From Welfare State to Real Estate

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(319)

Kim Moody, The New Press, £15.99

The US is the wealthiest country in the world. New York, with its business district, Wall Street and Manhattan, is the wealthiest city. And yet poverty abounds.

Kim Moody shows how this is not an accident, but the result of a takeover of the administration of this city by a business elite. They despised the city's "social democratic" healthcare system, free university, welfare and housing programmes - a drag on their ability to make fortunes.

A financial crisis in the mid-1970s proved to be the opportunity that bankers, property developers and other multinational bosses had waited for. Moody's book dissects the business-dominated financial structures set up to ensure that elected politicians were unable to challenge business's priorities. Of course, they also made sure that no elected politician wanted to do so, as Democrats and Republicans not only swapped policies but candidates, too.

The use of financial crises to justify massive programmes of cuts was nothing new - even then. Moody demonstrates that far from being profligate, the city had been reducing its spending on public services. There was a massive growth in property-based wealth in the city, but this was not being taxed proportionately. In fact developers were given massive tax breaks, and benefited from sympathetic planning policies and public infrastructure investment. At the same time, the tax base in manufacturing was being eroded as plants closed. The crisis arose because of inadequate tax income combined with massive interest payments.

Much of the economic practice shared by all three mainstream parties in Britain was first tried out in New York. While some of the terminology and villains may be unfamiliar, the outcomes are all too clear.

The poor, increasingly pushed into mono-ethnic ghettos, suffered as housing, health, welfare and education were all cut. Politicians, meanwhile, played the race card time and again, seeking to continue old practices of carving up the vote along ethnic lines. Union leaders, who went along with the recovery plans, even lent their pension funds to the city to bail it out, had sabotaged the possibility of organised resistance.

Nevertheless, New York remains one of the most highly unionised cities in the US, with almost 29 percent of the workforce in a union. It is also host to many struggles for justice among migrant workers who make up much of the low-wage service workforce organised in community-based workers' centres.

Kim Moody sees the potential and necessity for these forces to be harnessed in a political movement capable of challenging the cabal of multimillionaires currently in charge. No matter how smart they are, they rely on millions of workers, and that is their weakness.