Monday, December 31, 2007

Pakistan at Sixty

LRB 4 October 2007
by Tariq Ali

Pakistan is best avoided in August, when the rains come and transform the plains into a huge steam bath. When I lived there we fled to the mountains, but this year I stayed put. The real killer is the humidity. Relief arrives in short bursts: a sudden stillness followed by the darkening of the sky, thunderclaps like distant bombs and then the hard rain. Rivers and tributaries quickly overflow; flash floods make cities impassable. Sewage runs through slums and posh neighbourhoods alike. Even if you go straight from air-conditioned room to air-conditioned car you can’t completely escape the smell. In August sixty years ago, Pakistan was separated from the subcontinent. This summer, as power appeared to be draining away from Pervez Musharraf, the country’s fourth military dictator, it was instructive to observe the process at first hand.

Disillusionment and resentment are widespread. Cultivating anti-Indian/anti-Hindu feeling, in an attempt to encourage national cohesion, no longer works. The celebrations marking the anniversary of independence on 14 August are more artificial and irritating than ever. A cacophony of meaningless slogans that impress nobody, countless clichés in newspaper supplements competing for space with stale photographs of the Founder (Muhammad Ali Jinnah) and the Poet (Iqbal). Banal panel discussions remind us of what Jinnah said or didn’t say. The perfidious Lord Mountbatten and his ‘promiscuous’ wife, Edwina, are denounced for favouring India when it came to the division of the spoils. It’s true, but we can’t blame them for the wreck Pakistan has become. In private, of course, there is much soul-searching, and a surprising collection of people now feel the state should never have been founded.

Several years after the split with Bangladesh in 1971 I wrote a book called Can Pakistan Survive? for Penguin. It was publicly denounced and banned by the dictator of the day, General Zia-ul-Haq, but pirated in many editions. I had argued that if the state carried on in the same old way, some of the minority provinces left behind might also defect, leaving the Punjab alone, strutting like a cock on a dunghill. Many of those who denounced me as a traitor and a renegade are now asking the same question. It’s too late for regrets, I tell them. The country is here to stay. And it’s not religion or the mystical ‘ideology of Pakistan’ that guarantees its survival, but its nuclear capacity and Washington.

On the country’s 60th birthday (as on its 20th and 30th anniversaries), an embattled military regime is fighting for its survival. There is a war on its western frontier, while at home it is being tormented by jihadis and judges. None of this seemed to make much difference to the young men on motorbikes who took over the streets of Lahore in their annual suicide race. It seems the only thing worth celebrating is the right to die. Only five managed it this year, a much lower figure than in the previous five years. Maybe this is a rational way to mark a conflict in which more than a million people hacked each other to death as the decaying British Empire prepared to scuttle off home. On the eve of Partition a cabinet meeting in London was devoted to the growing crisis in India. The minutes reported: ‘Mr Jinnah was very bitter and determined. He seemed to the secretary of state like a man who knew that he was going to be killed and therefore insisted on committing suicide to avoid it.’ He was not alone.

Now yet another uniformed despot was taking the salute at a military parade to mark independence day in Islamabad, mouthing a bad speech written by a bored bureaucrat that failed to stifle the yawns of the surrounding sycophants. Even the F-16s in proud formation failed to excite the audience. Flags were waved by schoolchildren, a band played the national anthem, the whole show was broadcast live and then it was over.

The European and North American papers give the impression that the main, if not the only, problem confronting Pakistan is the power of the bearded fanatics skulking in the Hindu Kush, who as the papers see it are on the verge of taking over the country. In this account, all that stops a jihadi finger finding the nuclear trigger is Musharraf. Alas, it now seems he might drown in a sea of troubles and so the helpful State Department has pushed out an over-inflated raft in the shape of Benazir Bhutto.

In fact, the threat of a jihadi takeover of Pakistan is remote. There is no possibility of a takeover by religious extremists unless the army wants one, as in the 1980s, when General Zia-ul-Haq handed over the Ministries of Education and Information to the Jamaat-e-Islami, with dire results. There are serious problems confronting Pakistan, but these are usually ignored in Washington, by both the administration and the financial institutions. The lack of a basic social infrastructure encourages hopelessness and despair, but only a tiny minority turns to jihad.

During periods of military rule in Pakistan three groups get together: military leaders, a corrupt claque of fixer-politicians, and businessmen eyeing juicy contracts or state-owned land. The country’s ruling elite has spent the last sixty years defending its ill-gotten wealth and privilege, and the Supreme Leader (uniformed or not) is invariably intoxicated by their flattery. Corruption envelops Pakistan. The poor bear the burden, but the middle classes are also affected. Lawyers, doctors, teachers, small businessmen, traders are crippled by a system in which patronage and bribery are trump cards. Some escape – there are 20,000 Pakistani doctors working in the United States alone – but others come to terms with the system, accept compromises that make them deeply cynical about themselves and everyone else.

The resulting moral vacuum is filled by porn films and religiosity of various sorts. In some areas religion and pornography go together: the highest sales of porn videos are in Peshawar and Quetta, strongholds of the religious parties. Taliban leaders in Pakistan target video shops, but the dealers merely go underground. Nor should it be imagined that the bulk of the porn comes from the West. There is a thriving clandestine industry in Pakistan, with its own local stars, male and female.

Meanwhile the Islamists are busy picking up supporters. The persistent and ruthless missionaries of Tablighi Jamaat (TJ) are especially effective. Sinners from every social group, desperate for purification, queue to join. TJ headquarters in Pakistan are situated in a large mission in Raiwind. Once a tiny village surrounded by fields of wheat, corn and mustard seed, it is now a fashionable suburb of Lahore, where the Sharif brothers built a Gulf-style palace when they were in power in the 1990s. The TJ was founded in the 1920s by Maulana Ilyas, a cleric who trained at the orthodox Sunni seminary in Deoband, in Uttar Pradesh. At first, its missionaries were concentrated in Northern India, but today there are large groups in North America and Western Europe. The TJ hopes to get planning permission to build a mosque in East London next to the Olympic site. It would be the largest mosque in Europe. In Pakistan, TJ influence is widespread. Penetrating the national cricket team has been its most conspicuous success: Inzamam-ul-Haq and Mohammed Yousuf are activists for the cause at home while Mushtaq Ahmet works hard in their interest in Britain. Another triumph was the post-9/11 recruitment of Junaid Jamshed, the charismatic lead singer of Pakistan’s first successful pop group, Vital Signs. He renounced his past and now sings only devotional songs – naats.

The Tablighis stress their non-violence and insist they are there merely to broadcast the true faith in order to help people find the correct path in life. This may be so, but it is clear that some younger male recruits, bored with all the dogma, ceremonies and ritual, are more interested in getting their hands on a Kalashnikov. Many believe that the Tablighi missionary camps are fertile recruiting grounds for armed groups active on the Western Frontier and in Kashmir.

The establishment has been slow to challenge the interpretation of Islam put forward by groups such as Tablighi. Musharraf advised people to go and see Khuda Kay Liye (‘In the Name of God’), a new movie directed by Shoaib Mansoor (who wrote and produced some of Vital Signs’ most successful music). This may not help the film, or the moderate Islam it favours, given that Musharraf’s popularity ratings currently trail Osama bin Laden’s, according to a recent poll, but I went to a matinee performance in Lahore and the cinema was packed with young people. The film is well intentioned, also long-winded and crude. It has, however, had an impact. At least it tries out a few ideas, which is unheard of in a country where the film industry produces nothing but Bollywood-style dross, even if the ideas are limited to the good Muslim, bad Muslim stereotype. Jihadi violence is bad. Music is good and not anti-Islamic. Violence and rape in the badlands of the Pakistan-Afghan frontier are intercut with scenes in a post-9/11 United States, where an innocent Pakistani musician is lifted by intelligence operatives and tortured (these scenes go on far too long). The implication is that each side feeds on the other. It is a prim film and the row of youths sitting behind me clearly wanted some more action on the sex front. When a white female student in Chicago gives the Pakistani musician a present, one of them commented: ‘She’s giving him her phone number.’ If the ushers hadn’t told the youths to keep quiet I might have enjoyed the film more.

One of the main threats to Musharraf’s authority is the country’s judiciary. On 9 March, Musharraf suspended Iftikhar Muhammad Chaudhry, the chief justice of the Supreme Court, pending an investigation. The accusations against him were contained in a letter from Naeem Bokhari, a Supreme Court advocate. Curiously, the letter was widely circulated – I received a copy via email. I wondered whether something was afoot, but decided the letter was just sour grapes. Not so: it was part of a plan. After a few personal complaints, extravagant rhetoric took over:

My Lord, the dignity of lawyers is consistently being violated by you. We are treated harshly, rudely, brusquely and nastily. We are not heard. We are not allowed to present our case. There is little scope for advocacy. The words used in the Bar Room for Court No. 1 are ‘the slaughter house’. We are cowed down by aggression from the Bench, led by you. All we receive from you is arrogance, aggression and belligerence.

The following passage should have alerted me to what was really going on:

I am pained at the wide publicity to cases taken up by My Lord in the Supreme Court under the banner of Fundamental Rights. The proceedings before the Supreme Court can conveniently and easily be referred to the District and Sessions Judges. I am further pained by the media coverage of the Supreme Court on the recovery of a female. In the Bar Room, this is referred to as a ‘media circus’.

The chief justice was beginning to embarrass the regime. He had found against the government on a number of key issues, including the rushed privatisation of the Pakistan Steel Mills in Karachi, a pet project of Prime Minister Shaukat (‘Shortcut’) Aziz. The case was reminiscent of Yeltsin’s Russia. Economists had estimated that the industry was worth $5 billion. Seventy-five per cent of the shares were sold for $362 million in a 30-minute auction to a friendly consortium consisting of Arif Habib Securities (Pakistan), al-Tuwairqi (Saudi Arabia) and the Magnitogorsk Iron & Steel Works Open JSC (Russia). The privatisation wasn’t popular with the military, and the retiring chairman, Haq Nawaz Akhtar, complained that ‘the plant could have fetched more money if it were sold as scrap.’ The general perception was that the president and prime minister had helped out their friends. A frequenter of the Stock Exchange told me in Karachi that Arif Habib Securities (which owns 20 per cent) was set up as a front company for Shaukat Aziz. The Saudi steel giant (40 per cent) is reputedly on very friendly terms with Musharraf, who turned up to open a steel factory set up by the group on 220 acres of land rented from the adjoining Pakistan Steel Mills. Now they own it all.

After the Supreme Court insisted that ‘disappeared’ political activists be produced in court and refused to dismiss rape cases, there were worries in Islamabad that the chief justice might even declare the military presidency unconstitutional. Paranoia set in. Measures had to be taken. The general and his cabinet decided to frighten Chaudhry by suspending him. The chief justice was kept in solitary confinement for several hours, manhandled by intelligence operatives, and traduced on state television. But instead of caving in and accepting a generous resignation settlement, the judge insisted on defending himself, triggering a remarkable movement in defence of an independent judiciary. This is surprising. Pakistani judges are notoriously conservative and have legitimised every coup with a bogus ‘doctrine of necessity’ ruling (although some did refuse to swear an oath of loyalty to Musharraf).

When I visited Pakistan in April the protests were getting bigger every day. Initially confined to the country’s 80,000 lawyers and several dozen judges, unrest soon spread beyond them, which was unusual in a country whose people have become increasingly alienated from elite rule. But the lawyers were marching in defence of the constitutional separation of powers. There was something delightfully old-fashioned about this struggle: it involved neither money nor religion, but principle. Careerists from the opposition (some of whom had organised thuggish assaults on the Supreme Court when in power) tried to make the cause their own. ‘Don’t imagine they’ve all suddenly changed,’ Abid Hasan Manto, one of the country’s most respected lawyers, told me. ‘On the other hand, when the time comes almost anything can act as a spark.’

It soon became obvious to most people in the Islamabad bureaucracy that they had made a gigantic blunder. But as often happens in a crisis, instead of acknowledging this and moving to correct it, the perpetrators decided on a show of strength. The first targets were independent TV channels. In Karachi and other cities in the south three channels suddenly went dark as they were screening reports on the demonstrations. There was popular outrage. On 5 May Chaudhry drove from Islamabad to give a speech in Lahore, stopping at every town en route to meet supporters; it took 26 hours to complete a journey that should take four or five. In Islamabad they plotted a counter-strike.

The judge was due to visit Karachi, the country’s largest city, on 12 May. Political power here rests in the hands of the MQM (Muttahida Qaumi Movement/United National Movement), an unsavoury outfit created during a previous dictatorship and notorious for its involvement in protection rackets and other kinds of violence. It has supported Musharraf loyally through every crisis. Its leader, Altaf Hussain, guides the movement from a safe perch in London, fearful of retribution from his many opponents were he to return. In a video address to his followers in Karachi he said: ‘If conspiracies are hatched to end the present democratically elected government then each and every worker of MQM . . . will stand firm and defend the democratic government.’ It was typical of him. On Islamabad’s instructions, the MQM leaders decided to prevent the judge addressing the meeting in Karachi. He was not allowed to leave the airport. His supporters in different parts of the city were assaulted. Almost fifty people were killed. After footage of the violence was screened on Aaj TV, the station was attacked by armed MQM volunteers, who shot at the building for six whole hours and set cars in the parking lot on fire.

The management of the TV station mysteriously failed to reach senior police officers, the chief minister or the governor. People understood why, and a successful general strike followed, which further isolated the regime. A devastating report, Carnage in Karachi, published in August by the Human Rights Commission of Pakistan, confirmed in great detail what everyone already knew: the police and army had been ordered to stand by while armed MQM members went on the rampage.

Musharraf, trying desperately to keep a grip on the country, had no alternative but to sound the retreat. The chief justice’s appeal against his suspension was finally admitted and heard by the Supreme Court. On 20 July a unanimous decision was made to reinstate him, and shamefaced government lawyers were seen leaving the precinct in a hurry. A reinvigorated court got down to business. Hafiz Abdul Basit was a ‘disappeared’ prisoner accused of terrorism. The chief justice summoned Tariq Pervez, the director-general of Pakistan’s Federal Investigation Agency, and asked him politely where the prisoner was being kept. Pervez replied that he had no idea and had never heard of Basit. The chief justice instructed the police chief to produce Basit in court within 48 hours: ‘Either produce the detainee or get ready to go to jail.’ Two days later Basit was produced and then released, after the police failed to present any substantial evidence against him. Washington and London were not happy. They were convinced that Basit was a terrorist who should have been kept in prison indefinitely, as he certainly would have been in Britain or the US.

The Supreme Court is currently considering six petitions challenging Musharraf’s decision to contest the presidency without relinquishing his command of the army. There is much nervousness in Islamabad. The president’s supporters are threatening dire consequences if the court rules against him. But to declare a state of emergency would require the support of the army, and I was told that informal soundings had revealed a reluctance to intervene on the part of the generals. Their polite excuse was that they were too heavily committed to the ‘war on terror’ to be able to preserve law and order in the cities.

As the judicial crisis temporarily ended, a more sombre one loomed. Most of today’s jihadi groups are the mongrel offspring of Pakistani and Western intelligence outfits, born in the 1980s when General Zia was in power and waging the West’s war against the godless Russians, who were then occupying Afghanistan. That is when state patronage of Islamist groups began. One cleric who benefited was Maulana Abdullah, who was allotted land to build a madrassa in the heart of Islamabad, not far from the government buildings. Soon the area was increased so that two separate facilities (for male and female students) could be constructed, together with an enlarged Lal Masjid, or Red Mosque. State money was provided for all this, and the government is the technical owner of the property.

During the 1980s and 1990s this complex became a transit camp for young jihadis on their way to fight in Afghanistan and, later, Kashmir. Abdullah made no secret of his beliefs. He was sympathetic to the Saudi-Wahhabi interpretation of Islam and during the Iraq-Iran war was only too happy to encourage the killing of Shia ‘heretics’ in Pakistan. It was his patronage of ultra-sectarian, anti-Shia terror groups that led to his assassination in October 1998. Members of a rival Muslim faction killed him soon after he had finished praying in his own mosque.

His sons, Abdul Rashid Ghazi and Abdul Aziz, then took control of the mosque and religious schools. The government agreed that Aziz would lead the Friday congregation and preach the weekly sermon after Friday prayers. His sermons were often supportive of al-Qaida, though he was more careful about his language after 9/11. Senior civil servants and military officers often attended Friday prayers. The better-educated and soft-spoken Rashid, with his lean, haggard face and ragged beard, was left to act as spin-doctor. He was wheeled on to charm visiting foreign or local journalists, and did it well.

But after November 2004, when the army, under heavy US pressure, launched an offensive in the tribal areas bordering Afghanistan, relations between the brothers and the government became tense. Aziz in particular was livid. He might not have done anything about it, but, according to Rashid, ‘a retired colonel of the Pakistan Army approached us with a written request for a fatwa clarifying the Sharia perspective on the army waging a war on the tribal people.’ Aziz did not waste any time. He issued a fatwa declaring that the killing of its own people by a Muslim army is haram (‘forbidden’), ‘that any army official killed during the operation should not be given a Muslim burial’ and that ‘the militants who die while fighting the Pakistan Army are martyrs.’ Within days of its publication the fatwa had been publicly endorsed by almost five hundred ‘religious scholars’. Despite heavy pressure from the mosque’s patrons in the ISI, Pakistan’s military intelligence, the brothers refused to withdraw the fatwa. The government response was surprisingly muted. Aziz’s official status as the mosque’s imam was ended and an arrest warrant issued against him, but it was never served and the brothers were allowed to carry on as usual. Perhaps the ISI thought they might still prove useful.

Earlier that year the government claimed it had uncovered a terrorist plot to bomb military installations, including the GHQ and other state buildings, on 14 August. Machine-guns and explosives were found in Abdul Rashid Ghazi’s car. New warrants were issued against the brothers and they were arrested. At this point, the religious affairs minister, Ijaz-ul-Haq, General Zia’s son, persuaded his colleagues to pardon the clerics in return for a written apology pledging that they wouldn’t become involved in the armed struggle. Rashid claimed the whole plot had been scripted to please the West and in a newspaper article asked the religious affairs minister to provide proof that he had given the undertaking the minister had supposedly asked for. There was no response.

In January this year, the brothers decided to shift their focus from foreign to domestic policy and demanded an immediate implementation of Sharia law. Until then they had been content to denounce US policies in the Muslim world and America’s local point-man Musharraf for helping dismantle the Taliban government in Afghanistan. They did not publicly support the three attempts made on Musharraf’s life, but it was hardly a secret that they regretted his survival. The statement they issued in January was intended as an open provocation to the regime. Aziz spelled out his programme: ‘We will never permit dance and music in Pakistan. All those interested in such activities should shift to India. We are tired of waiting. It is Sharia or martyrdom.’ They felt threatened by the government’s demolition of two mosques that had been built illegally on public land. When they received notices announcing the demolition of parts of the Red Mosque and the women’s seminary the brothers dispatched dozens of women students in black burqas to occupy a children’s library next to their seminary. The intelligence agencies appeared to be taken aback, but quickly negotiated an end to the occupation.

The brothers continued to test the authorities. Sharia was implemented and there was a public bonfire of books, CDs and DVDs. Then the women from the madrassa directed their fire against Islamabad’s up-market brothels, targeting Aunty Shamim, a well-known procuress who provided ‘decent’ girls for indecent purposes, and whose clients included the local great and good (a number of them moderate religious leaders). Aunty ran the brothel like an office: she kept office hours and shut up shop at midday on Friday so that clients could go to the nearest mosque, which happened to be the Lal Masjid. The morality brigades raided the brothel and ‘freed’ the women. Most of the girls were educated, some were single parents, others were widows, all were desperately short of funds. The office hours suited them. Aunty Shamim fled town, and her workers sought similar employment elsewhere, while the madrassa girls celebrated an easy victory.

Emboldened by their triumph, they decided to take on Islamabad’s posh massage parlours, not all of which were sex joints, and some of which were staffed by Chinese citizens. Six Chinese women were abducted in late June and taken to the mosque. The Chinese ambassador was not pleased. He informed President Hu Jintao, who was even less pleased, and Beijing made it clear that it wanted its citizens freed without delay. Government fixers arrived at the mosque to plead the strategic importance of Sino-Pakistan relations, and the women were released. The massage industry promised that henceforth only men would massage other men. Honour was satisfied, even though the deal directly contradicted the message of the Koran. The liberal press depicted the anti-vice campaign as the Talibanisation of Pakistan, which annoyed the Lal Masjid clerics. ‘Rudy Giuliani, when he became mayor of New York, closed the brothels,’ Rashid said. ‘Was that also Talibanisation?’

Angered and embarrassed by the kidnapping of the Chinese women, Musharraf demanded a solution. The Saudi ambassador to Pakistan, Ali Saeed al-Awad Asseri, arrived at the mosque and spent ninety minutes with the brothers. They were welcoming but told him all they wanted was the implementation of Saudi laws in Pakistan. Surely he agreed? The ambassador declined to meet the press after the visit, so his response remains unrecorded. His mediation a failure, Plan B was set in motion.

On 3 July, the paramilitary Rangers began to lay barbed wire at the end of the street in front of the mosque. Some madrassa students opened fire, shot a Ranger dead, and for good measure torched the neighbouring Environment Ministry. Security forces responded the same night with tear gas and machine-guns. The next morning the government declared a curfew in the area and the week-long siege of the mosque began, with television networks beaming images across the world. Rashid must have been pleased. The brothers thought that keeping women and children hostage inside the compound might save them. But some were released and Aziz was arrested as he tried to escape in a burqa. On 10 July, paratroopers finally stormed the complex. Abdul Rashid Ghazi and at least a hundred others died in the ensuing clashes. Eleven soldiers were also killed and more than forty wounded. Several police stations were attacked and there were ominous complaints from the Tribal Areas. Maulana Faqir Mohammed, a leading Taliban supporter, told thousands of armed tribesmen: ‘We beg Allah to destroy Musharraf and we will seek revenge for the Lal Masjid atrocities.’ This view was reiterated by Osama bin Laden, who declared Musharraf an ‘infidel’ and said that ‘removing him is now obligatory.’

I was in Karachi in the last week of August, when suicide bombers hit military targets, among them a bus carrying ISI employees, to avenge Rashid’s death. In the country as a whole the reaction was muted. The leaders of the MMA, a coalition of religious parties that governs the Frontier province and shares power in Baluchistan, made ugly public statements, but took no action. Only a thousand people marched in the demonstration called in Peshawar the day after the deaths. This was the largest protest march, and even here the mood was subdued. There was no shrill glorification of the martyrs. The contrast with the campaign to reinstate the chief justice could not have been more pronounced. Three weeks later, more than 100,000 people gathered in the Punjabi city of Kasur to observe the 250th anniversary of the death of the great 17th-century poet Bulleh Shah, one in a distinguished line of Sufi poets who denounced organised religion and orthodoxy. For him a mullah could be compared to a barking dog or a crowing cock.

The fact is that jihadis are not popular in most of Pakistan, but neither is the government. The Red Mosque episode raised too many unanswered questions. Why did the government not act in January? How did the clerics manage to accumulate such a large store of weapons without the knowledge of the government? Was the ISI aware that an arsenal was concealed inside the mosque? If so, why did they keep quiet? What was the relationship between the clerics and government agencies? Why was Aziz released and allowed to return to his village without being charged? Has the state decided to relinquish its monopoly of violence?

A lot of this has to do with Afghanistan. The failure of the Nato occupation has revived the Taliban as well as the trade in heroin and has destabilised north-western Pakistan. Indiscriminate bombing raids by US planes have killed too many innocent civilians, and the culture of revenge remains strong in the region. The corruption and cronyism of the Karzai government have alienated many Afghans, who welcomed the toppling of Mullah Omar and hoped for better times. Instead, they have witnessed land-grabs and the construction of luxury villas by Karzai’s colleagues. And there are persistent rumours that Karzai’s younger brother, Ahmad Wali Karzai, has become one of the biggest drug barons in the country. The Pashtun tribes have never recognised the Durand Line, the border between Pakistan and Afghanistan imposed by the British. And so when guerrillas flee to the tribal areas under Pakistani control they are not handed over to Islamabad, but fed and clothed till they go back to Afghanistan or are protected like the al-Qaida leaders. Washington feels that Musharraf’s deals with tribal elders border on capitulation to the Taliban and is angry because Pakistani military actions are paid for by the US and they feel they aren’t getting value for money. This is not to mention the $10 billion Pakistan has received since 9/11 for signing up to the ‘war on terror’.

The problem is that some elements in Pakistani military intelligence feel that they will be able to take Afghanistan back once Operation Enduring Freedom has come to an end. For this reason they refuse to give up their links with the guerrilla leaders. They even think that the US might one day favour such a policy. I doubt whether this could happen: Iranian influence is strong in Herat and western Afghanistan; the Northern Alliance receives weapons from Russia and India is the major regional power. A stable settlement will have to include a regional guarantee of Afghan stability and the formation of a national government after Nato withdrawal.

Even if Washington accepted a cleaned-up version of the Taliban, the other countries involved would not, and a new set of civil conflicts could only lead to disintegration. Were this to happen, the Pashtuns on both sides of the Durand Line might opt to create their own state. It sounds far-fetched today, but what if the confederation of tribes that is Afghanistan were to split up into statelets, each under the protection of a larger power?

Back in the heart of Pakistan the most difficult and explosive issue remains social and economic inequality. This is not unrelated to the increase in the number of madrassas. If there were a half-decent state education system, poor families might not feel the need to hand over a son or daughter to the clerics in the hope that at least one child will be clothed, fed and educated. Were there even the semblance of a health system many would be saved from illnesses contracted as a result of fatigue and poverty. No government since 1947 has done much to reduce inequality. The notion that the soon-to-return Benazir Bhutto, perched on Musharraf’s shoulder, equals progress is as risible as Nawaz Sharif imagining that millions of people would turn out to receive him when he arrived at Islamabad airport last month. A general election is due later this year. If it is as comprehensively rigged as the last one was, the result will be increased alienation from the political process. The outlook is bleak. There is no serious political alternative to military rule.

I spent my last day in Karachi with fishermen in a village near Korangi creek. Shortcut Aziz has signed away the mangroves where shellfish and lobsters flourish, and land is being reclaimed to build Diamond City, Sugar City and other monstrosities on the Gulf model. The fishermen have been campaigning against these encroachments, but with little success. ‘We need a tsunami,’ one of them half-joked. We talked about their living conditions. ‘All we dream of is schools for our children, medicines and clinics in our villages, clean water and electricity in our homes,’ one woman said. ‘Is that too much to ask for?’ Nobody even mentioned religion.

Tariq Ali’s The Duel: Pakistan on the Flight Path of American Power will be published next year.

The Austrailian Elections

Tom Nairn
LRB 13 December 2007Tom Nairn

On voting day I took the Melbourne tram downtown, stopping only to glance in a bookseller’s window. It was good to see Peter Temple’s The Broken Shore holding its place in the bestseller list. 1 A good cop yarn set in Victoria, stylistically it is West Coast American, and has been received well there. But that’s not why it’s so popular here. The book sets out to display, often brutally, just what Robert Hughes’s ‘fatal shore’ has become: a terrain beset by identity dilemmas and querulous uncertainty. Who dunnit? Well, everybody, in one way or another. Temple’s Joe Cashin fights his way through gangsters and bent cops to reveal Melbourne as the capital of paedophilia, as well as of southern hemisphere organised crime. Down these mean tourist routes a man must go, who is not himself mean, who is neither tarnished nor afraid. The battered policeman from Port Monro (a fictive place somewhere down Great Ocean Road) finds himself searching for an answer far beyond his culprit – and so do the readers, presumably.

Identity lurks between the lines, and surfaces in every punch-up and revelation. Australians don’t tire of reading about this. Recently, there have been three other remarkable versions of essentially the same tale: Kate Grenville’s The Secret River,2 Thomas Keneally’s The Commonwealth of Thieves3 and Alexis Wright’s Carpentaria.4 The mystery of the stolen continent. Naturally, Australian readers know in advance who did it – and in a sense are still doing it. Newcomers took the country from the previous inhabitants, now often called ‘First Australians’ rather than ‘Aborigines’. Hence the point must lie in reimagining the machinery of cohabitation and – more important – in an ever present, questioning epilogue: what’s to be done? Australia was ‘the greatest country on earth’ throughout the recent federal election campaign. Sure, but what (in Benedict Anderson’s inexhaustible phrase) about its ‘imagined community’, its sense of itself? Is community in that overarching sense possible when an unhealed wound remains?

Not long before the vote, the point was cruelly rubbed in. John Howard’s Liberal-Coalition government made the unusual decision to invade its own country, by sending the Australian Defence Force into the Northern Territory. His aim was to deal decisively with concerns about child abuse and corruption among the mainly Aboriginal population. In The Broken Shore the cop-hero repeatedly finds his inquiries sidetracked by crazed ideas about native Australians (‘Bongs’) being responsible for most crimes and complaints. He gets somewhere only by disregarding such delusions. But Howard wasn’t so smart. Instead, his campaign of what one important study has called ‘coercive reconciliation’ led right on to the decisive defeat of 24 November.5 He forfeited even his own constituency, as did Mal Brough, the minister for families, community services and indigenous affairs, who was directly in charge of the military intervention.

Are identity dilemmas just a hobby-horse for intellectuals and academics? Six weeks before the election I attended a meeting in Brunswick Town Hall, an inner suburb of Melbourne. It was to be addressed by the Aboriginal leader Patrick Dodson, on the theme of reconciliation. Knowing the unpunctuality of left-wing events, I put off driving down Sydney Road until a quarter of an hour before the talk was due to start: a bad mistake. It took twenty minutes to get through the queues and find somewhere to stand, or rather crouch.

Dodson is splendid in appearance as well as oratory, a prophetic white beard underlining his main argument, that Australia should try and emulate Mandela’s South Africa by setting up commissions to work out reconciliation – and, by implication, to revise the historical understanding that has travestied such problems. Comparatively few Native Australians were present, but the Anglo-Celt-Euro audience was totally absorbed. Something was really on their minds. I imagine they nearly all voted Labor on 24 November. As Thomas Keneally put it in The Age a couple of weeks before the election, this vote should have been on something crucial, and not just Kyoto or global warming in the abstract. The populations around the greatest desert in the world are fearful that climate change will let the desert destroy them, amid mainly unresolved problems – including the key one Dodson was addressing.

By contrast, the election campaign instructed them firmly to stop worrying about all that. Time for change? Well, possibly. In an Australian Financial Review article, the former Labor leader Mark Latham maintained that the last year has been marked by a crippling ‘convergence’ between the Liberal-National alliance and Labor. Just as Blairism took over so much of Thatcherism, so the new Australian prime minister, Kevin Rudd, has been striving to appear even more moderate, business-oriented and pro-American than Howard. Despairing media critics baptised it ‘Me-tooism’, and the result was a campaign setting new standards of witless boredom.

Four days before the vote, my morning latte and toast was droned over by an ABC interview with the Labor finance spokesman, Wayne Swan. Denouncing the Coalition finance minister, Peter Costello, as a reckless spendthrift, he promised his party would be more ‘economically conservative’ (his actual words) than the outgoing neoliberals, and never spend a single cent more than was in the household purse. Most November mornings, I’ve found myself waking up in the grip of a daft dream-notion: Gordon Brown must be behind all this. Does he need a soulmate on the other side of the earth so badly? Kevin Rudd, too, is a politico-intello often caught reading books, who can write uplifting essays based on them, and even speaks good Chinese. His best-known writing is probably on Dietrich Bonhoeffer, claimed as his inspiration just before he was made Labor leader.

The best daily election coverage came from, which acknowledged the wish for a change of government but complained that nobody could imagine what that change might amount to. Between that wish and this election result the shadow has fallen. That is, a conspiracy to prevent Australia’s imagined community of culture from infecting a political order founded on keeping it in its place. Canberra doesn’t only have a stiff upper lip: neoliberal propriety seems to have added steel braces to its Anglo-Celtic heritage. It is now keeping the lid on things by means of a ‘realism’ wholly identified with competence and sound economic management. A Brownish fog had materialised Down Under well before the vote.

This is why it all proved too much for Keneally. Driven to ask in his Age article why political life has forsaken republicanism since the referendum of 1999, he pointed out that clinging to the UK monarchy is a way of keeping everything else unchanged as well. The Anglo-Celtic heritage now desperately needs every symbol and relic it can find. The society so vividly portrayed in Robert Hughes’s Fatal Shore (1987) hasn’t disappeared, Keneally contends – it’s simply sat upon. ‘In all the justifiable concentration on other matters,’ he adds, ‘it is worthwhile remarking that after 220 years of loyalty to the British Crown, the very last of the avowed Queen’s men, John Winston Howard, will soon be passing from power by electoral defeat or party handover.’

Won’t that make some difference, given that ‘we know from polls that a majority of Australians will not choose to see their sovereignty reside in Prince Charles’? Only if the whingeing latte-sippers and culture-heads get their act together for another push against the system. Penal colonisation has given way to ‘independent’ self-colonisation. Keneally points out that the 1999 referendum on the monarchy turned into a popular revolt against the system of two-party professional politicos. Neither old nor new immigrants could stand the idea that they (and not ordinary voters) would award themselves still more power by appointing a president. It’s true that Kevin Rudd has indicated a wish to reopen the republican door. But how far? Is there really a chance of an Irish-style popular-vote presidency, as Keneally would like? Or would it be another establishment face-saver, leaving Charles and Camilla in with a chance?

In Coercive Reconciliation, Patrick Dodson considers the ‘unfinished business’ of reconciliation, and points out that ‘symbolic’ recognition at constitutional level would be highly practical in reality, believing it would help those in ‘that vast new region of northern and central Australia where Indigenous people maintain their languages, own their traditional lands under Western legal title, and practise their customs while seeking to survive on public sector programmes whose poor design has resulted in entrenched dependency’. This is the world depicted in vivid detail by Wright’s Carpentaria.

Later in Coercive Reconciliation, Guy Rundle argues that Howard’s ‘military humanitarianism’ has both pushed the issue to crisis point, and given a new opportunity for it to be tackled. The European occupation of Australia had the effect of decisively interrupting indigenous evolution towards forms of nation and statehood – thrusting them aside, in effect, and creating in the longer run an inevitable dilemma of readjustment and recognition. Thus ‘reconciliation’ is less a moral posture than a necessity. There can be a viable ‘identity’ only where common assumptions inform an emergent common will.

And, of course, that’s the problem on the new government’s doorstep. A non-military humanitarianism has to base itself on equality, not paternalism. But the former demands a frontal approach, impossible without a re-engineering of existing constitutional norms and practice. Rundle argues that a return to real ‘self-determination’ for Indigenous Australia will be impossible without a recasting of all-Australian self-determination – that is, identity. Is it conceivable that the Howard-Brough breakdown could lead to such broad reform? It may be expecting too much from Rudd’s new government; but what counts is the direction so clearly projected in Coercive Reconciliation, which it would be reasonable to hope Labor would keep open, or at least not obstruct.

In both Australia and the UK, neoliberalism has brought about more authoritarian government. The election was about the Howard government’s abuse of such powers in a number of directions. The positive aspect of the vote was the resistance it expressed to this trend; accompanied by uncertainty about whether Labor would itself succumb to ‘the times’. Just before the vote, the weekly Bulletin’s cover story was an analysis of Rudd’s political personality. The paper’s political correspondent, Chris Hammer, argued that Rudd displayed ‘an autocratic style, with decision-making resting firmly in his hands’. He wants decisions to be based on ‘the broadest possible consultations’ – and then he and his make the key decisions. ‘Who’s electing Rudd?’ Hammer asks, ‘the electorate or the times?’ The latter demand an all-powerful ‘prime-minister/president’ who can play the important cards just as close to his chest as he likes, while remaining ‘relaxed and joking in shopping malls’ and on morning radio shows.

By the end of Hammer’s piece I had that early morning feeling again. Just which country or continent was being discussed? There is for sure one vital distinction: Australian electors have at least voted for Rudd. A written, fixed-term constitution left no alternative. However, with or without a ballot, a popular authoritarianism has become the structural and personal norm. Up Over as distinct from Down Under, acquiescence by the mechanisms of early modern representative democracy may remain preferable, but Brown has made it seem quite non-urgent. ‘Managed capitalism’ has to be managed, while other things can be postponed or sidelined (if not dispensed with ‘for the duration’). Isn’t that the national government Brown aspires to – ‘all the talents’ and so on? In effect, a two-party order mutates into a one-party (and one-nation) identity, the hardened shell of an inherited habitus whose key ambition continues to be expansion, as well as to be on the right side diplomatically.

Harold Laski diagnosed Motherland two-partyism long ago, pointing out that any ins-and-outs system could work only by extensive agreement between the parties – a ‘de facto’ one-party national order where the common ground was all-important. Stability and continuity are sacred, while democratic change and initiative, with their associated risks, are dispensable: small doses please, always at the right time (which may or may not come).

Yet alongside the vote (not exactly because of it) there may be signs of hope. Just after sending the army in, Howard dumbfounded government, party and people by openly admitting something more serious was wrong. He had been previously identified with a dismissal of ‘the black armband view of history’, but now he proclaimed that the true purpose of sending the troops into the outback had been reconciliation: the integration of ancient and contemporary societies into ‘one great tribe’ via a national consultation – in effect, a willed renewal of the country as multiculturally equal. No amount of coercion would achieve that, he conceded. It amounted to recasting the constitution itself, which he proposed to do via its preamble – a curious preface defining greater aims and principles.

But if the constitution were thus redefined, it would be preposterous not to become a republic. A combination of reconciliation and the foundation of a popular republic could then provide an alternative framework to the endlessly reiterated ‘greatest democracy in the world’. Howard’s wild oscillations prior to his annihilation on 24 November indicate how hopeless defence of the system is becoming. As indeed did the campaign and the vote.

The issue foregrounded in the campaign was industrial relations. Howard’s government chose the workplace as its battleground, defending its anti-union legislation and the extraordinary policy of using AWAs (Australian Workplace Agreements) as the principal regulator of the labour market. Straightforwardly intended to foster enterprise and obstruct trade-union ‘interference’, the new rules were warmly welcomed by the Australian Business Council, as well as by the usual fleet of free-market columnists in Murdoch’s the Australian and elsewhere. In practice, the programme proved a minefield, with casualties far outnumbering the AWA survivors. It turned getting and keeping a job into a matter of federal policy: for a society reared on the rhetoric of Ned Kelly, egalitarianism and the ‘fair go’, this was hopeless. The Australian ended up urging readers to vote for Rudd.

The same prim authoritarianism more or less excluded Iraq and Afghanistan from the campaign. Surveys have shown a majority of Australians either opposed to or dubious about the Howard government’s military support for these ventures, and the campaign period itself was marked by more casualties in Afghanistan. Rudd has advocated withdrawal from Iraq in 2008, a pledge normally accompanied by new oaths of loyalty to the American alliance. As a Sunday Age editorial commented the day after the vote,

Now, with the death of the third Australian digger . . . it is high time our leaders on both sides of politics did mention the war . . . it is clear that both Howard and Rudd (and their senior ministers and shadow spokespeople) have found it convenient not to draw attention to an issue that could, like the ‘improvised explosive devices’ devised by Taliban bomb-makers, go off at any moment.

Thus the new authoritarianism over-reached itself on both the domestic and the foreign policy fronts. The vote was a rebuke, but not – or not yet – a defeat. The latter would require a sustained strategy, which could not avoid returning to the underlying constitutional issues. In the few days since the vote, signs are less than encouraging. Though Rudd earlier declared his sympathy for Howard’s surprise October initiative, he has now drawn back from it. In the Weekend Australian, the influential Aboriginal leader Noel Pearson said he felt ‘absolute devastation’ at this betrayal.

A centralising authority that has imploded to such an extent must first be reconstructed and imposed, before taking on new aims or directions. And the risk – or should one say, the near certainty? – is that still greater powers will seem to be called for, with further postponement of new designs and shifts, however desirable and overdue.

In Secret River, Kate Grenville tells the story of a vital watercourse that leads to Thornhill’s Place in New South Wales: the ideal home of a penniless 19th-century immigrant. Unfortunately, it was also the route to a frightful massacre of Aboriginal people. The settler’s wife, Sal, is driven by the horror to give up; but he won’t listen. ‘We ain’t going . . . It’s them or us and by Jesus Sal it won’t be us!’ Long after the battle William Thornhill looks out across his domain, proud yet incurably uneasy: ‘Each time, it was a new emptiness . . . He could not understand why it did not feel like triumph.’ As darkness falls he turns to his telescope, searching for something no longer findable: ‘Even after the cliffs had reached the moment at sunset where they blazed gold, even after the dusk left them glowing secretively with an after-light that seemed to come from inside the rocks themselves: even then he sat on, watching, into the dark.’ And in a sense, he watches still. Grenville’s after-light (and darkness) is what matters most here. Australian identity is still anxiety-ridden, if sometimes screened by bluster – but it is also open, and still in search of signs and wonders. Australia’s inhabitants don’t always understand this is why outsiders love the country: its hidden river matters more than the Opera House and the beaches – and infinitely more than the federal political system.


1 Quercus, 352 pp., £6.99, March, 978 1 84724 044 6.

2 Canongate, 352 pp., £7.99, September 2006, 978 1 84195 828 6.

3 Vintage, 528 pp., £8.99, June, 978 0 09 948 374 8.

4 Published in Britain next March by Constable.

5 Coercive Reconciliation edited by John Altman and Melinda Hinkson (Arena, 340 pp., A$27.50, October, 978 0 98041 580 3).

Tom Nairn is a researcher at the Royal Melbourne Institute of Technology, concerned with nationalism and the political and cultural effects of globalisation.

Black-White Anti-Immigration Alliance?

Activist fails to rally blacks on illegal-immigration issue
Homeless advocate Ted Hayes is making little ground in uniting those who believe that migrants pose an economic threat.

By Teresa Watanabe, Los Angeles Times Staff Writer

December 31, 2007

The forum seemed tailor-made for Ted Hayes, the Los Angeles activist for the homeless who has become one of the nation's most visible African Americans raising a ruckus about illegal immigration.

A mostly black crowd had gathered at Bethel African Methodist Episcopal Church in South Los Angeles for a feisty debate about illegal immigration's effects on the African American community. When Minister Tony Muhammad of the Nation of Islam and others called for black-brown unity, they drew boos and yells of dissent.

"Illegal immigration is wrong! They have no business being in this country!" shouted one audience member, drawing thunderous applause.

But Hayes was nowhere near the podium. He sat in the church's back pew, silent. He had not been invited to speak. In fact, he had been explicitly rejected because panel organizers felt he lacked legitimacy, according to one of them.

And therein lies a conundrum. As immigration becomes a red-hot issue in the presidential campaign, it is stirring volatile sentiments among a sizable number of blacks who believe illegal immigrants are threatening their jobs, housing, healthcare and educational benefits. But no one has been able to unite them and effectively push for their interests.

Certainly not Hayes. Since last year, the 56-year-old lean and lanky activist has tried to rouse blacks against illegal immigration with fiery appearances on national TV, protest marches, civil disobedience and leadership of Choose Black America, an anti-illegal immigration organization launched and financially supported by the Federation for American Immigration Reform.

"Illegal immigration is the greatest threat to blacks since slavery," Hayes declared at a recent Choose Black America meeting in Inglewood. "Immigrants got our jobs, the hospitals, the schools. Black folks can't compete."

So far, Hayes has failed to gain traction. His events go mostly unattended. His organization has managed to recruit only about 50 members nationwide. An Internet appeal to support his crusade netted only about $500, at last count.

A huge misstep, said commentator Earl Ofari Hutchinson, was Hayes' decision to align himself with the Minuteman Project, an anti-illegal immigration group viewed as extremist by many people, including blacks. Founder Jim Gilchrist, who calls Hayes "spectacular," sharply disputes the charge and said Minutemen are patriots of all races who do not engage in violence.

The Minuteman taint continues to reverberate, however. It's one reason the Community Call to Action and Accountability's executive committee rejected Hayes as a panelist for its recent immigration forum, said member Greg Akili.

"When you align yourself with people who have been an anathema to civil rights, people scratch their heads. They say, 'I may support your position but I see you standing with people who I know ain't with me,' " Akili said.

The activist denounces all the charges and says he is no extremist. At least one Latino activist, Nativo Lopez of the Mexican American Political Assn., agrees.

Lopez said he has met with Hayes to discuss common concerns about immigration's impact on blacks and U.S.-Mexico trade and labor policies. Hayes proposed that the two men plan a joint march in support of civil rights and economic justice for Mexicans in Mexico.

"He's not a racist," Lopez said. But the furor has badly damaged him, and Hayes said it illustrates the vicious treatment blacks get when they dare to criticize illegal immigration. Which is why, he added, few black leaders publicly do.

On that point, many of his critics agree.

"In black neighborhoods, most of the folks I encounter are leery of immigrants and most have negative perceptions of them, unfortunately," said Larry Aubry, columnist for the black-owned Los Angeles Sentinel and an executive committee member of the action and accountability group. "But black leadership throughout the community has been frankly derelict in addressing this issue."

A recent Los Angeles Times-Bloomberg poll showed that more than two-thirds of blacks nationwide said that illegal immigration was an important problem. About half supported a pathway to citizenship for those who learn English, pay fines and have no criminal record, compared with 60% of whites.

But more believed illegal immigrants had a negative impact on their community than those who viewed them positively. And blacks generally supported harsher enforcement measures, such as deportation and border security, than whites.

Such sentiments -- and a push from a friend -- helped propel Hayes to take on the controversial issue last year.

Inglewood businessman James Spencer plied him with arguments, Hayes said, that illegal immigrants were draining resources that could otherwise help the homeless on skid row, most of whom are black men.

Hayes knew the issue would jeopardize his homeless work, endanger his safety and strain ties with Latino friends.

He chose to do it anyway, he said, because he could not avoid seeing a link between illegal immigration and diminishing resources for struggling blacks.

"I thought, 'OK, I can suffer for this cause,' " Hayes said.

And he has.

When focused on homelessness, Hayes lived in relative comfort. A $330,000 budget of mostly state and federal grants supported Dome Village, enough to hire a 10-member staff and pay Hayes a $30,000 annual salary as president.

The village, launched in 1993 when the Atlantic Richfield Corp. donated $250,000 to buy 18 portable domed housing units, has sheltered about 500 people since its start, and offered them schooling, job training and other services.

The village was Hayes' most tangible success in a 23-year history of homeless activism. A Georgia native personally seared by Jim Crow racism, Hayes first came to Los Angeles in 1970 and says he found Jesus. He became a born-again Christian and traveling minister, got married, moved to Riverside in 1981 and suffered several business disasters in auto detailing, break-dancing and roofing.

In 1984, Hayes said, God called him forth to a new cause: helping the homeless. As he watched a televised report about Tent City, a two-week gathering of homeless people in downtown Los Angeles at Christmastime, he abruptly decided to join them.

After city officials shut down Tent City on Jan. 2, 1985, Hayes spent the next eight years living on skid row and elsewhere on the streets. With Dome Village, Hayes began receiving international news coverage, visits from the likes of Britain's Prince Edward, help from a raft of community volunteers and, for the first time in many years, a steady paycheck.

Now most of that is gone.

Last year, Dome Village shut its doors after losing its reduced-rate rent and subsequently lost its federal funding. Hayes sold off the domes and, with part of the proceeds, moved his operations to a $2,000-a-month downtown loft. But the money is just about gone, and Hayes is in constant fear of eviction. Today, he lives on monthly unemployment benefits of $1,200, which he said are set to run out next month.

The "dominoes started falling," wife Arlene Hayes said, when news hit in 2005 that Hayes had become a Republican. For whatever reason, his Democratic landlord subsequently raised his rent by 700%, forcing Dome Village to close.

Hayes, whose father was an Army sergeant and a World War II veteran, said he liked President Bush's muscular Mideast foreign policy and supports the Iraq War. Those positions have not endeared him in the largely Democratic black community.

Then Hayes took up immigration, embraced the Minutemen and got slammed even harder.

Hayes makes no apologies for his positions. He does, however, voice regrets about his confrontational style, which has alienated him from such powerful black leaders as U.S. Rep. Maxine Waters (D-Los Angeles) and City Councilwoman Jan Perry -- neither of whom chose to publicly comment on him.

Asked to evaluate his effectiveness, Hayes is unflinchingly blunt. "Horrible. A failure," he said. "I'm a liability to the cause, because I seem to anger more people in power than make them allies." Organizations he began with a flourish, including the Black Elephants Republican group and the anti-illegal immigration Crispus Attucks Brigade, never grew beyond a handful of members.

Choose Black America also has failed to take off -- one reason the Federation for American Immigration Reform has not been entirely thrilled with Hayes' leadership.

Hayes' penchant for confrontation and civil disobedience is not a tactic the federation would use, said national director Susan Tully. "I'm not sure he's the guy to take the organization where it wanted to go," she said.

Hayes said he would likely step down as acting director.

For now, he continues to meet regularly with the dozen or so Choose Black America members in Spencer's Inglewood office. At one recent meeting, initial discussion about immigration-related news quickly turned into tirades about illegal immigrants -- their "slave labor" wages, their use of housing and healthcare benefits, their appropriation of black civil rights symbols for their cause.

But the outbursts masked personal pain. Elzie Alexander, jobless and homeless, said he has applied for dozens of jobs flipping burgers and cleaning hotels but has been turned down each time because he can't speak Spanish. Spencer said nearby hospitals have had to close, which he blames on too many uninsured illegal immigrants.

For speaking up about their plight, the men say they are grateful to Hayes.

"He stood up to the plate when no one else did," Spencer said.,1,298879.story?track=rss

Saturday, December 29, 2007

Robert Fisk on Bhutto Assassination

They Don’t Blame Al-Qa’ida. They Blame Musharraf.
by Robert Fisk
Published on Saturday, December 29, 2007 by The Independent/UK

Weird, isn’t it, how swiftly the narrative is laid down for us. Benazir Bhutto, the courageous leader of the Pakistan People’s Party, is assassinated in Rawalpindi - attached to the very capital of Islamabad wherein ex-General Pervez Musharraf lives - and we are told by George Bush that her murderers were “extremists” and “terrorists”. Well, you can’t dispute that.

But the implication of the Bush comment was that Islamists were behind the assassination. It was the Taliban madmen again, the al-Qa’ida spider who struck at this lone and brave woman who had dared to call for democracy in her country.

Of course, given the childish coverage of this appalling tragedy - and however corrupt Ms Bhutto may have been, let us be under no illusions that this brave lady is indeed a true martyr - it’s not surprising that the “good-versus-evil” donkey can be trotted out to explain the carnage in Rawalpindi.

Who would have imagined, watching the BBC or CNN on Thursday, that her two brothers, Murtaza and Shahnawaz, hijacked a Pakistani airliner in 1981 and flew it to Kabul where Murtaza demanded the release of political prisoners in Pakistan. Here, a military officer on the plane was murdered. There were Americans aboard the flight - which is probably why the prisoners were indeed released.

Only a few days ago - in one of the most remarkable (but typically unrecognised) scoops of the year - Tariq Ali published a brilliant dissection of Pakistan (and Bhutto) corruption in the London Review of Books, focusing on Benazir and headlined: “Daughter of the West”. In fact, the article was on my desk to photocopy as its subject was being murdered in Rawalpindi.

Towards the end of this report, Tariq Ali dwelt at length on the subsequent murder of Murtaza Bhutto by police close to his home at a time when Benazir was prime minister - and at a time when Benazir was enraged at Murtaza for demanding a return to PPP values and for condemning Benazir’s appointment of her own husband as minister for industry, a highly lucrative post.

In a passage which may yet be applied to the aftermath of Benazir’s murder, the report continues: “The fatal bullet had been fired at close range. The trap had been carefully laid, but, as is the way in Pakistan, the crudeness of the operation - false entries in police log-books, lost evidence, witnesses arrested and intimidated - a policeman killed who they feared might talk - made it obvious that the decision to execute the prime minister’s brother had been taken at a very high level.”

When Murtaza’s 14-year-old daughter, Fatima, rang her aunt Benazir to ask why witnesses were being arrested - rather than her father’s killers - she says Benazir told her: “Look, you’re very young. You don’t understand things.” Or so Tariq Ali’s exposé would have us believe. Over all this, however, looms the shocking power of Pakistan’s ISI, the Inter Services Intelligence.

This vast institution - corrupt, venal and brutal - works for Musharraf.

But it also worked - and still works - for the Taliban. It also works for the Americans. In fact, it works for everybody. But it is the key which Musharraf can use to open talks with America’s enemies when he feels threatened or wants to put pressure on Afghanistan or wants to appease the ” extremists” and “terrorists” who so oppress George Bush. And let us remember, by the way, that Daniel Pearl, the Wall Street Journal reporter beheaded by his Islamist captors in Karachi, actually made his fatal appointment with his future murderers from an ISI commander’s office. Ahmed Rashid’s book Taliban provides riveting proof of the ISI’s web of corruption and violence. Read it, and all of the above makes more sense.

But back to the official narrative. George Bush announced on Thursday he was “looking forward” to talking to his old friend Musharraf. Of course, they would talk about Benazir. They certainly would not talk about the fact that Musharraf continues to protect his old acquaintance - a certain Mr Khan - who supplied all Pakistan’s nuclear secrets to Libya and Iran. No, let’s not bring that bit of the “axis of evil” into this.

So, of course, we were asked to concentrate once more on all those ” extremists” and “terrorists”, not on the logic of questioning which many Pakistanis were feeling their way through in the aftermath of Benazir’s assassination.

It doesn’t, after all, take much to comprehend that the hated elections looming over Musharraf would probably be postponed indefinitely if his principal political opponent happened to be liquidated before polling day.

So let’s run through this logic in the way that Inspector Ian Blair might have done in his policeman’s notebook before he became the top cop in London.

Question: Who forced Benazir Bhutto to stay in London and tried to prevent her return to Pakistan? Answer: General Musharraf.

Question: Who ordered the arrest of thousands of Benazir’s supporters this month? Answer: General Musharraf.

Question: Who placed Benazir under temporary house arrest this month? Answer: General Musharraf.

Question: Who declared martial law this month? Answer General Musharraf.

Question: who killed Benazir Bhutto?

Er. Yes. Well quite.

You see the problem? Yesterday, our television warriors informed us the PPP members shouting that Musharraf was a “murderer” were complaining he had not provided sufficient security for Benazir. Wrong. They were shouting this because they believe he killed her.

Robert Fisk is Middle East correspondent for The Independent.

© 2007 The Independent

Tariq Ali on Bhutto Assassination

A Tragedy Born of Military Despotism and Anarchy

The assassination of Benazir Bhutto heaps despair upon Pakistan. Now her party must be democratically rebuilt

by Tariq Ali
The Guardian

Even those of us sharply critical of Benazir Bhutto’s behaviour and policies - both while she was in office and more recently - are stunned and angered by her death. Indignation and fear stalk the country once again.

An odd coexistence of military despotism and anarchy created the conditions leading to her assassination in Rawalpindi yesterday. In the past, military rule was designed to preserve order - and did so for a few years. No longer. Today it creates disorder and promotes lawlessness. How else can one explain the sacking of the chief justice and eight other judges of the country’s supreme court for attempting to hold the government’s intelligence agencies and the police accountable to courts of law? Their replacements lack the backbone to do anything, let alone conduct a proper inquest into the misdeeds of the agencies to uncover the truth behind the carefully organised killing of a major political leader.

How can Pakistan today be anything but a conflagration of despair? It is assumed that the killers were jihadi fanatics. This may well be true, but were they acting on their own?

Benazir, according to those close to her, had been tempted to boycott the fake elections, but she lacked the political courage to defy Washington. She had plenty of physical courage, and refused to be cowed by threats from local opponents. She had been addressing an election rally in Liaquat Bagh. This is a popular space named after the country’s first prime minister, Liaquat Ali Khan, who was killed by an assassin in 1953. The killer, Said Akbar, was immediately shot dead on the orders of a police officer involved in the plot. Not far from here, there once stood a colonial structure where nationalists were imprisoned. This was Rawalpindi jail. It was here that Benazir’s father, Zulfikar Ali Bhutto, was hanged in April 1979. The military tyrant responsible for his judicial murder made sure the site of the tragedy was destroyed as well.

Zulfikar Ali Bhutto’s death poisoned relations between his Pakistan People’s party and the army. Party activists, particularly in the province of Sind, were brutally tortured, humiliated and, sometimes, disappeared or killed.

Pakistan’s turbulent history, a result of continuous military rule and unpopular global alliances, confronts the ruling elite now with serious choices. They appear to have no positive aims. The overwhelming majority of the country disapproves of the government’s foreign policy. They are angered by its lack of a serious domestic policy except for further enriching a callous and greedy elite that includes a swollen, parasitic military. Now they watch helplessly as politicians are shot dead in front of them.

Benazir had survived the bomb blast yesterday but was felled by bullets fired at her car. The assassins, mindful of their failure in Karachi a month ago, had taken out a double insurance this time. They wanted her dead. It is impossible for even a rigged election to take place now. It will have to be postponed, and the military high command is no doubt contemplating another dose of army rule if the situation gets worse, which could easily happen.

What has happened is a multilayered tragedy. It’s a tragedy for a country on a road to more disasters. Torrents and foaming cataracts lie ahead. And it is a personal tragedy. The house of Bhutto has lost another member. Father, two sons and now a daughter have all died unnatural deaths.

I first met Benazir at her father’s house in Karachi when she was a fun-loving teenager, and later at Oxford. She was not a natural politician and had always wanted to be a diplomat, but history and personal tragedy pushed in the other direction. Her father’s death transformed her. She had become a new person, determined to take on the military dictator of that time. She had moved to a tiny flat in London, where we would endlessly discuss the future of the country. She would agree that land reforms, mass education programmes, a health service and an independent foreign policy were positive constructive aims and crucial if the country was to be saved from the vultures in and out of uniform. Her constituency was the poor, and she was proud of the fact.

She changed again after becoming prime minister. In the early days, we would argue and in response to my numerous complaints - all she would say was that the world had changed. She couldn’t be on the “wrong side” of history. And so, like many others, she made her peace with Washington. It was this that finally led to the deal with Musharraf and her return home after more than a decade in exile. On a number of occasions she told me that she did not fear death. It was one of the dangers of playing politics in Pakistan.

It is difficult to imagine any good coming out of this tragedy, but there is one possibility. Pakistan desperately needs a political party that can speak for the social needs of a bulk of the people. The People’s party founded by Zulfikar Ali Bhutto was built by the activists of the only popular mass movement the country has known: students, peasants and workers who fought for three months in 1968-69 to topple the country’s first military dictator. They saw it as their party, and that feeling persists in some parts of the country to this day, despite everything.

Benazir’s horrific death should give her colleagues pause for reflection. To be dependent on a person or a family may be necessary at certain times, but it is a structural weakness, not a strength for a political organisation. The People’s party needs to be refounded as a modern and democratic organisation, open to honest debate and discussion, defending social and human rights, uniting the many disparate groups and individuals in Pakistan desperate for any halfway decent alternative, and coming forward with concrete proposals to stabilise occupied and war-torn Afghanistan. This can and should be done. The Bhutto family should not be asked for any more sacrifices.

Monday, December 24, 2007

All English Economics Errors Contained Herein

The dangers of living in a zero-sum world economy
By Martin Wolf
Published: December 18 2007 19:02 Financial Times

We live in a positive-sum world economy and have done so for about two centuries. This, I believe, is why democracy has become a political norm, empires have largely vanished, legal slavery and serfdom have disappeared and measures of well-being have risen almost everywhere. What then do I mean by a positive-sum economy? It is one in which everybody can become better off. It is one in which real incomes per head are able to rise indefinitely.

How long might such a world last, and what might happen if it ends? The debate on the connected issues of climate change and energy security raises these absolutely central questions. As I argued in a previous column (“Welcome to a world of runaway energy demand”, November 14, 2007), fossilised sunlight and ideas have been the twin drivers of the world economy. So nothing less is at stake than the world we inhabit, by which I mean its political and economic, as well as physical, nature.

According to Angus Maddison, the economic historian, humanity’s average real income per head has risen 10-fold since 1820.* Increases have also occurred almost everywhere, albeit to hugely divergent extents: US incomes per head have risen 23-fold and those of Africa merely four-fold. Moreover, huge improvements have happened, despite a more than six-fold increase in the world’s population.

It is an astonishing story with hugely desirable consequences. Clever use of commercial energy has immeasurably increased the range of goods and services available. It has also substantially reduced both our own drudgery and our dependence on that of others. Serfs and slaves need no longer satisfy the appetites of narrow elites. Women need no longer devote their lives to the demands of domesticity. Consistent rises in real incomes per head have transformed our economic lives.

What is less widely understood is that they have also transformed politics. A zero-sum economy leads, inevitably, to repression at home and plunder abroad. In traditional agrarian societies the surpluses extracted from the vast majority of peasants supported the relatively luxurious lifestyles of military, bureaucratic and noble elites. The only way to increase the prosperity of an entire people was to steal from another one. Some peoples made almost a business out of such plunder: the Roman republic was one example; the nomads of the Eurasian steppes, who reached their apogee of success under Genghis Khan and his successors, were another. The European conquerors of the 16th to 18th centuries were, arguably, a third. In a world of stagnant living standards the gains of one group came at the expense of equal, if not still bigger, losses for others. This, then, was a world of savage repression and brutal predation.

The move to the positive-sum economy transformed all this fundamentally, albeit far more slowly than it might have done. It just took time for people to realise how much had changed. Democratic politics became increasingly workable because it was feasible for everybody to become steadily better off. People fight to keep what they have more fiercely than to obtain what they do not have. This is the “endowment effect”. So, in the new positive-sum world, elites were willing to tolerate the enfranchisement of the masses. The fact that they no longer depended on forced labour made this shift easier still. Consensual politics, and so democracy, became the political norm.

Equally, a positive-sum global economy ought to end the permanent state of war that characterised the pre-modern world. In such an economy, internal development and external commerce offer better prospects for virtually everybody than does international conflict. While trade always offered the possibility of positive-sum exchange, as Adam Smith argued, the gains were small compared with what is offered today by the combination of peaceful internal development and expanding international trade. Unfortunately, it took almost two centuries after the “industrial revolution” for states to realise that neither war nor empire was a “game” worth playing.

Nuclear weapons and the rise of the developmental state have made war among great powers obsolete. It is no accident then that most of the conflicts on the planet have been civil wars in poor countries that had failed to build the domestic foundations of the positive-sum economy. But China and India have now achieved just that. Perhaps the most important single fact about the world we live in is that the leaderships of these two countries have staked their political legitimacy on domestic economic development and peaceful international commerce.

The age of the plunderer is past. Or is it? The biggest point about debates on climate change and energy supply is that they bring back the question of limits. If, for example, the entire planet emitted CO2 at the rate the US does today, global emissions would be almost five times greater. The same, roughly speaking, is true of energy use per head. This is why climate change and energy security are such geopolitically significant issues. For if there are limits to emissions, there may also be limits to growth. But if there are indeed limits to growth, the political underpinnings of our world fall apart. Intense distributional conflicts must then re-emerge – indeed, they are already emerging – within and among countries.

The response of many, notably environmentalists and people with socialist leanings, is to welcome such conflicts. These, they believe, are the birth-pangs of a just global society. I strongly disagree. It is far more likely to be a step towards a world characterised by catastrophic conflict and brutal repression. This is why I sympathise with the hostile response of classical liberals and libertarians to the very notion of such limits, since they view them as the death-knell of any hopes for domestic freedom and peaceful foreign relations.

The optimists believe that economic growth can and will continue. The pessimists believe either that it will not do so or that it must not if we are to avoid the destruction of the environment. I think we have to try to marry what makes sense in these opposing visions. It is vital for hopes of peace and freedom that we sustain the positive-sum world economy. But it is no less vital to tackle the environmental and resource challenges the economy has thrown up. This is going to be hard. The condition for success is successful investment in human ingenuity. Without it, dark days will come. That has never been truer than it is today.

*Contours of the World Economy, 1-2030 AD, Oxford University Press 2007

Monday, December 17, 2007

The Shadow Banking System

Out of the shadows: How banking’s secret system broke down
By Gillian Tett and Paul J Davies
Published: December 16 2007 18:33 Financial Times

When the New York markets open on Monday, all eyes will be on Wall Street’s banks. As the US Federal Reserve, in a bid to ease the liquidity crisis, holds a novel type of money market auction to inject some $20bn of funds into financial institutions, investors and policymakers will be watching closely to see how many large banks bid for how much cash – and what that, in turn, indicates about their state of health.

Yet while investors are scrutinising some of the industry’s best-known names, a spectre will be silently haunting events: the state of the little-known, so-called “shadow” banking system.

A plethora of opaque institutions and vehicles have sprung up in American and European markets this decade, and they have come to play an important role in providing credit across the financial system. Until the summer, structured investment vehicles (SIVs) and collateralised debt obligations (CDOs) attracted little attention outside specialist financial circles. Though often affiliated to major banks, they were not always fully recognised on balance sheets. These institutions, moreover, have never been part of the “official” banking system: they are unable, for example, to participate in Monday’s Fed auction.

But as the credit crisis enters its fifth month, it has become clear that one of the key causes of the turmoil is that parts of this hidden world are imploding. This in turn is creating huge instability for “real” banks – not least because regulators and bankers alike have been badly wrong-footed by the degree to which the two are entwined.

“What we are witnessing is essentially the breakdown of our modern-day banking system, a complex of leveraged lending [that is] so hard to understand,” Bill Gross, head of Pimco asset management group recently wrote. “Colleagues call it the ‘shadow banking system’ because it has lain hidden for years, untouched by regulation yet free to magically and mystically create and then package subprime loans in [ways] that only Wall Street wizards could explain.”

By any standards, the activities of this shadow realm have become startling. Traditionally, the main source of credit in the financial world was the official banks, which typically forged business by making loans to companies or consumers. They retained this credit risk on their books, meaning that they were on the hook if loans turned sour.

However, in the past decade, this financial model has changed radically. On the one hand, banks have increasingly started to sell their credit risk to other investment groups, either via direct loan sales or by repackaging loans into bonds; at the same time, regulatory reforms have permitted the banks to reduce the amount of capital that they need to hold against the danger that borrowers default.

The net consequence is that the western financial system embraced what Paul Tucker, head of markets at the Bank of England, has described as the age of “vehicular finance”. This system has given banks huge incentives to pass on their loans to new vehicles, either by creating these themselves or by sponsoring outside fund managers to run them.

The role of such entities in creating credit has increased vastly in the past three years. For example, the asset-backed commercial paper market, which supplies the lion’s share of funding to SIVs and conduits in the form of cheap, short-term cash, saw a step-change in growth at the end of 2004. The volumes of such paper in issue had fluctuated between $600bn and $700bn for at least four years; at the market’s peak this summer they stood at almost $1,200bn.

“The shadow banking world has expanded at an amazing rate,” says Bob Janjuah, credit analyst at Royal Bank of Scotland, who estimates that these shadow banks could have accounted for half of all net new credit creation in the past two years in the US.

Because these vehicles typically borrow heavily to finance their activities, they have also been a key reason why leverage – or debt levels – across the financial world has risen so fast without regulators, or ordinary investors, being fully aware of this boom.

The involvement of hedge funds, themselves highly geared, as providers of the equity at the foundations of this system illustrates why shadow banking can have such an outsized impact on the supply of credit. Satyajit Das, an author and derivatives industry expert, cites an example where just $10m of real, unlevered hedge fund money supports an $850m mortgage-backed deal. This means $1 of real money is being used to create $85 of mortgage lending – credit creation far beyond the wildest dreams of high-street bankers.

Since SIVs and CDOs have never been in the business of gathering deposits from customers, their significance to the economic and financial system has not been widely recognised by regulators and policymakers. However, the huge expansion of the SIV and conduit industries in particular was fuelled by short-term debt bought by so-called money-market funds. Retail investors, schools, hospitals and pension funds have placed billions of dollars in such funds, yet none of this system comes under bank regulations.

The problem now is that the business model behind parts of this shadow banking world looks increasingly shaky, particularly among the SIVs. There is huge concern in the US that some of these money-market funds might not return all the money people have entrusted to them. “You have a whole pool of investors who have been putting their money into SIVs thinking that they were as safe, or even safer, than real banks,” says the head of investment banking at one big financial institution.

The role of regulators in this world was to a great degree replaced by the credit rating agencies, which awarded high, ultra-safe ratings to the debt issued by SIVs and other vehicles on the basis of historical analysis of the probabilities of defaults and losses across the shadow banking system.

However, this year’s credit turmoil has brought ratings downgrades to many of these instruments. “It’s clear that we can no longer solely rely on an investment’s credit rating when making management decisions,” says Alex Fink, chief financial officer of a state fund in Florida that was recently forced to freeze withdrawals after investors pulled out $13bn amid concerns over its exposure to securities backed by subprime mortgages. The securities had held top-notch ratings.

But it is not just in Florida or even the US where such pain has been felt – money-market funds run by BNP Paribas and Axa of France were among the first to freeze withdrawals back in August. It is a process that some regulators, such as Axel Weber, the Bundesbank president, liken to an old-fashioned “bank run” – albeit one that is now happening in the shadow bank sector rather than at visible high-street names.

The result of this is that the shadow banking sector is now shrinking at an even faster rate than it grew. The SIV sector has seen assets fall in value by as much as $150bn from a peak of more than $400bn, while the asset-backed commercial paper market itself is almost $400bn off its peak in July.

T he almost inevitable demise of the SIV is unlikely to trouble many regulators in the long term, but in the short term it leaves policymakers and bankers with a big problem.

Precisely because the sector has been so widely ignored in recent years, there has been relatively little debate about who might be responsible if it ever ran into problems. After all, SIVs – like other parts of the “vehicular finance” world – do not have any right to call on central banks as lenders of last resort, since they are not part of the official banking system.

Most of these vehicles, and the shadow banking sector as a whole, is supported by back-up liquidity lines with “real” banks – promises to lend money that bankers never imagined they would have to deliver on. Only now are these private-sector “lenders of last resort” being fully tested, as can be seen in the moves by HSBC and Citigroup, among others, to take tens of billions of dollars of lending back on to their balance sheets. Such rescues are taking place in spite of banks’ continued protestations that they have no legal responsibility to act.

This illustrates the huge level of uncertainty about exactly what banks will do and when – uncertainty that is compounded by the opaque nature of the vehicles themselves. For investors, regulators and central bankers – let alone for politicians – it is impossible to predict how this process will play out.

“As 2007 comes to a close, banks are having to deal with an expansion of their balance sheets, via an unwinding of SIV assets or retention of loans that banks are currently unable to sell,” says David Brickman, analyst at Lehman Brothers.

T his uncertainty has sparked money markets tensions – prompting the Fed’s action on Monday. But it is also creating concern about whether banks will soon cut their lending to the real economy – thus hurting growth.

Some investment bankers insist that the outlook is not so dire. After all, while the subprime mortgage-linked world has seized up – in Europe as much as the US – activity in other parts of corporate lending remains relatively robust. Indeed, investment vehicles linked to corporate debt, such as collateralised loan obligations (CLOs), remain a bright spot in the broader securitisation markets.

But central bankers are clearly concerned. The BoE’s Mr Tucker referred in a speech last week to a series of recent papers by the US economists Adrian Tobias and Hyun Shin, which argue that the credit cycle will be amplified by the kind of balance-sheet management employed by the shadow banking sector and modern banks themselves. “When the music stops, the process [of credit expansion] can be reversed as falls in asset values, leverage and liquidity feed on each other,” said Mr Tucker.

One thing that is clear is that regulators are facing mounting pressure to change their attitude towards these “shadow” banks. Hector Sants, chief executive of the UK’s financial watchdog, said last week that regulators’ ability to monitor the financial system had been hampered by banks’ use of “opaque” off-balance sheet financing and that this “needs to be addressed”.

There is also growing debate about whether a system that relies so heavily on non-bank lenders should also have some kind of “buyer of last resort” to stand behind the markets, much as central banks do for the banking system.

“Lending has become disintermediated to the extent that in many sectors the majority of lending is done not by banks but by investors. So if there is a run on the markets through the evaporations of liquidity, who is there to step in and provide that liquidity?” asks Alexander Batchvarov, head of structured product research at Merrill Lynch. “Previously we saw a similar situation with the collapse of LTCM. Today it is structured finance. Tomorrow it will be something else. Maybe we can study this crisis and come up with some form of structure that in future can perform that liquidity-providing, buyer-of-last-resort role.”

In some ways, the co-ordinated actions of the central banks in coming days are already supplying funds for this – but on a very modest scale given the size of the problem. Consequently, in the months ahead regulators and financiers will face mounting pressure to make the system of “vehicular finance” less complex and opaque. One result of the 2007 credit shock, in other words, is that the shadow banks will become less shadowy in the future.

As Pimco’s Mr Gross notes: “Investors should anticipate that the shadow’s successor will be a more conservative, less risk-oriented banking system.”

Copyright The Financial Times Limited 2007

Saturday, December 15, 2007

Workers of the New World Unite!

By John Gapper
Published: December 12 2007

Given that the US has one of the lowest rates of union membership in the industrialised world, it is not the obvious place to find the future of organised labour.

Only about 7.5 per cent of private sector American employees are in a union and many of those are manual workers in manufacturing industries such as carmaking. One has to search hard to find many service sector professionals in unions.

Maybe the simplest explanation for that is that it is not worth joining a union. Although the median US union member earns more than average – $833 per week against the national median of $642 in 2006 – that owes a lot to the fact that many work in the public sector. Many private sector employers ruthlessly exclude unions, as they are allowed to do.

The best-rewarded workers in recent years have not been those with a union on their side but those who can bargain for themselves, or employ an agent or lawyer to do it. The chief executive, the sports star, the actor or actress – anyone who comes under the mantle of “talent” – stands a much greater chance of being well-paid than a union member.

How, then, to account for the sudden upsurge in labour militancy in the unlikely quarter of the television and film industries? For the past six weeks, 12,000 film and television screenwriters in the Writers Guild of America have been on strike to get, among other things, a bigger share of online revenues.

In the past couple of weeks, another dispute has erupted in the television industry. Hundreds of young people employed on long-term freelance contracts by MTV Networks in New York – so-called permalancers – protested after Viacom, MTV’s parent company, changed their contracts to reduce their entitlement to health and pension benefits.

Strange as it sounds, I think these disputes hold lessons for workers in many industries, not just for New York’s “creative class” of media professionals. But they must do more than hark back to the glory days of 20th century unionism.

The driving force for the labour unrest is clear. Film and television companies used to have lots of money because each new form of distribution – from cable television to DVDs – added more revenues. The internet broke the cycle, leading Global Media Intelligence, a research group, to conclude that Hollywood must “begin a serious effort to rein in costs”.

The easiest place to start is staff costs, which is why many employees are feeling the squeeze. So far, however, there are only haphazard signs of Hollywood talent, with its multi-millions share-of-revenue deals, getting pinched. Sumner Redstone, who controls Viacom, noisily broke up with Tom Cruise but most Hollywood stars are still doing fine.

Things are tougher for junior employees – writers, assistants and designers who swarm around film and television studios. Many work from project to project and are officially freelancers, although it would be more accurate to call them employees. This saves tax but means they have poor pension and health benefits.

Striking collectively to gain better terms, or at least to stop employers from weakening the existing ones, sounds like a sensible thing to do. It fits with the union tradition of individuals banding together to raise their bargaining strength.

A short strike that attracts publicity but does not involve much financial sacrifice can be a good weapon. The MTV freelancers have pushed their employer on the defensive with a couple of brief walk-outs that had news value (and could be watched on the internet). They seem to have learned a trick from the short strike at General Motors this year.

A long strike is another matter. The writers’ strike is well into its second month. It has hurt the networks, with late night talk shows off the air and popular dramas about to follow. But writers are themselves losing money and the strike could accelerate the long-term decline in the audience for television and films.

Nor is it obvious that collective bargaining brings the best rewards for employees in the media industry. If an individual is regarded as one among many, his or her rewards are likely to be worse. Writers clearly suffer from being more anonymous and interchangeable than directors or on-screen stars – being part of the “writers’ room” implies lack of individual recognition.

Collective bargaining has a role in this world – to set standard contract terms or percentages for royalties and residuals – but individual negotiation is where the big money lies. Many technicians and writers are freelancers because it suits them: they get greater freedom to work across the industry and earn more.

Where collectivism could bring unadulterated rewards is outside the workplace – by providing health and pension benefits that freelance workers do not get. It is no coincidence that the MTV freelancers were angered by having their health benefits reduced. If you do not have health insurance in the US, you take a huge financial risk.

US unions are starting to take over responsibility for organising health benefits for members; this was a centrepiece of the GM settlement with the United Auto Workers union. Logically, there ought to be a place for unions or mutual organisations to establish health insurance and pensions for freelancers. Indeed, the Freelancers Union, a New York-based mutual group, is already doing so.

The idea that workers should band together outside the workplace is old: the co-operative movement has a long history in both the UK and US. But its insurance-based health system and defined-contribution pension schemes make the US fertile territory for the workers of the new world to unite.
© Copyright The Financial Times Ltd 2007.