The end of capitalism, and other questions

“So, we should be really, really wary of this claim that we’re hearing that free market ideology is dead, that this marks the end of, you know, of capitalism. You know, I’m sorry, that is not the case. It may be going dormant for a little while to rationalize these massive bailouts, but it will come roaring back, and the crisis that is being deepened right now through these bailouts will be invoked for even more radical deregulation, privatization, tax cuts and so on. ” – Naomi Klein

As the Anglo-American banking system goes into meltdown, all sorts of unlikely people are beginning to ask, ‘is this the end of capitalism?’ A couple of weeks ago it would have been ideological treason to so much as think such a beastly thing. Now, with ancient financial institutions keeling over everywhere you look, the question is cropping up all over the corporate media.

So what’s the answer? Well the answer’s ‘no’. Or if you want me to flesh that out a bit, the answer’s ‘no, now get a grip’. But really, the problem lies with the question. There are other questions we should be asking, but I’ll come on to that later. For now, lets look at what’s wrong with asking ‘is this the end of capitalism?’

What do we mean, or what do most people understand, by the term ‘capitalism’? Practically every economy you can think of is one where commercial activity occurs, where there are goods and resources which are privately owned and that are bought and sold for profit. Alongside this private sector sits a public sector where, in democratic countries, resources are owned by the public as a whole and distributed according to decisions made by their elected government. Pure capitalism, and pure socialism, remain purely theoretical.

Across the world, what you invariably have are mixed public-private economies where the debate is about which sector of the economy is responsible for the distribution of which resources, and how those responsibilities will be discharged (e.g, to what extent the private sector should play a role in the provision of education and healthcare). That’s by no means an insignificant debate, but we should be clear on what that debate is about. It is not about whether or not we have the buying and selling of private property or whether or not we have capitalism. The debate is about what kind of capitalism we have in a democracy: which version of capitalism and what mixture of public and private economic activity will produce the end results valued and desired by a society organised on democratic principles.

Different countries strike the balance in different ways. As I’ve noted previously, the Nordic model has been far more successful than the Anglo-American neoliberal model in maximising the well-being of the population. The crisis of the last few weeks was born of the deregulated financial markets characteristic of neoliberal economies, wherein unrestrained greed drove debt to be managed in an increasingly reckless way – one which was proven conclusively to be unsustainable as the last of the pure investment banks on Wall St disappeared.



This is a serious malfunction of one version, not any and all versions, of capitalism. The collapse of institutions like Lehmann Brothers and the dangers of sub-prime mortgage lending don’t necessarily say very much about the forms of capitalism practiced in other countries. Neoliberals like to talk about their version of economics as though it is synonymous with capitalism itself, hence the talk of capitalism failing, but pretending there are no alternatives is just a neat way of sidestepping debates about what kind of capitalism societies should opt for.

Not only is the end of capitalism itself not occurring, it is not even being called for, at least not in any meaningful way. Only an infinitesimal minority on the left advocate the total abolition of all private property and commercial transactions. I hesitate to use the word ‘advocate’ because advocacy involves setting out serious proposals, and I’ve yet to see any serious proposal that explains how a non-capitalist society is going to be brought about. By that I mean a plan that describes in all the necessary fine detail how we get from here to there, dealing effectively with all the obstacles in the way. A plan that explains how we persuade the public to accept our proposed non-capitalist society, bring to power a government willing to effect the plan, and then enact the massive transformative program needed to entirely eradicate commercial activity and introduce a vast array of new social structures, habits and forms of interaction. Even if a workable plan of this kind, with a desirable end product, was formulated (I don’t completely rule that out) it would take many, many decades to implement. Such a plan does not exist, as far as I’m aware, even amongst those whose opposition to capitalism is the strongest.

No one, therefore, is proposing the end of capitalism itself in any serious way. For the most part, what’s called ‘socialism’ is just a take on how mixed public-private economies should be organised, rather than a total rejection of capitalism itself. Even the Venezuelan government, as it proclaims its mission to pioneer “21st Century Socialism”, allowed the private sector of the economy to grow relative to the public sector during its first decade in office.

Similarly, even the most swivel-eyed free-market extremists don’t advocate, in any serious way, the total abolition of the public sector and its replacement with pure capitalism. In fact, even in the neo-liberal citadels of Britain and America, the rigours of the free market are often quietly avoided and the state called upon for assistance. Think no-bid contracts for Halliburton in Iraq. Think of the UK arms industry's incestuous links with government, where ministers on overseas trips (including the Prime Minister) practically act as salesmen for the likes of British Aerospace. Think of how the US economy boomed in the post war era, in no small part due to government defence budgets socialising research costs for technologies that were subsequently turned over to the private sector for profit; like aeronautics, computers and even the internet. Those who say they advocate the free market have very little to say about the nanny state when its nursemaiding the rich. Only when it attends to the needs of the public are objections raised.

The debate that occurs between left and right on economics is not between absolute socialism or absolute capitalism but between democracy and private power. The left does not oppose globalisation, or even capitalism for the most part. What it takes issue with is a particular form of global economic integration that privileges the demands of private power and undermines the role of the democratic public sphere. The right does not object (aside from in rhetoric) to a role for the state within the economy, provided that role is to serve the needs of elites rather than those of the population.

So the real question, in the midst of the Anglo-American banking crisis of 2007-2008, is how our version of capitalism is now going to be reformed, and specifically where the power will lie. We need not expect, as Naomi Klein points out here, that neoliberalism will automatically be replaced by some benevolent form of social democracy. On the contrary, state-corporate elites are already moving to exploit the political conditions created by the crisis to extend the same neoliberal model that caused the financial collapse.


In her recent book “The Shock Doctrine”, Klein describes how the neoliberalisation of economies (privatisation, deregulation, stripping away of public programmes etc) has often been rammed through the legislative process in times of crisis. This is because while the public often opposes these measures, crisis situations offer policymakers brief moments when democracy can be suspended or circumvented while people are disorientated by shock and briefly willing to acquiesce to “firm leadership”.

Klein points out that this is exactly what is happening now in the US, in respect of the emergency economic measures formulated by the Bush administration. What is being not so much proposed as demanded is a 0.7 trillion dollar buy-up, by the US taxpayer, of all the toxic and often worthless securities that have caused the current financial meltdown. It is demanded that no democratic, administrative or judicial oversight be applied to this process. It is demanded that legislators approach this in a “bipartisan” fashion and pass the measures quickly (that’s political language for not arguing and doing what the President tells you – now). The measures are being drawn up and will be enacted by people like Treasury Secretary Hank Paulson who, as head of Goldman Sachs, did so much to promote the reckless practices that caused the 'Nightmare on Wall St'. In summary, the same people who wrecked the US economy are now demanding that the traumatised and fearful taxpayer gives them 0.7 trillion dollars to clean up the mess they made and hold them harmless from the consequences of their actions, no arguments and no questions asked.

You could call it crawling to the nanny state and begging for a hand-out. Klein, with perhaps a little more accuracy, calls it a “stick-up”. Either way, its not the free market, but it is very neoliberal.

Klein also warns that this is just the first stage. The US is already deeply in debt, and this bailout will make matters much worse if passed in its proposed form. The usual corporate lobbyists, think tanks and Friedmanite academics will then take that opportunity to demand that the books be balanced. This might involve chipping away at unnecessary public programmes like healthcare, education, public housing etc etc, while the essentials, like Washington’s gargantuan military (which costs more than the rest of the planet’s military spending combined) go entirely untouched. It might involve tax cuts for corporations and the wealthy. It will certainly involve exploiting the situation to push measures that serve the interests of the most powerful sections of society which, rather than theoretical “free markets”, is what neoliberalism is really about.

The scenario in the UK is only slightly different. Social democratic instincts still flicker in some corners of the political class. But despite Gordon Brown’s recent rhetorical tilt towards the left, New Labour remains a classic party of neoliberalism, and the Conservative party likely to succeed them in government by 2010 is even more so. In spite of current events, neoliberals could well dominate the policy debate on how to deal with the economic crisis on this side of the Atlantic.

Klein quotes neoliberal don Milton Friedman describing in candid terms how his disciples should use the Shock Doctrine to push forward their policies. “Only a crisis, actual or perceived,” he says, ”produces real change. And when the crisis occurs, the change depends on the ideas that are lying around. That, I believe, is our basic function: to keep the ideas ready until the politically impossible becomes politically inevitable”. An example is Chile in the 1970s, where Friedman had to wait until after a military coup had taken place to find a government willing to enact his policy prescriptions, which had been overwhelmingly rejected in earlier democratic elections.

The collapse of Western financial markets - the devastating effects of which are only beginning to be felt - does not mark the end of capitalism, and may perversely only mark the acceleration of neoliberism out from the ashes of its own bonfire of the vanities into new and yet more dangerous territory. That depends entirely on who wins the current debate on what emergency measures should be taken and how the system should be reformed long-term. The neoliberals, led by Secretary Paulson, are keen to avoid that debate. Those who oppose them should note this, because it betrays the neoliberals’ fear, even expectation, that this is an argument they would lose. Our task is to ensure that the shock of the past few weeks is not exploited by its authors, but instead that its lessons are learnt and that failed economic models are replaced by something more just and sustainable. In formulating our own proposals, for the immediate and the longer term, we can begin by pointing to the more successful capitalist systems in place in other countries, and take things from there.

Regicide is Painless

We hear that no one at the Labour conference was talking about policy. Everyone was talking about the leadership. Well, those MPs and ministers agitating for the removal of Gordon Brown have a few questions to answer.

If Labour's policies are basically right, and the government's woes are all down to Brown, then why was it that the party haemorraged 4 million votes between 1997 and 2005 (roughly the same amount as Major lost the Tories)? In 2001 Labour won fewer popular votes than Neil Kinnock had won in the 1992 defeat. In 2005, it won fewer popular votes than the Tories had in their seminal 1997 meltdown.

If its all about Brown, why was Blair hurried out the door last year - because everything was going swimmingly? Why is it that no poll shows Labour winning even if it replaces its leader?

At what point do these MPs and ministers start to consider the possibility that the problem isn't Brown but the whole government (them included) and its policies?

The Tories were just as deluded in 97. They attributed their demise to people being bored after 18 years and just needing a change for the sake of it. That level of arrogance, lack of self awareness and failure of critical abilities was what rendered them unelectable for a decade. Voters didn't reject the Tories then, and aren't rejecting Labour now, because they're fickle teenagers who just need the same policies presented to them by a new personality, or with a new "narrative". They reject these governments because they don't like what they're doing.

The defining test of whether the government can face up to this fact, and save itself, has come with the current global economic crisis. The top of the party is dominated by "free-market" dogmatists of the Blairite and Brownite variety. Now that neo-liberalism has been comprehensively found out, these people have a simple choice. Either accept that the economic model they have maintained since 1997 is a comprenhensively busted flush, and adjust policy accordingly, or blindly insist that the fundamentals of the economy are strong, and sleepwalk into a slaughterhouse at the the next election.

Are Labour capable of facing up to the new economic realities? Or are they so wedded to the neo-liberal dogma that brought them to power that they can't acknowledge the fact that it is now destroying them? Given the record, we have every reason suspect the latter.

Human-rights horsetrading

Here's a familiar scenario for anyone who has been involved in debate or discussion on the history of the Israeli-Palestinian conflict. You mention the ethnic cleansing of Palestinians from their homes in 1947-49 during the creation of the state of Israel, and the fact that those people and their descendents continue to this day to live as stateless refugees. Then comes the retort that many thousands of Jews were expelled from Arab lands at the same time. "Why," it is demanded, "don't you talk about them?".

For Yehouda Shenhav of Tel Aviv University, author of "The Arab Jews", the purported equivalence is plainly spurious:

"Any reasonable person, Zionist or non-Zionist, must acknowledge that the analogy drawn between Palestinians and Arab Jews is unfounded. Palestinian refugees did not want to leave Palestine. Many Palestinian communities were destroyed in 1948, and some 700,000 Palestinians were expelled, or fled, from the borders of historic Palestine. Those who left did not do so of their own volition. In contrast, Arab Jews arrived to Israel under the initiative of the State of Israel and Jewish organizations. Some arrived of their own free will; others arrived against their will. Some lived comfortably and securely in Arab lands; others suffered from fear and oppression."


Moreover, the claimed equivalence between Jewish and Arab refugees stems from an organised campaign whose aims are far from humanitarian. Shenhav describes it as

"...a folly attempt to use the Arab Jews and their histories to counter-balance the Palestinian claim for the so called "right of return". The campaign has tried to create an analogy between Palestinian refugees and Arab Jews, whose origins are in Middle Eastern countries - depicting both groups as victims of the 1948 War of Independence. The campaign's Jewish proponents hope their efforts will prevent conferral of what is called a "right of return" on Palestinians, and reduce the size of the compensation Israel is liable to be asked to pay in exchange for Palestinian property appropriated by the state guardian of "lost" assets.[i.e. Palestinian property stolen by the Israeli government] Whereas in the past, the State of Israel and Jewish organizations have denied any linkage between the two groups and argued that the campaign was launched in the interest of the Arab Jews (see Chapter 3 in my book The Arab Jews, Stanford University Press, 2006), today all parties involved acknowledge that the main objective of the campaign is not to secure the interest of the Arab Jews, but rather to counter-balance the Palestinian political demands. ... [T]he idea of drawing this analogy constitutes a mistaken reading of history, imprudent politics, and moral injustice; and ... any analogy between Palestinian refugees and Jewish immigrants from Arab lands is folly in historical and political terms "

This campaign, Shenhav points out, continually fails to win support amongst Arab Jews because many of them refuse to see themselves as refugees and insist that they came to Israel as willing Zionists. This is not to say that many Arab Jews were not wronged by Arab governments at that time, but rather to point out that an equivalence can not be made in order to justify some trade-off of rights. After all, those Arab Jews who did not come to Israel of their own volition, who were expelled from Arab lands with their property confiscated, now at least enjoy self-determination in a democratic national homeland. Certainly few of them are demanding the right to return to their ancestral homes in Iraq, Syria and other countries. The Palestinian refugees by contrast are condemned to live in squalor, forcibly denied by Israel and its international allies their right to self-determination and a democratic state of their own. Its hard to say what's uglier: the claim that the plight of the two groups is the same, or the attempt to trade one crime off against another.

In this article, Lyn Julius argues that a resolution to the refugee issue can be found in Palestinians relinquishing their right of return in exchange for Arab Jews relinquishing theirs. I responded as follows:

"To seek restitution for the Jewish refugees is a noble and worthy cause. To try and trade off the rights of Jewish refugees against the rights of Palestinian refugess, by contrast, is cynical in the extreme.

Human rights, by definition, are not a commodity and cannot be traded. People who sign up to the principles of liberal democracy should not need this to be explained to them. Why should the Palestinians be held accountable for the crimes of Arab tyrannies? Because we're holding the whole Arab race responsible? Anyone who subscribes to that view has no right to speak of anti-semitism. You either oppose racism or you don't.

Let the Jewish refugees come to a settlement with those who wronged them; the Arab governments. And let the Palestinians come to a settlement with those who wronged them; the Israeli government. And let those who profess to speak on behalf of one oppressed group not exploit their cause in order to oppress another."

Victory in Iraq? Not so much

“They create a desolation and call it ‘peace’” - Tacitus

US Republican Vice-Presidential nominee Sarah Palin last week accused Democratic Presidential candidate Barack Obama of failing to recognise the "coming victory in Iraq". What's the nature of this "victory" that Palin's talking about? Has the US finally won the Iraq War?

Not so much.

For the last few months its been taken as read by many in the political mainstream that the "surge" of extra US troops into Iraq "worked" in quelling the violence that had been reaching cataclysmic levels by late 2006. In fact, this is a vast over-simplification, if not a self-serving lie put about by the war's supporters. A number of other factors have contributed to bringing down the levels of daily killings (which still remain extraordinarily high). The “surge” is merely one of these, at best is possibly the least of them, and at worst has in some respects been a countervailing force.

The principal factors behind the decline in violence are:

1/ the unilateral ceasefire of Moqtada al-Sadr's anti-occupation Shia militia;

2/ the decision made by nationalist Sunni insurgents, before the “surge” was conceived of, to concentrate their fire on the extremist "al-Qaeda" elements amongst them that had been responsible for the major attacks on Shia civilians; and

3/ the fact that the civil war in Baghdad has essentially played itself out, with Sunnis and Shia respectively expelled from mixed communities, the two groups divided, and no more 'sectarian cleansing' to be done (the outcome being a net win for the Shia forces).

Lets look at each of these in turn.

The Mahdi Army ceasefire may have been called with one eye on the coming influx of US troops, but it was still a unilateral decision. The fact is that Moqtada al Sadr continues to defy the US, five years after the occupiers set out to "kill or capture" him; as we saw in March when attempts to go after his Mahdi Army met with humiliating defeat. The US always wanted al-Sadr out of the way. By now, he's more powerful than ever. No US "victory" here.

Then there's the decision of Sunni nationalist insurgents to turn on al Qaeda, i.e. the foreign religious extremists who had come to Iraq to wage jihad both on the US and the Shia population. This has been hugely significant, and one cannot discount the effect of the US decision to stop fighting these nationalists guerrillas (who were always the bulk of the insurgency) and to pay them to concentrate on fighting and killing off al Qaeda. But the Sunni backlash against the religious extremists was not a US invention. It began as far back as 2005, and US backing for the movement was as much a pragmatic recognition that (a) it could not defeat the nationalist insurgency and (b) only those nationalists could defeat al Qaeda. Paying people to stop shooting at you and to instead fight some other people that you can't beat either is not in anyone's definition of "victory" as far as I'm aware.

And as for the third and possibly most important factor - the final Shia victory in the sectarian "Battle of Baghdad" which saw mixed neighbourhoods purged and thousands driven out of their homes - this is not merely a question of the US not being able to take credit for the relative peace that came after the civil war burnt itself out. No small amount of blame attaches to the US military itself for these gruesome events. As Michael Schwartz has argued in this indispensible analysis of the "surge" in Baghdad, US tactics may actually have facilitated the sectarian cleansing and effective Shia takeover. Either way, violence appears to have petered out in large part because one group of armed thugs achieved victory over the other, at massive cost to the civilian population, and not because the US stepped in as peacekeeper to enforce an early end to the fighting.

So the US mostly isn't fighting the Shia nationalists anymore because the Shia nationalists stood down of their own accord. It mostly isn't fighting the Sunni nationalists any more because (a) its paying them to fight Al Qaeda instead (which they were already doing) and (b) it couldn't beat them anyway, so its had to learn to live with them. It isn't fighting Al Qaeda anymore because its paying the Sunni nationalists to do that for it, since it couldn't beat Al Qaeda itself. And the Sunni and Shia aren't fighting each other anymore (or are doing so a lot less) because that battle's (mostly) over (at least in Baghdad) and the Shia won. The case for saying that US "surge" has "worked" and that Washington can soon declare "victory" is, therefore, a little on the thin side.

What's also misguided is the related insinuation that the Iraq has become in some way peaceful. Iraq is still one of the most violent places in the world, with levels of daily killing equivalent to those of the Lebanese civil war. Last month at least 360 civilians were killed and more than 470 wounded in violence. Adjust that for the size of the total population and you’re talking about the equivalent of 800 plus British deaths and over a thousand injuries in political/military violence over 31 days. Imagine that occurring in a Soviet-occupied United Kingdom, while Kremlin leaders prattle on about "victory" and “success”. And remember that these are just the deaths that journalists and officials know about and are able to verify.

Yes, things aren't as bad in Iraq as they were in 2006. But the fact that the blood now washes up to your waist, as opposed to your neck, doesn't make Iraq something other than a bloodbath. Demanding that people accept some of the worst levels of violence on earth as some sort of good news story displays a pretty low regard for human life on Palin's part.

The people best placed to judge the success of US military strategy are those who have to live with it on a daily basis: the Iraqi public. They don't get interviewed at length by the major news networks, or write op-eds for the Washington Post, but their opinions are relevant nonetheless. By March 2008, when this poll was taken, it was already close to being conventional wisdom in the West that the "surge had worked". Clearly a lot of Iraqis hadn't received the memo.

The poll asks whether the “surge” has helped in the five areas where beneficial effects were promised: security where troop levels have increased, security in other areas, conditions for political dialogue, the ability of the Iraqi government to operate, and the pace of economic development. On each of those areas, the proportion of Iraqis saying the “surge” had been beneficial ranged between 21 and 36 per cent. Between 42 and 53 per cent said it has made things worse. The balance was made up by those saying it had made no difference. So in each area, between 63 and 79 per cent of Iraqis say the “surge” had made things worse or made no difference. That's between 63 and 70 per cent in the case of security and 79 per cent in the case of political reconciliation (the latter of which we're given to understand was the overall purpose of the “surge”).

Of course, the real aim of the “surge” was for the US to get Iraq properly under its control, not to perform an act of altruism or humanitarian relief work from which it has nothing to gain for itself, though that is exactly how the “surge” has been described, practically without exception, in our media and amongst our politicians. The question of whether it is for one country to forcibly place another country under its control, for its own purposes and against the wishes of majority of people in the latter country, is hardly one that should be ignored - though it has been. In any event, the “surge” appears to have failed in this respect. With the Iraqi government apparently now moving to reject the US demand for a permanent military presence and privileged access to oil reserves, the real reason for the 2003 invasion. What was supposed to be an US-client government in Baghdad now thumbs its nose at Washington and sidles up to, of all people, the Iranians. Do Palin and McCain really call that success, even on their own warped terms? Apparently dishonesty and greed now battle it out with rank stupidity for control of the United States government.

The 2003 invasion of Iraq devastated the country, driving well over 4 million Iraqis out of their homes (or around one in every six of the population) and killing perhaps a million (or around one in every twenty-nine of the population) according to the best estimates available. The refugees included many of Iraq's former professional classes, driven into poverty and marginalisation in neighbouring countries, their children into malnutrition, their daughters into prostitution. Those left behind fare little better, be they the maimed, the bereaved, the unemployed, the impoverished, the imprisoned or the tortured. Nothing can erase the suffering that has taken place over the last five years, or return the hundreds of thousands of dead to their loved ones. This tsunami of grief was delivered to Iraq by an aggressive war of choice, instigated under a cloak of propaganda and straightforward lying, that was aimed at no more lofty a goal than the acquisition of greater wealth and power. To talk of "victory" in Iraq is obscene, as indeed is any reaction from anyone in Britain and America other than outright cringing shame.

Yet not only is it a commonly accepted truth, here and in the US, that the "surge has worked", but early backers of the “surge” are now lauded as wise sages of military and foreign policy. A little over a year ago John McCain's bid for the White House was seen as little more than the quixotic last gasp of a failed militarist, his approval rating for the Republican candidate languishing in the single digits. McCain's subsequent political resurrection rested almost entirely on the notion that "the surge worked", as he had doggedly insisted it would, and it is in many ways to this misapprehension that we can attribute the now present danger of a McCain-Palin Presidency from January 2009, with all the chilling prospects that raises for the United States and the world.

The Republican Election Strategy

Here's some decent analysis of the Republican election strategy on MSNBC's "Countdown"; about as good as it gets in the American mainstream media (host Rachel Maddow, by the way, is definitely one to watch).

Both the Republicans and the Democrats will be aiming to do two things in the campaign. First, mobilise their core supporters (their "base") both to vote in numbers and to persuade their neighbours to do the same. Second, win over as many as possible of those voters who consider themselves neither Republican nor Democrats. The Republicans have some work to do on both sides of that strategy.

Irrespective of the recent fall in violence in Iraq and the perception that a corner has been turned there (actually Iraq is still a horror show, but lets put that to one side for a moment), polls show that most Americans made up their minds about the war a long time ago. The US economy, as we know, is in deep trouble. Polls also show that 80 per cent of Americans think their country is going in the wrong direction. And President Bush has spent much of the last two years with approval ratings so low they occasionally exceed the historic depths plumbed by Richard "I am not a crook" Nixon. Winning over non-Republicans could not be more difficult for John McCain at this point in time.

As for mobilising the base, well the choice of hard-right Alaskan governor Sarah Palin was undoubtedly aimed at giving die-hard Republicans something to get passionate about. McCain may be the nominee, but he's not wildly popular amongst the evangelical Christians who have turned out in multitudes to vote for George W. Bush. They're decidedly lukewarm about a man who, unlike Bush, they do not consider one of their own. Palin, by contrast, is a big hit with the Republican hardcore. But how much of a difference can she make? Right-wing Christians are very disappointed with Bush for failing to use his 8 years in office to decisively ban abortion and bring creationism into the classroom. Now Palin or no, John McCain is the still Presidential candidate, and if the christian right is disillusioned even with Bush then I very much doubt that we'll see them turning out to vote for McCain in anything like the numbers we saw in 2000 or 2004.

Recall that their ability to energise their core support was a major factor in the last several Republican election victories. But in the 2006 congressional elections they got soundly beaten, partly because their disillusioned supporters stayed at home and partly because the Democrats were able to both mobilise their own base and reach out to independents by focusing their rhetoric on people's concerns about the economy (the adequacy of their actual policies is another subject for another time). The Democrats have clearly learned the lessons of that campaign, and the circumstances in which most ordinary Americans are living today are such that economic concerns may well seem far more pressing that the "culture wars" of liberal v conservative social values that so excite the Republican party.

Current polls show Obama and McCain neck and neck, but the campaign only starts in earnest now, and a lot can happen in two months. There are Presidential and Vice-Presidential TV debates coming up, and if Obama and his running mate Joe Biden play their cards correctly, they could wipe the floor with their opponents. Obama is clearly much brighter and sharper than McCain, but I suspect that what will really give him the advantage in these contests is his temperament. McCain is known for his propensity for losing it in public (including one vicious verbal assault on his wife), while Obama appears very calm and composed at all times. If McCain starts to look rattled or lost for a convincing answer at any point in the debates, that moment could define the election. If he lost his temper he would probably be sunk. Palin v Biden is trickier. Biden is pure Washington establishment while Palin is a fresh face (at least that's the narrative her handlers will want to stress), and if Biden appears to be patronising her he could do himself and Obama serious damage. But if he's civil and courteous and keeps the debate firmly on policy, then her spikey attempts to paint herself as the scourge of Washington will start to look very silly indeed.

But the major factor, as ever, will be the will of the people and institutions that really run the United States and its historic imperial project: the major corporations, investment banks, and concentrations of socio-economic power which, among other things, own the mass media that will be covering the election. The Bush presidency has been a historic disaster for US power. It is losing its grip on South America, challenged by a resurgent Russia, massively in debt to China, and humiliated in the Middle East by the defiance of Iran, Hezbollah, Hamas and the Iraqi insurgents; the latter of whom fought the greatest military force of all time to a standstill with automatic rifles and rudimentary explosives. And it is still fighting the Afghan war 7 years after it began. In the imperialist euphoria post-9/11 the US ruling class threw everything behind a Bush administration drunk on the idea that the world could be subdued by the might of Washington; that a few punishment beatings meted out to the likes of Saddam, the Taliban, maybe Iran and Syria later on, would provide the necessary example to quickly bring the planet to heel, ushering in a "new American century". It didn't work out. Quite the opposite, in fact, and my suspicion is that when it comes to the crunch, the people and institutions that run the United States will come down strongly in favour of a return to the safety and pragmatism of the Clintonite status-quo, managed by Obama and Biden, over a continuation of the self-defeating recklessness of the Bush era under John McCain.

Its widely assumed that the final result of this election will be close. The Republicans are certainly formidable and utterly cynical campaigners who can make a lot out of what little they have going for them. But personally, I think too much is stacked against them this time. Its foolish to make predictions. But I would not write off the possibility McCain and Palin will be crushed in the polls come election day.