An Arab Israeli protestors holds up Palestinian flag during a march for the right of return for Palestinian refugees who were expelled during the 1948. Photograph: Getty Images
Show Hide image

When the facts change, the solution should too

Grass-roots support for a one-state solution is higher than you might think.

Israelis and Palestinians generally don’t agree on much, but a recent poll, financed by the Konrad Adenauer and Ford Foundations (pdf), suggested that 70 per cent of Israelis, and an almost equal proportion of Palestinians in the West Bank and Gaza, rated the chances for the establishment of an independent Palestinian state in the next five years as “non-existent” or “low”.

They are right. There won’t be an independent Palestinian state in the West Bank and Gaza and there will be no “two-state solution”. This is a conclusion that many diplomats and peace process officials acknowledge in private but refuse to concede publicly.

The immediate reasons are clear: since it occupied the West Bank and Gaza Strip in 1967 (along with Syria’s Golan Heights and Egypt’s Sinai), Israel has devoted its energies to making the occupation irreversible by confining and displacing Palestinian communities, replacing them with sprawling, Jewish-only colonies.

This project failed in Gaza. Israel abandoned its settlements in the territory in 2005 and chose to turn it into a giant open-air prison to contain an impoverished, largely refugee Palestinian population for which Israel has no use because, although indigenous, it is not Jewish. In contrast, Israel redoubled its settlement efforts in the West Bank, to the point where well over half a million settlers live a privileged existence there, controlling as much as 42 per cent of the land, while more than two million Palestinians eke out an increasingly precarious existence in the spaces in between, surrounded by walls, checkpoints and the Israeli army. In the past three years alone, Israel’s settler population on the West Bank has grown by 18 per cent.

For decades, there has been a consensus –backed by numerous UN resolutions – that Israel’s colonies are illegal and must be removed. Yet, instead of confronting Israel, the “international community” has been complicit, channelling aid and Palestinian energies into maintaininga bantustan-like “Palestinian Authority” that, far from being the nucleus of a state, acts as an economic/military subcontractor for Israel. The dilemma, from a Zionist perspective, is that the settler project succeeded well but not quite well enough. Though Israel is entrenched in the West Bank, the overall Jewish population in historic Palestine hovers at just 50 per cent. In a short while, Palestinians will once again be the majority, just as they were before 1948 when more than 700,000 of them were expelled. There is no Zionist solution to Israel’s dilemma that does not perpetuate gross injustice. Despite the simplistic mantras about a twostate solution, Palestinians and Israelis cannot be separated into ethnically homogeneous nations without the risk of wholesale ethnic cleansing and violence, such as occurred when Israel was created.

 If two ethnically distinct states are unachievable and unjust, where can we go? Remarkably, the Konrad Adenauer/Ford poll found that 36 per cent of Israelis (28 per cent counting only Jews) and 31 per cent of Palestinians agreed with the argument that “there is a need to begin to think about a solution of a one state for two people in which Arabs and Jews enjoy equality”.

These numbers are surprisingly high, given that no leading political party or international figure has advocated such an outcome; indeed, they routinely denounce it. It suggests that there may well be more realism and creativity at the grass roots. They are still more remarkable given that, even into the early 1990s –acouple of years before Nelson Mandela was elected president – the percentage of white South Africans prepared to contemplate a “one person, one vote” system in a non-racial South Africa rarely exceeded the low single digits.

Increasingly among Palestinians, the focus is shifting away from statehood towards a discourse on rights. Nowhere is this embodied more succinctly than in the 2005 Palestinian civil society call for boycott, divestment and sanctions on Israel. Without stipulating one state or two, this call demands the end of the Israeli occupation that began in 1967; recognition of the fundamental rights of Palestinian citizens of Israel to full equality; and that any outcome respect, protect and promote the rights of Palestinian refugees to return home.

Could these demands – rooted in universal rights and international law – be fulfilled by a two-state solution? Conceivably, I have argued, if such an approach is modelled on the 1998 Good Friday Agreement for Ireland. However, it is not a two-state solution that any Zionist would accept. No just political outcome, whether under one state or in two, can preserve Israelis’ demand for the supremacy of Jewish rights over those of Palestinians.

Ultimately, I believe, the logic and inevitability of a single state will be accepted. As in South Africa and Northern Ireland, any just solution will involve a difficult and lengthy process of renegotiating political, economic and cultural relationships. But that is where the debate, unstoppably, is shifting.

This article first appeared in the 23 July 2012 issue of the New Statesman, Israel: the future

Jeremy Corbyn. Photo: Getty
Show Hide image

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 23 July 2012 issue of the New Statesman, Israel: the future