base from scratch without any help from abroad. Moreover, Britain, France and the USA imposed an economic boycott on the USSR to strangle its economy. No foreign Bank was willing to lend the USSR money. Yet despite all this, in a mere 17 years, the USSR became a major industrial power manufacturing more tractors, tanks, and combines than Germany. Canals were dug, power stations and the electricity grid were built, rails laid, steel plants constructed, and plants to construct ships, locomotives, airplanes, trucks, pumps. Hundreds of new schools, hospitals, and housing estates were built. All this with very few engineers trained in the former Tsarist regime. This was done - before labor camps existed - by many young volunteers, under the leadership of dedicated planners like Piatakov and Preobrazhensky, and a great organizer like Ordjonikidze, all inspired by Lenin’s motto: “Socialism is rule by workers Committees plus the electricity grid”. The volunteers were enthusiastic even though the Committees were run by the Party, not by the workers. Moreover, Lenin’s one-party state hampered industrialization by its bureaucratic practices: 1) It appointed managers loyal to the Party rather than to their economic task. 2) It appointed political overseers to control workers, curbing their initiative and creativity. Stalin feared any independent initiative and assassinated those he suspected of having it. Despite these obstacles the rapid industrialization succeeded. In the first decade of industrialization the obstacles were overcome by genuine revolutionaries who refused to obey the party blindly and by the enthusiasm of the youth inspired by the task of creating a new society. Stalin assassinated most original revolutionaries in his show trials in 1936-38. He killed Piatakov and Preobrazhensky. Ordjonikidze committed suicide. Stalin took the credit for industrialization, terrorized the Party, and turned it into his rubber stamp. After 1937 only those obeying him blindly got leadership posts.

Starting in 1928, the first ‘Five-Year plans’ built the foundation for a heavy industry in Russia’s underdeveloped economy without waiting years for capital to accumulate through the expansion of light industry, and without reliance on external financing. The country was industrialized at an unbelievable pace, surpassing Germany’s pace of industrialization in the nineteenth century and Japan’s early in the twentieth. After the reconstruction of the economy, and after the initial plans of further industrialization were fulfilled, the rate of growth slowed down, but it still surpassed most of the other countries in terms of total material production (GDP) until the period of Brezhnev stagnation in the second half of the 1970s.

Industrialization came with expansion of medical and educational services, which improved labor productivity. Many new hospitals were built. Diseases like typhoid, cholera and malaria, disappeared; numbers of doctors and engineers increased as rapidly as facilities and training would permit; and death and infant mortality rates steadily decreased.

The state-owned, planned economy grew from the early 1930s to the 1970s. The USSR became the world's leading producer of oil, coal, iron ore, cement, manganese, gold, diamonds, natural gas and other minerals. Part of this was achieved by slave-labour of GULAG prisoners.

Growth slowed after 1960 but this was considered characteristic of a mature, industrialized economy. However, Moscow planning ministries had failed to loosen their control at enterprise level, thus causing the stagnation of the 1970s-80s which showed signs of becoming a chronic problem. "Pakazukha" (see p. 104) became endemic. The USSR planned economy was not tailored to the demands of the modern economy it had helped to forge. As the economy grew, the control of party planners in Moscow over every enterprise in the country strangled the economy. It curbed local initiative and creativity. The cumbersome procedures of bureaucratic administration by a single centre blocked free communication at the enterprise level, curbed creativity and initiative, causing alienation of workers and customers. Calls for greater freedom for local managers to deal directly with suppliers and customers were ignored. This caused stagnation of the economy and frustration of the population. After dissolution of the USSR all former Soviet republics scrapped their Soviet-era systems of centralized planning and state ownership, ruining the economy and breeding massive corruption. The State-owned, planned, economy of the USSR had achievements no BB economy had made. In 1957 it was the first to launch a satellite - “Sputnik” - to circle earth. This stunned the entire world and drew world wide respect. In 1989 USSR's BG passed a law granting women a 3-year maternity leave paid by the state. In USA, the world's richest BB economy, no law grants women any maternity leave even today. The BG one-party system damaged the efficiency of the state-owned economy and limited its capabilities. Employees loyal to their superiors were preferred to those loyal to their job. The nature of the state determined the nature of its economy. "Pakazukha" ruled. A socialized economy can function incomparably better in a non-party state (see Chapter 13).

This does not relieve us of the need to discuss the pros and cons of state participation in the economy. In the 20^th Century the controversy between supporters of state participation in the economy and their opponents passed through four stages: 1) before WW1, state participation in the economy was not taken seriously. 2) In the 1930s, following the Russian revolution, the US "Great Depression", Roosevelt's' "New Deal", and the emergence of the USSR as a major industrial power, economists began to see state participation in the economy as essential for reducing unemployment and increasing production. 3) After WW2 and the nationalisation of coal, steel, railways, and the Bank of England, by the Labour Party in Britain in 1945, and the creation of the state-owned, planned, National Health System, a state-owned, planned, sector in the economy was introduced in most European economies. Many new States in Asia and Africa did the same. 4) From 1976 onwards, there was growing criticism of state-participation in the economy. In the 1980s Britain's P.M. Margaret Thatcher, and US President Ronald Reagan began to sell socialized enterprises to private owners. Branches of the UK economy like coal, gas, railways, telephone services, were sold off to private owners. The argument for doing this was that socialized enterprises are inefficient, unprofitable, and waste tax-payers’ money. The debate between supporters of the two systems was renewed. Supporters of the BB were on the attack.

One reason for this was the effect of electronic computers on the economy. The electronic digital computer was invented in WW2 to speed up calculations of weather forecasts (for aerial bombing), shell trajectories, and nuclear processes. At first computers were very few, very big, very expensive, and very prone to stoppages due to burnt out triode switches. When transistor switches were introduced (1956) computers became smaller, cheaper, reliable and numerous. By mid-1960s every Bank, Insurance Company, University, and factory had one. In the 1970s they began to replace workers in industry. Computer-controlled machines made thousands of industrial workers redundant. A new phenomenon of increased production linked to increased unemployment baffled many. Hitherto production and employment rose and fell together. This was the basic idea of J.M. Keynes (see below) who argued in the 1930s that state-intervention in the BB economy is required for turning a fall in production and employment (predicted by Marx) into a growth of both. Most BB economies accepted Keynes's ideas. But in the 1970s, for the first time, production rose but employment fell. BB economies became afflicted with a new problem of rising productivity coupled to falling employment. Advocates of BB economies used this as an argument against Keynesian state-participation in the economy. The solution of this “riddle” is simple: when BB replaced worker-driven machines by computer-driven machines (in the printing, textile, and metal, industries) they sacked workers yet increased the pace and duration of production. When less workers produce more goods, profits grow but so does unemployment. Technological innovation had occurred before the 1970s but those made redundant by it could find new employment. When printing technology was computerized in the 1970s thousands of redundant, middle-aged, print workers, could not find new employment. This was a result not of modernization but of BB's greed. A labour-saving device can be used to reduce working hours rather than jobs. Thus its benefits will be shared by all workers. This possibility was never discussed. Computer-driven machines could cut working hours - not jobs. Profits would still rise. Workers can be re-trained for new jobs, not sacked. The rise of unemployment in the "Welfare Sate" despite government ownership of some sectors, and the USSR collapse in 1991, were used by advocates of BB economies as "proof" that every socialized economy is doomed. But what collapsed in the USSR was the BG state, not the economy, and unemployment in "Welfare State" was caused by BB greed not by “economic laws”.

Many economists have debated the pros and cons of state participation in the economy. Best known among them were Friedrich Von Hayek, Milton Friedman, John Maynard Keynes, and Kenneth Galbraith. The first two opposed state intervention in the economy, the last two advocated it. Their arguments can be found on the Internet. Here only the gist of their arguments will be mentioned.

The Austrian economist Friedrich Von Hayek (1899-1992), mentor of Margaret Thatcher, dismantler of the British "Welfare State", was the best known opponent of State participation in the economy. His main point was that any State participation in the economy is bound to reduce the freedom of the individual citizens. Von Hayek ends his best known book "The road to Serfdom" (1944) with the words: "Though we neither can wish, nor possess, the power to go back to the reality of the nineteenth century, we have the opportunity to realize its ideals. …The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century." ("The road to Serfdom" by F.V. Hayek, University of Chicago Press 1994. p. 262)

Most of Von Hayek's book argues that any economic planning by a government undermines the freedom of the individual and paves "the road to serfdom". Nowhere does he mention child labor, exploitation, 12-hours labor day, or the fact that the freedom of individuals like Henry Ford or John. D. Rockefeller controlled the freedom of millions of other individuals who worked for them.

Two economists wrote of the oil millionaire Rockefeller: “John D. Rockefeller knew a thing or two about power. His Standard Oil of New Jersey became a blueprint for corporate centralization. He pioneered new methods of stock rigging and financial mischief. He destroyed competition wherever he could and set new standards for industrial sabotage and union busting. He manipulated the tastes of ‘rational consumers’ and made ‘policymakers’ dance to his tune. He used violence to expropriate from indigenous Americans their resource-rich lands and religion to pacify their resistance. He harnessed the U.S. military to impose American ‘free trade’ on the rest of the world. Raw power made Rockefeller and his family enormously rich. And yet, to the end of his life, John D. insisted that his best investment ever was the $45 million he donated to rebuild the Baptist University of Chicago. Rockefeller saw Chicago as a religious asset. The philanthropy helped silence his critics in this world and pave his way to heaven in the next. It bought him the loyalty of spiritual shepherds and academic retainers, all eager to sing the praise of Standard Oil and glorify its devout owner. But in the long run the biggest yield came from the university’s department of economics. After the Second World War, Chicago emerged as the bastion of a new religion: neoclassical economics. The key tenets of the faith were laid down already at the end of the nineteenth century, and it was Chicago – perhaps more than any other university – that helped propagate them. Its professors, nicknamed the Chicago Boys, spread the gospel of perfect competition and free trade. They insisted that consumers were sovereign and economic actors rational. They called for the separation of politics from economics. They preached monetarism and demanded small government and sound finance. They made economics a mathematical pseudo-science, impenetrable to the laity. And they advocated the production function and the marginal productivity of capital – an ingenious model that justified the political rule of capital while making capitalists such as Rockefeller perfectly invisible. For these feats, the Chicago Boys were awarded plenty of Nobel Prizes. These included, among others, the prize to Gary Becker for his human capital, to Theodore Schultz for his development economics, to Robert Lucas for his rational expectations, to George Stigler for his attack on regulation, to Ronald Coase for his transaction costs and to Milton Friedman for his anti-Keynesianism. Subsequent generations of the Rockefellers presented a more moderate image than did their forefather. Theirs was no longer the wild capitalism of John D. The mutual business sabotage and political confrontations that characterized the nineteenth century gave way in the twentieth century to a more stable formation of statist and corporate alliances. The Rockefellers entered high politics where they promoted a mellow hybrid of ‘liberal Republicanism,’ they engaged in imperial philanthropy, and they financed an intricate web of research foundations that helped soften the harshness of capitalism. But the original virus nourished by John D. was unstoppable. Neoclassical ideology - or neo-liberalism, as it is now known - continued to spread throughout the globe. It programmed the technocrats from Santiago to Moscow. It placated the populace from China to South Africa. It reduced risk far better than any other organized religion. It helped open the world for business.” ("The Rockefeller Boys" by Bichler and Nitzan, www.bnarchive.net )

No wonder von-Hayek got a job in Chicago University in 1950. Hayek's disciple, Milton Friedman (1912-2006) a prominent "Chicago Boy" and mentor of President Reagan, wrote in his introduction to the 1994 edition of Von Hayek's book:

"The fall of the Berlin Wall (1989) the collapse of communism behind the 'Iron Curtain' (1989-1991) and the changing character of China have reduced the defenders of a Marxian type collectivism to a small hardy band concentrated in Western Universities. Today there is wide agreement that socialism is a failure, capitalism a success. Yet this apparent conversion of the intellectual community to what might be called a Hayekian view is deceptive. While the talk is about free markets and private property and it is more respectable than it was a few decades ago to defend near-complete laissez-faire, the bulk of the intellectual community almost automatically favors any expansion of government power so long as it is advertised as a way to protect individuals from big bad corporations, relieve poverty, protect the environment, or promote "equality". …Government intervention in the post WW2 period was smaller and less intrusive than it is today. President Johnson's "Great Society" programs, including Medi-care and Medicaid, and Bush's "Clean Air" and "Americans with Disabilities Acts" were all still ahead …Total government spending, federal state, and local, in the USA has gone from 25% of national Income in 1950 to 45% in 1993. Much the same has been true in Britain, in one sense more dramatically. The Labour party, formerly openly socialist, now defends free private markets. The Conservative Party, once content to administer Labor's socialist policies, has tried to reverse, and to some extent, under Margaret Thatcher has succeeded in reversing, the extent of government ownership and operation. … While there has been a considerable amount of "Privatisation" there as here, government today spends a larger fraction of the national income and is more intrusive than it was in 1950. On both sides of the Atlantic, it is only a little overstated to say that we preach individualism and competitive capitalism but practice socialism." (Friedman's introduction to "Road to Serfdom", University of Chicago Press, 1994, page xvi)

Friedman focused his intellectual efforts to refute John Maynard Keynes's economic theories which influenced many economists and politicians after WW2.

Keynes (1883-1946) advocated a mixed economy where both the state and the private sector play an important role. Keynesian economics challenged "Free Market" economics (economic theory based on the assumption that markets and private producers operate better on their own, without state intervention). In Keynes's theory, trends set by the government can shape the behaviour of individuals. Instead of the economic process being based on continuous increase of output as most classical economists had believed from the late 1700s on, Keynes argued that aggregate demand for goods is the driving force of the economy. He argued that government paid economic projects will boost demand in the entire economy, reduce unemployment and deflation. A central conclusion of Keynesian economics is that in an unplanned economy there is no automatic tendency for employment and output to rise and therefore the government must intervene to prevent a crisis. During economic recession the government can print money and fund its projects. After WW1 Keynes said: " The decadent international individualistic capitalism in the hands of which we found ourselves after the war (WW1 A.O.) is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods."

Keynes criticized individualistic capitalism, not capitalism itself. He advocated government intervention in the economy to protect capitalism, not to replace it. He never discussed the question: who produced all the wars? All supporters - and many opponents - of BB economies gloss over the shocking fact that it was BB economies trying to solve their unemployment crisis, to defeat their rivals, and to win new markets that produced WW1 and WW2, colonial wars, and Japan's conquests of Korea, Manchuria and China in the 1930s, the Spanish civil war ('36-'39). No socialized economy produced these wars. They were all products of BB economies.

US economist John Kenneth Galbraith (1908-2006) supported socialization of parts of the economy. In 1997 he gave a talk outlining his views. His lecture "Liberalism in America's Political Future," was part of Pittsburgh University's 'American Experience' lecture series. In USA “Liberalism” is equivalent to “Left” in European political jargon. Galbraith, 89, Harvard's Professor of Economics Emeritus, entered American public life in the time of Franklin Roosevelt's 'New Deal'. He was head of the World War II-era Office of Price Control while still in his 30s and at the end of the war directed the U.S. Strategic Bombing Survey, for which he was awarded the Medal of Freedom in 1946. He was an adviser on the election campaigns of Adlai Stevenson and John F. Kennedy, who later appointed him ambassador to India. He is the author of many books, best known for his classic, "The Affluent Society". To a crowd packed into David Lawrence Hall auditorium, Galbraith laid out an agenda for "socially concerned" people. He intertwined it with a critique of the market system economy, which, according to him, survives thanks to the "socially concerned" : "Capitalism in its original form was an insufferably cruel thing which produced militant criticism and opposition," said Galbraith, noting that only with tools like trade unions, laws protecting workers' health and rights, public health care, housing for the poor, pensions for the old, and compensation for the unemployed did capitalism become a viable economic system in a human society. Let us not be reticent. We the socially concerned are the custodians of the political tradition and action that saved capitalism from itself." Galbraith made his case for a responsible, yet humane, social policy. On the privatisation trend he said: "In recent years there has been a curb of thought which holds that all possible economic activity should now be returned to the market. The market system having been accepted, it must now be universal. Privatisation has now become a public thing. This, needless to say, we reject. The question of private versus government role in modern life is not to be decided in abstract theoretical problems. The decision depends on the merits of the particular case. Conservatives, people on the right, need to be warned, as we also warn ourselves, that ideology can be a heavy blanket over thought. Thought must guide action. The continuing flaws, inequities, and cruelties of the market system make it an unreliable provider of some services."

On the stock market boom he said: "We are presently witnessing a stock market boom for which we may be reasonably sure there will be an eventual day of reckoning"

On the Federal Reserve's efforts to rein in the economy: "We must not be in fear of a strong productive economic performance, but we must have well in mind the danger of excess. In good times, the public budget, taxes and expenditures must be a restraining force. So too, action against mergers and acquisitions and other manifestations of adverse, sometimes insane, corporate behaviour. Monetary restraint, hiring constraints may be in order. I will not comment further on my old friend Alan Greenspan." "We cannot be casual about inflation. If necessary, it must be restrained….What we do not accept is that an all-pervasive fear of inflation should arrest all economic progress."

On the balanced budget: "We accept the need for fiscal responsibility. This does not, however, mean an annually balanced budget. If I may be allowed a word on our country in particular, the balanced budget has, at the moment, become a major weapon in a larger attack on the poor. Borrowing for enhanced future return is just as legitimate for government as it is for corporations and individuals. The valid test is that increased debt should be in keeping with increased ability to pay. And that, indeed, is our present situation."

On unemployment: "The social loss in human distress of unemployment must be directly addressed. This means opportunity for alternative public employment in recession or depression. The social waste of idleness cannot be accepted."

On income distribution: "The market system distributes income in a highly unequal fashion, a matter on which the U.S., it is now recognized, has a world leadership. Our distribution of income is more unequal than that of any other major industrial country. Strong and effective unions, a humane minimum wage, social security, [and] good medical care are all part of the answer to the unequal distribution of income. So also a progressive income tax. On this, the socially concerned agree."

On taxes: "Few exercises in social argument are so obviously in Defence of financial self-interest as those put forward by the rich against their taxes. It always boils down to the slightly improbable case that the rich are not working as hard as they should because they have too little income, and the poor are not working as hard as they should because they have too much. Nothing contributes to energy and initiative in modern economy as the struggle by the affluent to maintain their after-tax income."

On education: "High professional competence, generous financing, and yes, wise, effective discipline must make and characterize the education that is available to all. The justification is not that a well-educated labour force enhances economic productivity, which is the respectable present case. It is, rather, that education enhances, enriches, and enlarges the enjoyment of life. That is the true justification." On welfare: "Let us recognize that in any welfare system there will be some abuse. Some people will not work. Let us recognize that in any university with tenure there are some people who discover that leisure is a wonderful thing. We don't condemn universities because this is true. Let us not condemn the poor because some also abuse the system". He surveyed the failure of a conservative Congress to achieve its agenda declaring: "Those who would reverse social action or even allow it to stagnate are not in conflict with the socially concerned. They are in conflict with the history; We are in line with history. It is our support. For that we should be both grateful and energetic." (Report by Fred Solomon, Dept. of University Relations)

To be accurate, throughout history all states have intervened in the economy in two ways: 1) They minted the money. 2) They kept armies and conducted wars, which required major spending by the state. So the question is not the state’s intervention in the economy but the nature of the state and the nature of its intervention.

Between total and minimal state participation we find views like Galbraith's, who said to Brian Lamb in an interview: "I react to what is necessary. I would like to eschew any formula. There are some things where the government is absolutely inevitable, which we cannot get along without comprehensive state action. But there are many things - producing consumer goods, producing a wide range of entertainment, producing a wide level of cultural activity - where the market system, with independent activity is also important, so I react pragmatically. Where the market works, I'm for that. Where the government is necessary, I'm for that. I'm deeply suspicious of somebody who says, "I'm in favor of privatization," or, "I'm deeply in favor of public ownership." I'm in favor of whatever works in the particular case. (Interview with Brian Lamb, Booknotes, C-SPAN (November 13, 1994)

Opponents of state participation in the economy ignore the fact that all states participate in their economy by minting money and paying for armies and wars. Armies must be fed, clad, housed and armed, this involves the economy. So do Wars

What is missing in all debates is a discussion on the nature of the state that participates in the economy. What kind of State is it? What is its authority structure? Who decides policy and what is the aim? Clearly, participation in the economy by the British state in 1945 differed from that of Thatcher forty years later. These are not the only options. The British sociologist Richard Titmuss replied to the charges of inefficiency leveled against government-run enterprises by a detailed research comparing economics of blood markets in Britain and the USA. In Britain the blood market is run by the government and supplied by voluntary donors donating their blood for free. In the USA the entire blood-market is commercialized. Donors, administrators and personnel do it for money. The blood market supplies all hospitals with blood and is a major component in any health system. In 1970 Titmuss published his research in a book entitled “The gift relationship”. His conclusion is as follows: “On four testable - non-ethical - criteria, the commercialized blood market is bad. 1) In terms of economic efficiency it is highly wasteful of blood: shortages - chronic and acute - characterize the supply and demand position and make illusory the concept of equilibrium. 2) It is administratively inefficient and results in more bureaucratization, and much greater administrative, accounting and computing overheads. 3) In terms of price per unit of blood to the patient (or consumer) it is a system which is five to fifteen times more costly than the voluntary system in Britain, and finally, 4) in terms of quality, commercial blood markets are much more likely to distribute contaminated blood. The risks for the patient of disease and death are substantially greater.” (“The gift relationship” Titmuss, new edition by The New Press, New York,. 1997, p.314)

One can argue against Titmuss that producing blood does not require people’s effort, skill, or time, and therefore many can afford to donate it whereas very few would agree to work for free in a factory. But his point that economics and politics - unlike physics or chemistry - are linked to moral choices remains valid. Today [2007] proposals for Privatisation include even prisons, so one can ask - why not privatize the Army? The police? The Courts? Parliament? Government?

Private armies of mercenaries already exist in Africa. Some governments there have hired them and are satisfied with their cost-effectiveness balance. Suppose private armies turn out to be cheaper and more effective than armies of conscripts, or volunteers -- should armies be privatized? If so why not privatize the State itself? Privatisation Vs. nationalisation” debates use profitability as the ultimate criterion. Must all economic activity be evaluated only by profitability, excluding its role as a public service? "BG Vs. BB" debates discuss two ways of running the economy - by the "State" or by private entrepreneurs. They never discuss the nature of the State itself. They assume a State will always be rule by representatives. No one has suggested a State where all citizens can propose and vote on all policies. This new possibility changes the "BB Vs BG" debate from one on the nature of the economy to one on the nature of the State. Most people resent both big business and big government and see no other option. However, the Internet and mobile phones present a new option - a State where all citizens can propose-debate-vote on every issue of society. This is neither rule by big business nor rule by big government but direct democracy. Though this option deserves to be discussed it is a safe bet that supporters of BB and BG will do all they can to exclude it from the debate.

Much of today's economy is shaped by multinational corporations and Banks which local governments cannot control. Coordinated legislation by DD states and employees' DD within such corporations can subordinate their activity to DD control.