Seumas Milne's Blog, page 19

Americans would also gain from scaling back the empire | Seumas Milne

The presidential foreign policy debate showed how close the candidates were – and how far from their own public opinion

Whoever runs Washington heads a global empire. American politics affects people's lives in every part of the world, often as a matter of life or death. So it's scarcely surprising that more than 40% of those polled around the world say they want the right to vote in US presidential elections.

After all, the American revolution was fought on the slogan of "no taxation without representation". So long as the US government arrogates to itself the right to impose its "leadership" by force across the world, a contemporary version of the colonists' demand might be: "no global power without accountability".

And with George Bush's blood-drenched presidency still fresh in the memory, it's only to be expected that 81% want to see the less belligerent Barack Obama re-elected. Only in Pakistan, target of relentless civilian-slaughtering US drone attacks, do a larger number prefer his Republican opponent, Mitt Romney.

Of course, enfranchising foreigners is fantasy. Only US citizens will have a say in these elections, and barely half of them are likely to bother to vote. Their choice will be made overwhelmingly on domestic issues, not how the administration should deploy its fearsome arsenal on the other side of the world.

The race is tight mainly because the economy is still hobbled and poverty has risen 19% since 2000. But for all Obama's disappointments and an electoral system in the grip of the wealthy, the domestic choice is real enough: from spending and taxes to healthcare and abortion – facing a challenger who thinks 47% of Americans are scroungers.

But for most of Monday night's candidates' TV debate on foreign policy, it was hard to put a credit card between them. They competed to demonstrate unconditional commitment to Israel, determination to prevent Iran developing nuclear weapons at all costs and their firm intention to compel China to "play by the rules".

Romney had sharply toned down his more menacing rhetoric. Apart from grumbling about Obama's lack of "strong leadership", his inner hawk only really broke cover to insist on direct arming of the Syrian rebels and the necessity of yet further deficit-defying increases in the already gargantuan US military budget.

At one point the Republican rightwinger even criticised Obama for behaving as if the US could "kill our way out of this mess" in the Muslim world. That shouldn't be taken too literally. If nothing else, the experience of Bush – who presented himself as a compassionate conservative with a "humble foreign policy" in 2000 and went on to launch the most devastating war of aggression in modern American history – is an object lesson.

But Romney's determination to shake off his image as a warmonger reflects the need at least to nod to US public opinion. Unlike the Washington establishment, large majorities of Americans believe neither the Iraq nor Afghanistan wars were worth fighting, polling shows; more than three-quarters think the US plays "world policeman" more than it should; and most want military spending cut, reject a US strike on Iran, and oppose arming Syria's opposition. But that also underlines how little influence most people in the US (as in Britain) have on their government's foreign policy and military adventures.

For all Obama's tone of reason and his stand against the Iraq war, his record is anything but pacific. He accelerated withdrawal from Iraq, but escalated the war in Afghanistan and failed to subdue armed resistance, at a cost of thousands of extra deaths. He sharply intensified the drone war in Pakistan, spreading it to Somalia and Yemen, personally vetting the "kill lists" while expanding "legitimate targets" to include all military-age males.

He backed Nato's war in Libya, ratcheting up the death toll at least tenfold and unleashing mass ethnic cleansing; supported the suppression of Gulf protest; and managed a violent coup in Honduras to a "successful conclusion". With a little help from Congress, he reneged on his pledge to close the Guantánamo internment camp, acquiesced in Israel's refusal to end illegal colonisation of Palestinian territory, and has now dispatched US troops to sub-Saharan Africa and Jordan.

Whatever the personal views of the politician at the top, the US empire is a system, not a policy, underpinned by corporate and military interests. Romney would very likely be a more dangerous leader, but almost every US president has sanctioned military action, and the risk of war with Iran or growing intervention in Syria would remain under a second Obama term.

But it's also a system in evident decline, hastened by overreach in the war on terror and paid for in blood and treasure both by Americans and across the world. US military spending is larger than the combined spending of the next 20 powers combined, its troops stationed in a majority of countries.

Of course the rest of the world doesn't really want a vote in American elections but the US off its back. Far better for most Americans, too, if that bloated military budget were to be slashed, troops withdrawn and bases closed – and the money spent instead on jobs, schools and health in the US itself.

Twitter: @SeumasMilne

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The end of the New World Order | Seumas Milne

The upheavals of the early 21st century have changed our world. Now, in the aftermath of failed wars and economic disasters, pressure for a social alternative can only grow

In the late summer of 2008, two events in quick succession signalled the end of the New World Order. In August, the US client state of Georgia was crushed in a brief but bloody war after it attacked Russian troops in the contested territory of South Ossetia.

The former Soviet republic was a favourite of Washington's neoconservatives. Its authoritarian president had been lobbying hard for Georgia to join Nato's eastward expansion. In an unblinking inversion of reality, US vice-president Dick Cheney denounced Russia's response as an act of "aggression" that "must not go unanswered". Fresh from unleashing a catastrophic war on Iraq, George Bush declared Russia's "invasion of a sovereign state" to be "unacceptable in the 21st century".

As the fighting ended, Bush warned Russia not to recognise South Ossetia's independence. Russia did exactly that, while US warships were reduced to sailing around the Black Sea. The conflict marked an international turning point. The US's bluff had been called, its military sway undermined by the war on terror, Iraq and Afghanistan. After two decades during which it bestrode the world like a colossus, the years of uncontested US power were over.

Three weeks later, a second, still more far-reaching event threatened the heart of the US-dominated global financial system. On 15 September, the credit crisis finally erupted in the collapse of America's fourth-largest investment bank. The bankruptcy of Lehman Brothers engulfed the western world in its deepest economic crisis since the 1930s.

The first decade of the 21st century shook the international order, turning the received wisdom of the global elites on its head – and 2008 was its watershed. With the end of the cold war, the great political and economic questions had all been settled, we were told. Liberal democracy and free-market capitalism had triumphed. Socialism had been consigned to history. Political controversy would now be confined to culture wars and tax-and-spend trade-offs.

In 1990, George Bush Senior had inaugurated a New World Order, based on uncontested US military supremacy and western economic dominance. This was to be a unipolar world without rivals. Regional powers would bend the knee to the new worldwide imperium. History itself, it was said, had come to an end.

But between the attack on the Twin Towers and the fall of Lehman Brothers, that global order had crumbled. Two factors were crucial. By the end of a decade of continuous warfare, the US had succeeded in exposing the limits, rather than the extent, of its military power. And the neoliberal capitalist model that had reigned supreme for a generation had crashed.

It was the reaction of the US to 9/11 that broke the sense of invincibility of the world's first truly global empire. The Bush administration's wildly miscalculated response turned the atrocities in New York and Washington into the most successful terror attack in history.

Not only did Bush's war fail on its own terms, spawning terrorists across the world, while its campaign of killings, torture and kidnapping discredited Western claims to be guardians of human rights. But the US-British invasions of Afghanistan and Iraq revealed the inability of the global behemoth to impose its will on subject peoples prepared to fight back. That became a strategic defeat for the US and its closest allies.

This passing of the unipolar moment was the first of four decisive changes that transformed the world – in some crucial ways for the better. The second was the fallout from the crash of 2008 and the crisis of the western-dominated capitalist order it unleashed, speeding up relative US decline.

This was a crisis made in America and deepened by the vast cost of its multiple wars. And its most devastating impact was on those economies whose elites had bought most enthusiastically into the neoliberal orthodoxy of deregulated financial markets and unfettered corporate power.

A voracious model of capitalism forced down the throats of the world as the only way to run a modern economy, at a cost of ballooning inequality and environmental degradation, had been discredited – and only rescued from collapse by the greatest state intervention in history. The baleful twins of neoconservatism and neoliberalism had been tried and tested to destruction.

The failure of both accelerated the rise of China, the third epoch-making change of the early 21st century. Not only did the country's dramatic growth take hundreds of millions out of poverty, but its state-driven investment model rode out the west's slump, making a mockery of market orthodoxy and creating a new centre of global power. That increased the freedom of manoeuvre for smaller states.

China's rise widened the space for the tide of progressive change that swept Latin America – the fourth global advance. Across the continent, socialist and social-democratic governments were propelled to power, attacking economic and racial injustice, building regional independence and taking back resources from corporate control. Two decades after we had been assured there could be no alternatives to neoliberal capitalism, Latin Americans were creating them.

These momentous changes came, of course, with huge costs and qualifications. The US will remain the overwhelmingly dominant military power for the foreseeable future; its partial defeats in Iraq and Afghanistan were paid for in death and destruction on a colossal scale; and multipolarity brings its own risks of conflict. The neoliberal model was discredited, but governments tried to refloat it through savage austerity programmes. China's success was bought at a high price in inequality, civil rights and environmental destruction. And Latin America's US-backed elites remained determined to reverse the social gains, as they succeeded in doing by violent coup in Honduras in 2009. Such contradictions also beset the revolutionary upheaval that engulfed the Arab world in 2010-11, sparking another shift of global proportions.

By then, Bush's war on terror had become such an embarrassment that the US government had to change its name to "overseas contingency operations". Iraq was almost universally acknowledged to have been a disaster, Afghanistan a doomed undertaking. But such chastened realism couldn't be further from how these campaigns were regarded in the western mainstream when they were first unleashed.

To return to what was routinely said by British and US politicians and their tame pundits in the aftermath of 9/11 is to be transported into a parallel universe of toxic fantasy. Every effort was made to discredit those who rejected the case for invasion and occupation – and would before long be comprehensively vindicated.

Michael Gove, now a Tory cabinet minister, poured vitriol on the Guardian for publishing a full debate on the attacks, denouncing it as a "Prada-Meinhof gang" of "fifth columnists". Rupert Murdoch's Sun damned those warning against war as "anti-American propagandists of the fascist left". When the Taliban regime was overthrown, Blair issued a triumphant condemnation of those (myself included) who had opposed the invasion of Afghanistan and war on terror. We had, he declared, "proved to be wrong".

A decade later, few could still doubt that it was Blair's government that had "proved to be wrong", with catastrophic consequences. The US and its allies would fail to subdue Afghanistan, critics predicted. The war on terror would itself spread terrorism. Ripping up civil rights would have dire consequences – and an occupation of Iraq would be a blood-drenched disaster.

The war party's "experts", such as the former "viceroy of Bosnia" Paddy Ashdown, derided warnings that invading Afghanistan would lead to a "long-drawn-out guerrilla campaign" as "fanciful". More than 10 years on, armed resistance was stronger than ever and the war had become the longest in American history.

It was a similar story in Iraq – though opposition had by then been given voice by millions on the streets. Those who stood against the invasion were still accused of being "appeasers". US defence secretary Donald Rumsfeld predicted the war would last six days. Most of the Anglo-American media expected resistance to collapse in short order. They were entirely wrong.

A new colonial-style occupation of Iraq would, I wrote in the first week of invasion, "face determined guerrilla resistance long after Saddam Hussein has gone" and the occupiers "be driven out". British troops did indeed face unrelenting attacks until they were forced out in 2009, as did US regular troops until they were withdrawn in 2011.

But it wasn't just on the war on terror that opponents of the New World Order were shown to be right and its cheerleaders to be talking calamitous nonsense. For 30 years, the west's elites insisted that only deregulated markets, privatisation and low taxes on the wealthy could deliver growth and prosperity.

Long before 2008, the "free market" model had been under fierce attack: neoliberalism was handing power to unaccountable banks and corporations, anti-corporate globalisation campaigners argued, fuelling poverty and social injustice and eviscerating democracy – and was both economically and ecologically unsustainable.

In contrast to New Labour politicians who claimed "boom and bust" to be a thing of the past, critics dismissed the idea that the capitalist trade cycle could be abolished as absurd. Deregulation, financialisation and the reckless promotion of debt-fuelled speculation would, in fact, lead to crisis.

The large majority of economists who predicted that the neoliberal model was heading for breakdown were, of course, on the left. So while in Britain the main political parties all backed "light-touch regulation" of finance, its opponents had long argued that City liberalisation threatened the wider economy.

Critics warned that privatising public services would cost more, drive down pay and conditions and fuel corruption. Which is exactly what happened. And in the European Union, where corporate privilege and market orthodoxy were embedded into treaty, the result was ruinous. The combination of liberalised banking with an undemocratic, lopsided and deflationary currency union that critics (on both left and right in this case) had always argued risked breaking apart was a disaster waiting to happen. The crash then provided the trigger.

The case against neoliberal capitalism had been overwhelmingly made on the left, as had opposition to the US-led wars of invasion and occupation. But it was strikingly slow to capitalise on its vindication over the central controversies of the era. Hardly surprising, perhaps, given the loss of confidence that flowed from the left's 20th-century defeats – including in its own social alternatives.

But driving home the lessons of these disasters was essential if they were not to be repeated. Even after Iraq and Afghanistan, the war on terror was pursued in civilian-slaughtering drone attacks from Pakistan to Somalia. The western powers played the decisive role in the overthrow of the Libyan regime – acting in the name of protecting civilians, who then died in their thousands in a Nato-escalated civil war, while conflict-wracked Syria was threatened with intervention and Iran with all-out attack.

And while neoliberalism had been discredited, western governments used the crisis to try to entrench it. Not only were jobs, pay and benefits cut as never before, but privatisation was extended still further. Being right was, of course, never going to be enough. What was needed was political and social pressure strong enough to turn the tables of power.

Revulsion against a discredited elite and its failed social and economic project steadily deepened after 2008. As the burden of the crisis was loaded on to the majority, the spread of protests, strikes and electoral upheavals demonstrated that pressure for real change had only just begun. Rejection of corporate power and greed had become the common sense of the age.

The historian Eric Hobsbawm described the crash of 2008 as a "sort of right-wing equivalent to the fall of the Berlin wall". It was commonly objected that after the implosion of communism and traditional social democracy, the left had no systemic alternative to offer. But no model ever came pre-cooked. All of them, from Soviet power and the Keynesian welfare state to Thatcherite-Reaganite neoliberalism, grew out of ideologically driven improvisation in specific historical circumstances.

The same would be true in the aftermath of the crisis of the neoliberal order, as the need to reconstruct a broken economy on a more democratic, egalitarian and rational basis began to dictate the shape of a sustainable alternative. Both the economic and ecological crisis demanded social ownership, public intervention and a shift of wealth and power. Real life was pushing in the direction of progressive solutions.

The upheavals of the first years of the 21st century opened up the possibility of a new kind of global order, and of genuine social and economic change. As communists learned in 1989, and the champions of capitalism discovered 20 years later, nothing is ever settled.

This is an edited extract from The Revenge of History: the Battle for the 21st Century by Seumas Milne, published by Verso. Buy it for £16 at guardianbookshop.co.uk

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The first world war: the real lessons of this savage imperial bloodbath | Seumas Milne

David Cameron wants to turn the first world war into a focus of national pride. That should be resisted every step of the way

In the midst of deepening austerity, David Cameron is desperate to play the national card. Any one will do. He's worked the Queen's jubilee and the Olympics for all they're worth. Now the prime minister wants a "truly national commemoration" of the first world war in the runup to 2014 that will "capture our national spirit … like the diamond jubilee".

So £50m has been found to fund a four-year programme of events, visits to the trenches from every school and an ambitious redevelopment of the Imperial War Museum. Ministers have promised there will be no "jingoism", but Cameron says he wants to remember those who "gave their lives for our freedom" and ensure that "the lessons learned live with us for ever".

In case there were any doubt about what those lessons might be, the Times has declared that despite the war's unhappy reputation, Britain's cause was "essentially just", a necessary response to aggression by a "xenophobic and anti-democratic" expansionist power (Germany) and that those who fought and died did so to uphold the "principle of the defence of small nations".

It surely must be right to commemorate what was by any reckoning a human catastrophe: 16 million died, including almost a million Britons. It touched every family in the country (and many other countries besides), my own included. Both my grandmothers lost brothers in the four-year bloodletting: one in Passchendaele, the other in Gaza.

Seventy years after the event, one of them would still cry at the memory of the postman bringing the death notice in a brown War Office envelope to her home in Edinburgh. My grandfather was a field surgeon on the western front, who would break down as he showed us pictures he had taken of lost friends amid the devastation of Ypres and Loos, and remembered covering up for soldiers who had shot themselves in the legs, to save them from the firing squad.

But it does no service to the memory of the victims to prettify the horrific reality. The war was a vast depraved undertaking of unprecedented savagery, in which the ruling classes of Europe dispatched their people to a senseless slaughter in the struggle for imperial supremacy. As Lenin summed it up to the Romanian poet Valeriu Marcu in early 1917: "One slaveowner, Germany, is fighting another slaveowner, England, for a fairer distribution of the slaves".

This wasn't a war of self-defence, let alone liberation from tyranny. As the late Eric Hobsbawm sets out in his Age of Empire, it was the cataclysmic product of an escalating struggle for colonial possessions, markets, resources and industrial power between the dominant European empires, Britain and France, and the rising imperial power of Germany seeking its "place in the sun". In that clash of empires, Europe devoured its children – and many of its captive peoples with them.

Set against that all-destroying machine of 20th century industrial warfare, the preposterous pretext of the rights of small nations and the violated neutrality of "plucky little Belgium" cannot seriously be regarded as the real driver of the war (as it was not by British and other politicians of the time).

All the main warring states were responsible for the brutal suppression of nations, large and small, throughout the racist despotisms that were their colonial empires. In the years leading up to the first world war an estimated 10 million Congolese died as a result of forced labour and mass murder under plucky Belgian rule; German colonialists carried out systematic genocide against the Herero and Nama peoples in today's Namibia; and tens of millions died in enforced or avoidable famines in British-ruled India, while Britain's colonial forces ran concentration camps in South Africa and meted out continual violent repression across the empire.

The idea that the war was some kind of crusade for democracy when most of Britain's population – including many men – were still denied the vote, and democracy and dissent were savagely crushed among most of those Britain ruled, is laughable. And when the US president, Woodrow Wilson, championed the right to self-determination to win the peace, that would of course apply only to Europeans – not the colonial peoples their governments lorded it over.

As the bloodbath exhausted itself, it unleashed mutinies, workers' revolts and revolutions, and the breakup of defeated empires, giving a powerful impetus to anti-colonial movements in the process. But the outcome also laid the ground for the rise of nazism and the even bloodier second world war, and led to a new imperial carve-up of the Middle East, whose consequences we are still living with today, including the Palestinian tragedy.

Unlike in 1940, Britain wasn't threatened with invasion or occupation in 1914, and Europe's people were menaced by the machinations of their masters, rather than an atavistic tyranny. Those who died didn't give their lives "for freedom"; they were the victims of an empire that was a stain on humanity, the cynicism of politicians and the despicable folly of the generals. As Harry Patch, last British survivor of the trenches who died three years ago, put it, the first world war was "nothing better than legalised mass murder".

Since the 1990s, direct conflict between great powers that reached its cataclysmic nadir in the world wars has been replaced by a modern version of the colonial wars that preceded and punctuated them: in Iraq, Afghanistan and elsewhere. Unable to win public support for such campaigns, the government has tried to appropriate the sympathy for the troops who fight them as a substitute: demanding, for example, that poppies be worn as a "display of national pride" (or as Lieutenant General Sir John Kiszely, the now ex-British Legion president, described Remembrance Day, a "tremendous networking opportunity" for arms dealers).

If Cameron and his ministers try the same trick with the commemoration of the 1914-18 carnage, it will be a repulsive travesty. Among the war's real lessons are that empire, in all its forms, always leads to bloodshed; that state violence is by far its most destructive form; that corporate carve-ups fuel conflict; and that militarism and national chauvinism are the road to perdition. Celebrate instead the internationalists, socialists and poets who called it right, and remember the suffering of the soldiers – rather than the cowards who sent them to die. Attempts to hijack the commemorations must be contested every step of the way.

Seumas Milne's book, The Revenge of History: The Battle for the 21st Century, was published last week

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The Chávez victory will be felt far beyond Latin America | Seumas Milne

Popular support for Venezuela's revolution shows the growing space for genuine alternatives in the 21st century

The transformation of Latin America is one of the decisive changes reshaping the global order. The tide of progressive change that has swept the region over the last decade has brought a string of elected socialist and social-democratic governments to office that have redistributed wealth and power, rejected western neoliberal orthodoxy, and challenged imperial domination. In the process they have started to build the first truly independent South America for 500 years and demonstrated to the rest of the world that there are, after all, economic and social alternatives in the 21st century.

Central to that process has been Hugo Chávez and his Bolivarian revolution in Venezuela. It is Venezuela, sitting on the world's largest proven oil reserves, that has spearheaded the movement of radical change across Latin America and underwritten the regional integration that is key to its renaissance. By doing so, the endlessly vilified Venezuelan leader has earned the enmity of the US and its camp followers, as well as the social and racial elites that have called the shots in Latin America for hundreds of years.

So Chávez's remarkable presidential election victory on Sunday – in which he won 55% of the vote on an 81% turnout after 14 years in power – has a significance far beyond Venezuela, or even Latin America. The stakes were enormous: if his oligarch challenger Henrique Capriles had won, not only would the revolution have come to a juddering halt, triggering privatisations and the axing of social programmes. So would its essential support for continental integration, mass sponsorship of Cuban doctors across the hemisphere – as well as Chávez's plans to reduce oil dependence on the US market.

Western and Latin American media and corporate elites had convinced themselves that they were at last in with a shout, that this election was "too close to call", or even that a failing Venezuelan president, weakened by cancer, would at last be rejected by his own people. Outgoing World Bank president Robert Zoellick crowed that Chávez's days were "numbered", while Barclays let its excitement run away with itself by calling the election for Capriles.

It's all of a piece with the endlessly recycled Orwellian canard that Chávez is some kind ofa dictator and Venezuela a tyranny where elections are rigged and the media muzzled and prostrate. But as opposition leaders concede, Venezuela is by any rational standards a democracy, with exceptionally high levels of participation, its electoral process more fraud-proof than those in Britain or the US, and its media dominated by a vituperatively anti-government private sector. In reality, the greatest threat to Venezuelan democracy came in the form of the abortive US-backed coup of 2002.

Even senior western diplomats in Caracas roll their eyes at the absurdity of the anti-Chávez propaganda in the western media. And in the queues outside polling stations on Sunday, in the opposition stronghold of San Cristóbal near the Colombian border, Capriles voters told me: "This is a democracy." Several claimed that if Chávez won, it wouldn't be because of manipulation of the voting system but the "laziness" and "greed" of their Venezuelans – by which they seemed to mean the appeal of government social programmes.

Which gets to the heart of the reason so many got the Venezuelan election wrong. Despite claims that Latin America's progressive tide is exhausted, leftwing and centre-left governments continue to be re-elected – from Ecuador to Brazil and Bolivia to Argentina – because they have reduced poverty and inequality and taken control of energy resources to benefit the excluded majority.

That is what Chávez has been able to do on a grander scale, using Venezuela's oil income and publicly owned enterprises to slash poverty by half and extreme poverty by 70%, massively expanding access to health and education, sharply boosting the minimum wage and pension provision, halving unemployment, and giving slum communities direct control over social programmes.

To visit any rally or polling station during the election campaign was to be left in no doubt as to who Chávez represents: the poor, the non-white, the young, the disabled – in other words, the dispossessed majority who have again returned him to power. Euphoria at the result among the poor was palpable: in the foothills of the Andes on Monday groups of red-shirted hillside farmers chanted and waved flags at any passerby.

Of course there is also no shortage of government failures and weaknesses which the opposition was able to target: from runaway violent crime to corruption, lack of delivery and economic diversification, and over-dependence on one man's charismatic leadership. And the US-financed opposition campaign was a much more sophisticated affair than in the past. Capriles presented himself as "centre-left", despite his hard right background, and promised to maintain some Chavista social programmes.

But even so, the Venezuelan president ended up almost 11 points ahead. And the opposition's attempt to triangulate to the left only underlines the success of Chávez in changing Venezuela's society and political terms of trade. He has shown himself to be the most electorally successful radical left leader in history. His re-election now gives him the chance to ensure Venezuela's transformation is deep enough to survive him, to overcome the administration's failures and help entrench the process of change across the continent.

Venezuela's revolution doesn't offer a political model that can be directly transplanted elsewhere, not least because oil revenues allow it to target resources on the poor without seriously attacking the interests of the wealthy. But its innovative social programmes, experiments in direct democracy and success in bringing resources under public control offer lessons to anyone interested in social justice and new forms of socialist politics in the rest of the world.

For all their problems and weaknesses, Venezuela and its Latin American allies have demonstrated that it's no longer necessary to accept a failed economic model, as many social democrats in Europe still do. They have shown it's possible to be both genuinely progressive and popular. Cynicism and media-fuelled ignorance have prevented many who would naturally identify with Latin America's transformation from recognising its significance. But Chávez's re-election has now ensured that the process will continue – and that the space for 21st-century alternatives will grow.

@SeumasMilne

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Ed Miliband must move further and faster from New Labour | Seumas Milne

Miliband's conference speech will silence his critics. He should match it with policies that meet the scale of the crisis

A year ago, Ed Miliband used his speech to Labour's conference to signal a watershed break with the unfettered market capitalism that has dominated politics for a generation. But his denunciation of corporate predators and crony capitalism was halting and clunky, and he was attacked and ridiculed across the Conservative press.

Today in Manchester, the Labour leader delivered a rhetorical tour de force, speaking without notes for more than an hour and demonstrating, as his supporters always claimed, that unlike his brooding brother he really does talk human. Sure, the speech was policy-lite, but his performance will have surely silenced critics both within and outside Labour who claim he is too geeky and weird to be prime minister.

His attempt to seize the mantle of one nation politics from David Cameron's rightward-moving Tories could easily have become an exercise in New Labour-style triangulation. After all, the interests of unemployed building workers have precious little in common with those of hedge fund managers, one nation or not. In Tony Blair's mouth, it would have certainly been an excuse for anti-union grandstanding.

But Miliband used the device instead to attack Rupert Murdoch, banks and cartels, and committed Labour to narrowing the gap between rich and poor. Miliband's outriders briefed that the one nation theme would be a soft wrapping for more radical and social policies – but it could also be abused as a cover for more regressive ones.

We'll know which it is soon enough. New policies may have been few and far between this week – not surprisingly halfway through a parliament and amid an economic storm. Most have been positive enough, such as Ed Balls's call to spend next year's mobile spectrum sale proceeds on building 100,000 "affordable homes" (though not council housing) and Miliband's plan for new technical qualifications and crackdowns on gangmasters, but they're scarcely signature tunes.

Others have been more alarming, including the insistence on backing cuts in real-terms pay for public service workers, and Liam Byrne's determination to continue cutting benefits long into the future. They're designed to demonstrate fiscal responsibility and show the party's not in the unions' pockets, but demoralise Labour voters and would have the effect of squeezing weak demand still further in the process.

Miliband's attack on corporate predators and a broken model of neoliberal capitalism has of course been richly vindicated in the past year, as the Libor rate-rigging scandal followed the exposure of banks' mis-selling of financial products – even if his "responsible capitalism" slogan is scarcely going to inspire and Labour's opportunity for using G4S's spectacular failure at the Olympics to expose the outrage of outsourcing was undermined by the fact that security in Manchester this week is being run by none other than G4S.

But plenty of other senior Labour figures don't agree with him, either about the failure of the neoliberal model or the need to break with New Labour politics that depended on it. The Blairite diehards grouped around the Lord Sainsbury-financed Progress faction, for instance, may be in retreat and are ostensibly loyal to "our leader, Ed Miliband".

But they still grumble that the party isn't serious enough about cuts and public service "reform", are well represented on Labour's frontbench and are running an effective operation to have their supporters selected as parliamentary candidates. The need for a stronger counterweight to bolster Miliband is obvious.

The journey away from New Labour is in fact in its early stages. As this week in Manchester has showed, Britain's main opposition party remains hollowed out, its conference stage-managed, its policymaking procedures opaque and its internal democracy limited. The professional mannequins who run the party machine still dominate the working-class voices that have been all but squeezed out of political life outside the trade unions.

When it comes to the central economic choices, Ed Balls remains sceptical about Miliband's call for a new economic model and resistant to anything that might threaten the interests of the City of London.

Balls has been proved entirely right, of course, about the destructive impact of cuts on economic recovery and spoke powerfully on Monday against the coalition's disastrous austerity programme, which has not only shrunk the economy but widened the deficit it is supposed to be slashing.

But once again this week he has resisted calls to back taking the part-nationalised RBS and Lloyds into full public ownership and using them as motors of recovery, investment and industrial reconstruction – along with demands for an end to the exorbitant private finance initiative. Instead, the party's commitment is only to what could end up being a marginal public investment bank – while Miliband's warning that Labour might break up the banks depends on their failing to implement the government's own Vickers report.

Even senior officials at the heart of public financial policymaking complain that all three main political parties are still running scared of the banking lobby. The press constantly harries Labour over union funding and their "vested interests", but the City and corporate sector have a vastly greater influence on all parts of the political system.

The same officials warn that Britain could yet face another banking meltdown, triggered by the eurozone. The scale and depth of the economic crisis we are living through demands a different and more radical politics. If Miliband is to turn yesterday's one nation rhetoric into reality he will have to move further and faster from the obsolete New Labour inheritance.

Twitter: @SeumasMilne

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The coalition's phoney war is an exercise in political fraud | Seumas Milne

The Lib Dems play at opposition while driving through austerity. Pressure for an alternative must come from outside

Barely one week in and the party conference season already feels more like the pantomime season. Politicians who spend their day jobs joshing round the cabinet table are now at each other's throats. Conservatives and Liberal Democrats have wasted no opportunity to denounce each other, while plotting to unseat their own leaders.

In Brighton, Lib Dems talk for all the world as if they're the official opposition, while the chief whip, Andrew Mitchell, plays the role of timeless Tory villain by rounding on police officers as "plebs". Nick Clegg promises a wealth tax he can't deliver, as his rival Vince Cable declares that Tories are aroused by sacking people – and David Cameron's nemesis, Boris Johnson, launches a campaign to save Clegg on the grounds that he's a "natural Tory".

Differentiation has been the autumn rage since the early days of the coalition. But midway through the parliament, it's getting more serious. This is a deeply unpopular government whose central economic policy is failing. The Lib Dems are polling less than half their general election score and face what Cable calls "political oblivion". Clegg is increasingly rejected by his own members.

David Cameron, meanwhile, is under sustained attack from his right wing, who are convinced all would be well if the government would only slash taxes and regulation. They have now found their prince over the water in the unlikely shape of Johnson. So expect some scapegoating of benefit claimants and migrants – and mockery of hapless Lib Dems – when the Tories meet in Birmingham in a couple of weeks.

Some of the battles are real enough. But when it comes to the core of the government's programme, they're little more than shadow boxing. As the Lib Dems' man at the Treasury, Danny Alexander, spelled out on Tuesday, the whole coalition backs a scale of cuts the Institute for Fiscal Studies has called "almost without historical and international precedent" – but is now committed to an additional £15bn squeeze for 2015-16.

For all the Lib Dem boasts about their green credentials, a pupil premium that isn't getting through to the poorest and increases in tax allowances that are mainly benefiting the better off, they remain fully signed up to the main agenda: an austerity, welfare cuts and privatisation programme that is cutting taxes for the rich and the banks, throttling recovery and threatening to widen inequality still further for years to come.

We may not all be in this together – but they are. Lib Dem activists naturally don't like it, but there's little sign of rebellion. In what remains the most democratic of the main parties' conferences, delegates still allowed themselves to be pushed into voting for more austerity – apparently out of loyalty and fear of what Tim Farron, their president, insisted would mean "chaos, mass unemployment and human misery".

When it comes to the Liberal Democrat leadership, it's easy to forget how close the Orange Book faction around Clegg were to the Tories on economic policy to start with. In an echo of New Labour, the pro-privatisation, small state Orange Bookers – including Clegg, David Laws and Ed Davey – took over the Lib Dems at exactly the time the neoliberal model they so admired was imploding in the crisis of 2007-8.

But their rapid rise laid the ground for the coalition with Cameron's Tories. And any idea that they might have rethought a discredited ideology was dispelled on the Brighton fringe, where the home office minister Jeremy Browne rhapsodised about the free market, and Orange Book editor and hedge funder Paul Marshall gleefully recalled that Cable, another contributor, had endorsed privatisation of public services and a state spending cap of 40% of GDP (it's now about 45%).

Cable, who also backed light touch regulation of finance before the crash, has long since repositioned himself as a born-again social democrat. And while pushing through a state-backed small business bank in the half-baked form that is all George Osborne will allow him, he's been touting himself as the ideal Lib Dem leader for a future coalition with Labour – or anyone else for that matter.

The danger for Ed Miliband in all these confected coalition spats is that it makes it seem as if the crucial political debate is taking place within the coalition and its constituent parts, not between the coalition and Labour. While Labour hedges about a wealth tax or welfare cuts, it allows Cable and other Lib Dems to posture as opposition leaders even as they drive through government policy.

The chance to correct some of that will come at Labour's own conference next week. Miliband is expected to promote a "one nation Labour" line, which has the advantage of highlighting the Tories' social divisiveness and narrow class base. But it could also be co-opted to try and resurrect New Labour corporate featherbedding and blur the need to take on the interests of the 1% and the City, if the economy is to be reconstituted on a new basis.

More dangerous is the trap being laid by Osborne to box Labour into a commitment to sweeping coalition cuts and austerity after 2015 as a way of demonstrating its fiscal rectitude. What was debilitating in the benign conditions of 1997 would be a calamity in a period of crisis, stagnation and falling living standards. Better have that argument now than in the runup to an election – it's not one that can be left to politicians alone.

Twitter: @SeumasMilne

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Politics Weekly podcast: party conference season preview

Attendances may be down and genuine debates a thing of the past, but party conference season is still a major focal point on the political calendar. This weekend the Liberal Democrats gather in Brighton while Ukip host their get-together in Birmingham (the parties are polling neck-and-neck in a recent YouGov poll).

They'll be followed by Labour's conference in Manchester the following week as Ed Miliband attempts to bridge the gap between his party's soaring popularity and his own more modest personal ratings.

Then David Cameron will round off the season with his closing speech to the Conservatives in little under four weeks' time. But will his conference have already been overshadowed by trouble-making Boris Johnson?

In the studio to decipher it all: Guardian columnists Martin Kettle, Seumas Milne and Polly Toynbee.

Leave your thoughts below.

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The only surprise is there aren't more violent protests in the Middle East | Seumas Milne

The Muslim eruption reflects a deep popular anger and blowback from US intervention in both Libya and Afghanistan

Eleven years after it began, Nato's occupation of Afghanistan is crumbling. The US decision to suspend joint Afghan-Nato operations in response to a wave of attacks by Afghan soldiers and police on Nato troops cuts the ground from beneath the centrepiece of western strategy.

Nato is, after all, supposed to be training up Afghan troops to take control in time for the withdrawal of combat forces in 2014. Instead, those client regime troops are routinely turning their guns on a long-reviled foreign occupation force. No wonder support for a continued military presence is falling rapidly in the main British political parties – long after it has among the populations of all the occupying states.

The US-British invasion of Afghanistan was of course launched in response to the 9/11 attacks: the poison fruit of US-led support for the Afghan mujahideen war against the Soviet Union. Why do they hate us, many Americans asked at the time, oblivious to their country's role in decades of coups, tyranny, sanctions regimes and occupations across the Middle East.

In the aftermath of the killing of the US ambassador to Libya and assault on the consulate in Benghazi, as protests against a virulently Islamophobic US-made video spread across the Muslim world, Hillary Clinton echoed the same sentiments. "How could this happen in a country we helped liberate?" she asked, "in a city we helped save from destruction?"

She was referring to Nato's decisive role in winning power for the Libyan rebels who first took up arms in Benghazi last year. But just as the mujahideen the US backed in Afghanistan later turned their guns on their imperial sponsor in the form of the Taliban and al-Qaida, so many of the Islamists and jihadists who fought against Gaddafi with Nato air cover have their own ideas for the future of their country.

This is the start of the blowback from US and western attempts to commandeer the Arab uprisings. Something similar is likely to happen in Syria. The invasion of Afghanistan more than a decade ago not only didn't destroy al-Qaida, it spread it into Pakistan, Iraq, Yemen and north Africa, and today the flags of its offshoots are flying across the Arab world.

In Libya, Nato's intervention sharply escalated the death toll, triggered large-scale ethnic cleansing, spread war to Mali, and left thousands in jail without trial and the country in the control of multiple armed militias. Western governments hailed July's elections, in which most seats were not open to political parties, as bucking the Islamist trend across the region.

But their man, a former Gaddafi minister, has now been defeated for the job of prime minister by an independent Islamist, while the British ambassador's convoy, the Red Cross and UN have been attacked and Sufi shrines destroyed. Meanwhile, the Nato-backed authorities are threatening military action against jihadists in Benghazi, as American warships and drones patrol Libya's coast and skies.

The fact that the attack on the US consulate, along with often violent protests that have spread across 20 countries, was apparently triggered by an obscure online video trailer concocted by US-based Christian fundamentalists and émigré Copts – even one portraying the prophet Muhammad as a fraud and paedophile – seems bafflingly disproportionate to outsiders.

But in the wake of the Rushdie affair and Danish cartoons controversy, it should be clear that insults to Muhammad are widely seen by Muslims as an attack on their collective identity and, as the Berkeley-based anthropologist Saba Mahmoud argues, a particular form of religiosity that elevates him as an ideal exemplar.

Those feelings can obviously be exploited, as they have been in recent days in a battle for political influence between fundamentalist Salafists, mainstream Islamists and the Shia Hezbollah. But it would be absurd not to recognise that the scale of the response isn't just about a repulsive video, or even reverence for the prophet. As is obvious from the slogans and targets, what set these protests alight is the fact that the injury to Muslims is seen once again to come from an arrogant hyperpower that has invaded, subjugated and humiliated the Arab and Muslim world for decades.

Since launching the war on terror, the US and its allies have attacked and occupied Afghanistan and Iraq; bombed Libya; killed thousands in drone attacks in Pakistan, Yemen and Somalia; imposed devastating sanctions; backed Israel's occupation and dispossession of the Palestinians to the hilt; carried out large-scale torture, kidnapping and internment without trial; maintained multiple bases to protect client dictatorships throughout the region; and now threaten Iran with another act of illegal war.

The video is manifestly only the latest trigger for a deep popular anger in a region where opposition to imperial domination is now channelled mainly through the politics of Islam rather than nationalism. The idea that Arab and Muslim hostility to the US would have been assuaged because it intervened to commandeer Libya's uprising (an intervention most Arabs reject) is absurd.

About two-thirds of people in the Middle East and North Africa say they distrust the US, polling shows, rising to more than three-quarters in Pakistan. After 11 years of the war on terror, following decades of baleful intervention, the only surprise is that there aren't more violent anti-US and anti-western protests in the region.

Western war in the Muslim world has also fed a toxic tide of Islamophobia in Europe and the US. What is it about Muslims that makes them so easily offended, Europeans and Americans commonly demand to know – while Muslims point to cases such as the British 19-year-old who was convicted in Yorkshire last week of posting a "grossly offensive" Facebook message that British soldiers in Afghanistan "should die and go to hell", and ask why they're not afforded that protection.

The events of the last week are a reminder that an Arab world which has thrown off dictatorship will be more difficult for the western powers to hold in thrall. The Economist called the deadly assault on the US consulate in Libya an example of "Arab dysfunction" and urged the US not to retreat from the Middle East but go in deeper, including in Syria. As Afghanistan, Iraq, Pakistan and Libya have already shown, that would only bring disaster.

Twitter: @SeumasMilne

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The problem with unions is they're not strong enough | Seumas Milne

Trade unions are subject to hysterical abuse, but they are essential to democracy, equality and economic recovery

There's nothing that quite so reliably tips the British press into paroxysms of abuse and class contempt as workers having the gall to withdraw their own labour. Or even talking about going on strike, as has been happening at the Trades Union Congress in Brighton this week.

All the old tropes have been wheeled out in the last couple of days. These are "mindless militants" and "professional whingers", according to the Mail, the Sun and the Telegraph, determined to "drag Britain back into the dark ages" and holding the public "hostage" as they "squeal like stuck pigs".

You might imagine that years of pay freezes and real pay cuts, attacks on pension entitlements and the loss of hundreds of thousands of jobs – which is what the government has imposed on the public sector – would be a reasonable basis for an industrial dispute for any workforce.

Add to that the fact that these cuts are being made as part of an austerity programme opposed by most of the population and spectacularly failing to revive the economy – and industrial action is also an obvious mechanism to intensify the pressure for a change of economic direction.

But as unions voted to back co-ordinated strikes and explore the practicalities of a general strike – industrial routine in other parts of Europe – the most polite criticism was they were "out of touch". For the rest, these were union "boneheaded barons", "pygmies" and "sullen" union "bosses" defending an outrageous (and fictional) public sector largesse. Nearly 200 years after the repeal of the Combination Acts, Britain's corporate media and political class still struggle in practice to accept the right to strike.

The focus of the industrial campaign against austerity has now shifted from pensions to pay, with teachers launching a work-to-rule and the likelihood of wider action across public services in the spring. Whether that will prove to be on the scale necessary to force a government retreat is another question. But what is certain is that if workforces don't resist, cuts in pay and jobs will be driven through.

Contrary to the fantasies of anti-union propagandists, the real problem for the British economy is not that unions are too strong, but that they have long been far too weak. Between 1975 and 2007, the share of wages in national income fell from 65% to 54%, while escalating inequality within that smaller share has meant stagnating real wages for low and average earners.

A central factor in the shrinking slice of the economic cake going to workers – which helped lay the ground for the crisis of 2007-8 by fuelling personal debt – has been the weakening of trade unions, whose membership halved over the same period. In fact, the fall in union numbers since the 1970s is an almost exact mirror image of the increase in the share of income taken by the top 1% over the same period.

The shadow chancellor Ed Balls was heckled in Brighton today for backing the coalition's public sector pay cap as a trade-off for jobs and a token of Labour's fiscal discipline. But just as stronger unions are essential for greater equality and a better balanced economy, pay restraint now can only further deepen recession.

If unions are successful in resisting pay and job cuts, that would boost demand and aid recovery – though it would also need the shift to a public investment and growth strategy the government remains resolutely opposed to. But public sector workers can't be expected to wait for a Labour government or for the coalition to "understand why working people are so unhappy", as Ed Miliband put it in Brighton.

And however welcome the business secretary Vince Cable's conversion to an industrial strategy for the sectors of the future, the half-baked business bank George Osborne has allowed him doesn't begin to reflect the demands or scale of such an investment programme.

Meanwhile his scrapping of health and safety regulations for small firms, as Tory leaders chafe at the bit to dump more employment and union rights, is a warning of threats to come. As the struggle over pay builds up, the government will again try to isolate public service from private sector employees, who are of course also suffering real terms pay cuts and large-scale job losses.

Union weakness in the private sector – where only one in seven workers is now a member, compared with the majority in the public sector – is the product of decades of industrial change, fragmentation and anti-union legislation. But a string of private sector strikes this year – including on the buses, in construction and at Honda – has given a taste of how that can be turned round.

Success has depended on bolstering industrial action with campaigns targeted at suppliers and executives, as well as working with protest groups such as UK Uncut and the Occupy movement. That is now likely to be extended to occupations and other forms of direct action, if Unite's leader Len McCluskey has his way.

Such calls are regarded with horror by the political and media class. But the business unionism and supine "social partnership" they favour failed to protect jobs and living standards. Employers and politicians trampled all over it. Which is why the trade union movement now has its most radical leadership in modern times – and its most progressive general secretary, Frances O'Grady.

A generation after Thatcher's assault on the trade unions, they are still treated as dangerous or embarrassing outsiders. In reality, they are not only far and away the largest voluntary organisations in the country, but now the only major area of public life where working class people are properly represented.

Their agenda on recovery, jobs, services, inequality, privatisation, public ownership and the democratisation of economic life is closer to where public opinion is than the main parties' front benches – as Bill Clinton's former pollster Stan Greenberg underlined this week with his finding that voters want "fundamental change" in the way the economy and country works.

And contrary to the way they are portrayed, unions are popular – as often are the strikes they call. Last November's public service walkouts were backed by almost 80% of young people. As the Tories prepare a new legal straitjacket and Labour frets about being seen as too close to the unions, their members will be at the heart of the battle over who pays the cost of this crisis.

Twitter: @SeumasMilne

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George Osborne has failed. The battle is now on for the alternative | Seumas Milne

Neither austerity nor the Tory right's cuts and deregulation will deliver growth. That demands direct public investment

If David Cameron were in any doubt about the likely public reaction to his reshuffle, it was surely dispelled in the Olympic stadium on Monday. When a grinning George Osborne stepped up to present medals to Paralympic Games winners, the chancellor was met with an eruption of booing – while an apparently rehabilitated Gordon Brown was widely cheered.

The message of Osborne's humiliation couldn't have been clearer. The switching around of Hunts and Graylings would count for nothing. The minister the public most want to see the back of is the man who has driven the economy into the first full-blown double-dip recession since the 1970s, while cutting taxes for the rich, and whose benefits cuts have tipped disabled claimants into suicide as Britain embraces the Paralympians.

But as had been signalled from the start, there would be no change to the top cabinet jobs, at the Treasury in particular. Cameron and Osborne are joined at the hip politically. If the prime minister were to sack the chancellor, as half the country wanted, it would have been an admission that his government's entire economic policy and the centrepiece of the coalition with the Liberal Democrats had been an abject failure.

Which by any rational reckoning, it has been. Cameron and Osborne are presiding over a slump which has now lasted longer than Britain's depression in the 1930s. Having inherited a growing economy on the back of Labour's post-crash stimulus, their cuts and tax rises have choked off recovery. The economy is now smaller than when the coalition came to power and still 4.3% below its pre-crash 2008 peak.

The idea was to cut spending and borrowing, and slash the deficit. The private sector would then ride to the rescue with investment and growth to fill the gap left by a smaller state. Nothing of the kind has happened – any more than it has anywhere else such austerity packages have been driven through since the crash.

Osborne has failed miserably, even on his own terms. Public spending is rising as the costs of recession outstrip cuts, borrowing and the deficit are both rising because the economy is shrinking and tax receipts falling. Instead of investing to take up the public sector slack, corporations are sitting on cash mountains and the banks are still failing to lend four years after they were bailed (or part-bought) out by the state.

The result is falling living standards, insecurity, joblessness and underemployment, with a wave of new layoffs and insolvencies expected as cuts and tax rises bite deeper. Naturally ministers blame the eurozone crisis, but Britain's downturn started earlier, and exports to Europe only recently started to fall.

No wonder business support for the coalition's austerity is cracking, and Tories and Lib Dems have fallen out among themselves and with each other. So Cameron and Osborne have now come up with a "plan for growth", as good as admitting their strategy isn't working.

The package they've lined up certainly sounds like some of the things their critics have been demanding: including government guarantees for £40bn of investment in infrastructure and £10bn in housing, plus a state-backed bank to boost small business lending (as well as a loosening of planning regulations, which they haven't).

But it's nothing of the sort. From what we know, there will be no "guarantee" of £50bn investment, but underwritten loan sweeteners for private developers, with no return to the public purse. And the small business bank isn't going to be a bank in the normal sense at all (let alone a public investment bank) – more a new badge on existing government schemes.

These are sops, not game-changers. The Tory right, meanwhile, has a growth plan of its own: more business and personal tax cuts, still deeper cuts in public spending and employment deregulation to make your eyes water. Cameron's former leadership rival David Davis calls it "shock therapy" – and wherever that's been carried out, from Chile to eastern Europe, it's been a disaster: all shock and no therapy.

In fact, as Cambridge economist Ha-Joon Chang argues, among others, the evidence of the past half-century or more shows that deregulation, tax cuts and austerity programmes have never delivered the results claimed for them (though they have succeeded in shifting wealth and income from the poor to the rich) – and are even less likely to do so in the aftermath of the crisis of the neoliberal model that spawned them.

After yesterday's reshuffle shifted the government rightwards, pressure to move further in Davis's direction seems likely to grow. But so does the demand for the third option. Which is the one that could actually offer a route out of economic stagnation, rising unemployment, falling incomes and welfare cuts: large-scale public investment in housing, education, transport and cutting-edge technology, backed by a boost to demand, and financed through fully nationalised banks as well as borrowing for a return, at the lowest rates for 300 years.

Fearful of charges of profligacy, Labour's front bench has positioned itself somewhere between a public investment and growth package and the coalition's austerity, even as Vince Cable and his Lib Dem allies have argued for bank nationalisation and a crash housing programme. The clearest case for state-led expansion will be made at next week's Trades Union Congress. But as the crisis deepens, the battle between alternative routes out of the crisis can only become sharper – in Britain and across Europe.

Twitter: @SeumasMilne

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