The power network

Publicly, Israel will not do business with those who do not recognise it. But behind the scenes is a

The seven-and-a-half-year vacuum in Arab- Israeli peacemaking under George W Bush ends next January. Bush refused to play ball, but he wouldn't let anyone else on the field: not the UN, not Russia, not the European Union. The only legacies he leaves his successor to build upon are secret, deniable talks among intelligence agencies and the familiar engagement of violence.

Israel's public posture has always been that it would never speak with those who did not recognise its "right to exist". Putting aside the obvious fact that "right to exist" is meaningless in international law, Israel has talked for years with those who did not recognise it. It had contacts with King Hussein of Jordan, and it warned the governments of Egypt, Saudi Arabia and Sudan of plots in 1977 to overthrow their regimes. It sold arms to Iran during the Iran-Iraq War of the 1980s, and it talked to the PLO for years before Yitzhak Rabin met Yasser Arafat at the White House. It has spoken through mediators to Hamas and Hezbollah. It is now talking to Syria, through Turkey and various independent peacemakers, though Syria assists Hezbollah and Hamas. Nothing will come of this, as the Syrian president now admits, without US involvement. And Washington does not want to get involved.

In Gaza, Israel and Hamas are setting the terms of discussion. "What kind of dialogue is being established?" asks Geoffrey Aronson, an American working to bridge differences between Syria and Israel through Swiss mediation. "The parties are engaged by fighting in Gaza. They learn from each other. They establish their limits and red lines. It's a sophisticated process. Both sides learn what will produce an explosion." Behind the scenes, Egyptian intelligence officers speak to Hamas and Israel about Hamas activists in Israeli prisons, the Israeli soldier held by Hamas, and the opening of a door to Gaza, through Egypt or Israel, that would permit the people of Gaza to receive food, medicine and other necessities.

The discussions are on two levels: exchanges of prisoners and, since the Gazans opened the wall to Egypt at Rafah last June, on a ceasefire and border agreements. For Hamas, as one Pal estinian put it: "A ceasefire must include new border arrangements." A fortnight ago, Hamas and 11 small resistance groups met in Cairo to discuss what the Palestinians would accept on the border. The Egyptian intelligence chief, General Omar Suleiman, presented proposals he had reason to believe Israel could accept. Hamas responded with a few minor amendments, which Suleiman was due to take to the Israelis for their response. Most observers believe that, if Israel rejects the plan, Egypt will have no choice - out of concern for the opinions of its own domestic Islamists - but to open the border with Gaza.

In the meantime, Hamas and the Israelis have to talk about basics such as water supplies to any West Bank town with a Hamas mayor, or the mere survival of a million people in Gaza. "Co-operation on an operational basis on the provision of goods into Gaza could not proceed without co-operation between the IDF [Israel Defence Forces] and Hamas," says Aronson. Left for another day, or another American president, are the big questions: mutual recognition by the Israeli and Pal estinian states, acceptance of the Palestinians' democratic election of a Hamas government, the "security wall" that has robbed the West Bank of much of its best land, Jerusalem and, well, peace.

Hezbollah is the only other guerrilla organisation with which Israel is at war. Israel assassinates its leaders almost as often as it murders those of Hamas, but it talks to Hezbollah as well. There have been prisoner exchanges in the past, and Israel wants back two Israeli soldiers captured in July 2006. It also wants information on Ron Arad, the reservist captured in Lebanon in 1986 by Shia Amal militia. There have been secret discussions, through Germany, that have yet to yield anything: Israel is refusing to release all of the prisoners demanded by Hez bollah, and Hezbollah says it will hold on to the two Israelis until that changes. If Israel wants the men back and a quiet border in the north, it must speak either to Hezbollah or to Syria.

It has, for the time being, chosen Syria. The last time the Syrians and Israelis met face to face, at least publicly, was in January 2000 in Shepherds town, West Virginia. When the two countries were only a few yards from peace - that is, a difference of a few dozen yards of land around the Sea of Tiberias - Bill Clinton dropped the ball at his final meeting in Geneva with the then Syrian president, Hafez al-Assad, in March 2000. Bush did not bother to pick it up. Since April 2007, the Turkish foreign ministry has been ferrying "ideas" between Damascus and Jerusalem. "Maybe with the next US administration, we can talk about negotiations," the new Syrian president, Bashar al-Assad, told the Kuwaiti daily al-Watan.

The issue between Syria and Israel is the Syrian land occupied by Israel in the 1967 Six-Day War. Syria seems as willing to give full recognition to Israel, in exchange for a return to the 4 June 1967 borders, as Anwar Sadat of Egypt was to get back all of the Sinai in 1979. The Syrians asked Jimmy Carter, when he visited Damascus last month, to take a message to the White House, asking the Israelis to let Syrian farmers in the occupied Golan Heights dig water wells - as Israeli settlers do to water their vineyards. (They probably didn't realise that Bush's White House doors don't open for Carter.) But, for Israel, Syrian support for Hezbollah in Lebanon and Hamas in Gaza complicates matters. Would Bashar al-Assad sell out Hezbollah and Hamas for the Golan Heights? The Turks are trying to find out, but so far Syria prefers to use the Palestinian and Leb anese Islamists to put pressure on Israel. If Israel makes peace with Syria, he won't need them.

This is what happens when nothing is happening: secret discussions on prisoner exchan ges, temporary ceasefires, border opening hours and goodwill gestures. For the past year and a half, Condoleezza Rice has made almost monthly trips to Israel. Why? Patrick Seale, one of the best-informed Middle East analysts, wrote for Agence Global on 7 May that Rice "has virtually nothing to show for it. Her diplomacy has been an exercise in futility."

Doing nothing permits Israel to colonise the West Bank, terrorise Gaza and linger on the Golan Heights. Was futility the policy? "Meanwhile, Israel stepped up its programmes of annexation, dismemberment and imprisonment of shrinking Palestinian cantons in the West Bank," Noam Chomsky told Palestine Today in July 2007, "always with the decisive US backing despite occasional minor complaints, accompanied by the wink of an eye and munificent funding." Moreover, Washington's paralysis allows Israel to choose which Arab leaders to talk to, knowing they will sell each other out. What's the downside for Bush?

© Charles Glass 2008. Charles Glass is the author of "The Tribes Triumphant" (HarperCollins) and "The Northern Front: A Wartime Diary" (Saqi)

This article first appeared in the 19 May 2008 issue of the New Statesman, Secret Israel

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

This article first appeared in the 19 May 2008 issue of the New Statesman, Secret Israel