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The dismantling of the State since the 1980s: Brexit is the wrong diagnosis of a real crisis

Brexit is the last opportunity to radically dismantle the state-as-economic-referee as the window on the popularity of neoliberalism starts to close.

The Duran

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Authored by Abby Innes via The London School of Economics British Politics blog:


Abby Innes writes that the vote to leave the EU and the administrative chaos around it pull into focus the crisis we should have been talking about before: the failures of homegrown neoliberal policies and their dire implications. She argues that while Brexit has been heralded by supporters as a solution to a number of problems, what it will actually do is to accelerate to the point of ‘completion’ the already failed experiments to reform the state.

The Leave campaign in 2016 had a lot in common with the 1979 Conservative election manifesto. Both evoked the threat of a bureaucratic super-state and something approaching a conspiracy of that state against the public. Both promised to rescue a Greater Britain from the conspiratorial political forces that were holding it back. Both campaigns were a misdiagnosis of the real crisis at hand. This time we face a crisis of ungovernability potentially far more severe than that of the 1970s; but its roots are less in Europe than in the failures of the homegrown neoliberal reforms of the British state.

The ‘supply-side revolution’

The last three decades of state reform in Western democracies have aggravated rather than resolved the social divisions that emerged with de-industrialisation. Over the last thirty years, liberal market economies in general and the UK in particular have transformed the character of their states through privatization and outsourcing, through the development of quasi markets in welfare, and the rejection of industrial policies. At the same time, permissive tax and regulatory regimes have encouraged large corporations to opt out of their former social obligations in the name of maximising shareholder value.

The ‘supply-side revolution’ of the last thirty years was driven by the dominant New Right diagnosis of the economic crises of the 1970s and based on the radical public choice economics aligned with the Chicago and Virginia schools. According to this diagnosis it was the state that was primarily responsible for the end of the post-war ‘golden age of growth’ because of its inhibition of the market. Thus, according to the New Right and later New Labour too, it wasn’t technological change, or de-industrialisation in the face of emerging markets, it wasn’t the Nixon shock, or the end of Bretton Woods, nor rising exchange rate instability, it wasn’t stagflation or the oil crises that had confronted the country with a need to re-evaluate its production regime. It was the state. And so it was the state, above all else, that had to be transformed.

The first problem with the supply-side logic: the state as a firm

The supply-side critique of the state is profoundly flawed. It is rooted in abstract deductive logic derived from the first-principles of neoclassical economics uncalibrated against empirical reality. The public choice school based its understanding of politics on the assumptions of neoclassical economics that until the late 1950s had been applied only to decision-making in markets. Carrying over this methodology drove a devastating conclusion that is actually just an artefact of the method itself. To answer their questions around why the state had grown in the post-war era, public choice theorists simply asserted that politicians, bureaucrats and their voters are self-interested economic actors like any others in a marketplace.

By declaring that all public officials should be understood as homo economicus, the New Right could reconceive of democratic politics as a process in which politicians are effectively entrepreneurs who compete to gain control over the resources of a monopoly: the state. To increase their fiefdoms, both self-interested politicians and bureaucrats will generate policies most likely to appease self-interested voters in the market for votes. By this logic, according to the New Right, democracy is doomed to crowd itself out: the demand for state privileges by individually self-seeking voters will never be satisfied until the growth of the state has reached an unstoppable momentum towards totalitarianism. Bureaucrats, as in any monopoly firm, will tend only towards exploitative price-making and general budgetary greed. A responsible politician will strip the state of its powers to intervene in a ‘free’ market: the only ‘honest’ mechanism in a rationally selfish world.

The micro-foundations behind this thesis make it philosophically extreme. They assume a society populated by individuals who, in all contexts, deploy a clear and cold calculation of the costs and benefits of their actions, and do so with perfect information about their options. The supply-side diagnosis assumes that individuals are super-humanly rational around their immediate interests but completely witless about social or constitutional considerations and unmoved by ethics as distinct from material gain: implicitly, theirs is a voting population that can’t tell the difference between the NHS and communism. It is in this light that the European Union is viewed as no more and no better than a cartel of self-seeking monopoly enterprises. Clearly, if you conceive of the state in this way then the only rational solution is not to reform it but to break it.

The second problem with the supply-side logic: the state as a standard economic agent

But what if this metaphor is just wrong? What if it was always a normative assertion by a faction of academic theoreticians on a roll rather than an argument based on the historical evolution of actual states. What if the theory was an irresistible platform for large corporations who preferred to return to the good old days of laissez faire over a wise or sustainable political economic strategy? What if a failed firm enforces a limited reallocation of labour and capital, and a failing state collapses the effective mechanisms for democratic representation, the stability of capitalism, social integration and public order as such?

Not only does the supply-side revolution reintroduce market failures where they had always, historically, failed, it introduces state failures where they hadn’t previously existed.

As the economic theories of contract and property rights make clear, the higher the complexity of a good or product, the higher the risk of so-called ‘asymmetrical’ contracts in which the seller has more information than the buyer and hence can exploit that buyer. This is a fundamental problem when the state becomes that customer at the taxpayers’ expense. Transaction cost theory shows that trying to manage such asymmetrical contracts leads to massively increased costs. And these costs can never be rendered efficientbecause of the intrinsically unbalanced nature of the original contract, because of the complexity of the good. After thirty years the evidence suggests that introducing businesses into the UK state and competition between states produces the worst of both public and private regimes.

In the case of welfare reforms, the UK norm has become one of profit-seeking firms engaged at the tax-payers expense but in thoroughly non-competitive conditions. The resulting failure to produce either high quality services or lower costs has forced the state into doomed games of ever more Kafkaesque remedial action because of its continuing statutory responsibility for outcomes. Thus, in the name of this continuing supply-side experiment our schools, health service, prisons, transport services and social care institutions have become text-book case studies for ‘moral hazard’, in which private providers have few incentives to avoid risky or perfunctory behaviour because of the de facto insurance of continued public payment.

Private provision and its effect on government accountability

And this is before you consider the conflicts of interest that increasingly run through UK policymaking structures like a stick of rock. A relatively hidden dimension of today’s crisis of state failure is the increasingly pervasive role for private businesses throughout the entire state administration. After a sabbatical in the Cabinet Office Matthew Flinders reported that UK central government had lost the capacity to operate ‘meta-governance’ over state authority. That was in 2005. Since then that authority has increasingly been gifted into private hands. This process of dis-integrating state capacity was intensified after 2010 under the renewed supply-side zeal of the coalition and Conservative governments.

In 2015 Ruth Dixon and Christopher Hood found that reported administration costs in the UK had risen by 40% in constant prices over the previous thirty years, despite a third of the civil service being cut over the same period, whilst total public spending doubled. Running costs were driven up most in the outsourced areas. Deep failures of service, complaints, and judicial challenges had soared. This was in no respect the ‘better government for less money’ promised by governments of left and right. These reforms have also undermined the accountability of government because the more the state has become structurally dependent on private provision the harder it’s become to reverse even openly failing policies: the state capacity that used to be there has frequently been destroyed. The administrative chaos around Brexit demonstrate to the wider public the dysfunction that those who depend on the state have suffered for years.

The democratic principle of fiscal consent is that people are willing to pay their taxes because the liabilities are fair and the revenues never confiscated. But that principle is severely stretched. The wealthiest firms have escaped their side of the fiscal contract through an international race to the bottom on tax rates, standards, and enforcement. In the meantime the burden of continuing taxation has been pushed onto less mobile factors such as labour, consumption, and small and medium-sized businesses.

And all of this might have been worth it had we gained the promised renaissance of investment, innovation, higher quality employment, and growth that was supposed to occur spontaneously when the state was got out of the way. But what we have seen instead is the transformation of post-war democratic capitalism from a system of wealth-creation to one of wealth extraction.

A process of financialisation has occurred on three levels: financial markets and institutions increasingly displace other economic sectors as the source of profitable activity. Non-financial corporations are becoming financialized through a regime of maximizing shareholder value, wherein profits are increasingly extracted for higher executive pay through share buy-backs and dispersed through higher share dividends rather than reinvested. Finally, finance has penetrated into every aspect of life as people are increasingly incorporated into financial activity, and to a degree that significantly increases the systemic risk inherent in the boom and bust cycles of poorly regulated financial markets.

The existing structural divisions and the EU referendum

For a doctrine to require a super-human rationality to function as promised makes it totalitarian, whether that rationality is social, as in Marxism-Leninism, or utilitarian, as in neoliberalism: it requires a perfect consistency of human character. But it’s also in the nature of such ideologies that in the face of often terrible social consequences their dogmatism encourages the doubling down on their projects in the belief that the validity of the programme will be finally proved at the point of completion. As a result, the energy of these doctrines only becomes fully unspooled once the disorder that they create has spread to every single part of the polity. Hard Brexit is an invitation from supply-side zealots to enter the full disorder of a ‘liberated’ market.

The Global Financial Crisis was also used as a pretext by George Osborne for an acceleration of the supply-side project but that same government was heedless enough of the social consequences to offer an opportunity for a public judgement on the current direction of travel: the 2016 Referendum. The findings on subjective attitudes are telling. Those most likely to vote Leave were:

  • Those finding it difficult to manage financially (70%) or just about getting by (60%);
  • Those who believed Britain has got a lot worse in the last ten years (73%);
  • Those who think things have got worse for them rather than other people (76%);
  • Those who perceive themselves as working class (59%). Those who see themselves as English rather than British (74%) or more English than British (62%).

These are constituencies built by the supply-side revolution. They were unlikely to be persuaded by a Remain campaign that spoke only of the economic joys of the status quo. The voting split for Remain versus Leave is between the centres of the new knowledge economy – rooted in ICT and services – and those of the rural, industrial and mid-range technology economies, abandoned by a state no longer understood by government as the historical midwife of development.

These trends support the worrying thesis that there are deepening structural divisions in advanced capitalist economies between those higher educated voters who prefer the labour market dynamism of highly liberalised economies, versus those with little hope of achieving a stake in any such system.[1] The rising emphasis on English national identity follows as a reaction to the unmanageable pace of globalisation: the scale of displacement of manufacturing activities by imports into a region drove perceptions around the risks of immigration more than the scale of immigration as such. This is hardly a trajectory compatible with democracy.

It was under these conditions that the referendum was heralded by Leave as the solution to the collective pain and frustration of an already divided society. Under the UK’s constant leadership the EU had often become a champion of neoliberal policies. More often, however, it had acted as a brake on the more extreme preferences of UK supply-sider governments. It was the Conservative, Labour and Liberal parties in government that made of the British state both an inefficient public regime and an increasingly extractive private regime dominated by large corporations. The historical irony is that the supply-side revolution has effectively built the state that haunted the fever dreams of the public choice theorists.

Brexit as the last chance saloon

So why are we leaving the largest trading block in the world rather than having an empiricist public debate about the systemic crisis of the domestic political economy? One reason is that this crisis creates no neat division between party lines as it did in 1979: no party but the Greens gains from discussing their role in these developments. For Labour it is the deepest ideological division between its right and left. The expressive function of parties is further discouraged when the most powerful actors across the political economy are likewise implicated, from the City to the CBI. Even if supply-side reforms hadn’t built so powerful a large business constituency for their extension, it would be awkward for mainstream elites to call for the renewal of central and local state capacity after so many years of insisting its relative incompetence.

The entire history of empiricist political economy tends to teach us that both states and markets have their virtues and their vices. The virtues are typically interactive. Cooperative solutions tend to be more efficient than markets at solving problems characterised by complexity and uncertainty: Germany’s stakeholder production regime is exceptionally functional. Given the urgency of climate change the debate we ought to be having is about how to develop a political economic strategy with ecology at its very core. Even were we not dangerously behind on climate mitigation it is unclear how the trend towards increasing social polarisation driven by a doctrinally and practically corporate-captured state could be reversed without a radical shift in the political economic paradigm.

But in the face of these realities the strategy of the hard Brexiteers is uniquely unwise: it is to accelerate to the point of ‘completion’ the already failed supply-side experiments of the last thirty years and to deny climate change, all in pursuit of arrangements that exist nowhere but in the pages of the economic utopias of the 1960s. Brexit militants have offered no precise strategy for free-market greatness because it exists in no realisable place: the days of the British Empire are mercifully finished, a democratic free market is a fantasy. For its leadership, Brexit is the last opportunity to radically dismantle the state-as-economic-referee as the window on the popularity of neoliberalism starts to close. It is the hard right equivalent of rallying for Soviet Communism in 1989. As Arthur Koestler wrote of his former ideological zeal, “Gradually I learned to distrust my mechanistic preoccupation with facts and to regard the world around me in the light of dialectic interpretation. It was a satisfactory and indeed blissful state.” Koestler was talking about communism, but it sounds familiar for a reason.

When it comes to history repeating itself, it is both tragic and farcical that it is the most militant supply-siders of all who were crowned by the 2016 Referendum. It is this faction above all that gets the diagnosis of our current condition most exactly wrong. It is their idea of a cure that would be most lethal to the British body politic.

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When we voted for Brexit we knew it would cause hardships, but the main aim is to destroy the status quo, and rebuild a new political reality as a sovereign nation, most Brit’s today don’t care or remember the Empire we just want decent lives for ourselves and our family! Richard Branson said on morning TV that if they hold a new referendum in 5 years the remainers would win as most Brexiters will be dead from old age, which just goes to show how out of touch he is, all young hard working (non University indoctrinated/eductated) voted leave, also… Read more »

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Major Syrian Army Assault On Southeast Idlib As Sochi Deal Unravels

Though the Syrian war has grown cold in terms of international spotlight and media interest since September, it is likely again going to ramp up dramatically over the next few months. 

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Via Zerohedge


The Syrian Army unleashed a major assault across the southeastern part of Idlib province on Saturday, a military source told Middle East news site Al-Masdar in a breaking report. According to the source, government forces pounded jihadist defenses across the southeast Idlib axis with a plethora of artillery shells and surface-to-surface missiles.

This latest exchange between the Syrian military and jihadist rebels comes as the Sochi Agreement falls apart in northwestern Syria, and in response to a Friday attack by jihadists which killed 22 Syrian soldiers near a planned buffer zone around the country’s last major anti-Assad and al-Qaeda held region. The jihadist strikes resulted in the highest number of casualties for the army since the Sochi Agreement was established on September 17th.

Though the Syrian war has grown cold in terms of international spotlight and media interest since September, it is likely again going to ramp up dramatically over the next few months.

The Al-Masdar source said the primary targets for the Syrian Army were the trenches and military posts for Hay’at Tahrir Al-Sham in the towns of Al-Taman’ah, Khuwayn, Babulin, Haish, Jarjanaz, Um Jalal, and Mashirfah Shmaliyah. In retaliation for the Syrian Army assault, the jihadist rebels began shelling the government towns of Ma’an, Um Hariteen, and ‘Atshan.

Damascus has been critical of the Sochi deal from the start as it’s criticized Turkey’s role in the Russian-brokered ceasefire plan, especially as a proposed ‘de-militarized’ zone has failed due to jihadist insurgents still holding around 70% of the planned buffer area which they were supposed to withdraw from by mid-October. Sporadic clashes have rocked the “buffer zone” since.

Russia itself recently acknowledged the on the ground failure of the Sochi agreement even as parties officially cling to it. During a Thursday press briefing by Russian Foreign Ministry Spokesperson Maria Zakharova admitted the following:

We have to state that the real disengagement in Idlib has not been achieved despite Turkey’s continuing efforts to live up to its commitments under the Russian-Turkish Memorandum of September 17.

This followed Russia also recently condemning  “sporadic clashes” and “provocations” by the jihadist group HTS (the main al-Qaeda presence) in Idlib.

Likely due to Moscow seeing the writing on the wall that all-out fighting and a full assault by government forces on Idlib will soon resume, Russian naval forces continued a show of force in the Mediterranean this week.

Russian military and naval officials announced Friday that its warships held extensive anti-submarine warfare drills in the Mediterranean. Specifically the Russian Black Sea Fleet’s frigates Admiral Makarov and Admiral Essen conducted the exercise in tandem with deck-based helicopters near Syrian coastal waters.

Notably, according to TASS, the warships central to the drill are “armed with eight launchers of Kalibr-NK cruise missiles that are capable of striking surface, coastal and underwater targets at a distance of up to 2,600 km.”

Since September when what was gearing up to be a major Syrian-Russian assault on Idlib was called off through the Russian-Turkish ceasefire agreement, possibly in avoidance of the stated threat that American forces would intervene in defense of the al-Qaeda insurgent held province (also claiming to have intelligence of an impending government “chemical attack”), the war has largely taken a back-burner in the media and public consciousness.

But as sporadic fighting between jihadists and Syrian government forces is reignited and fast turning into major offensive operations by government forces, the war could once again be thrust back into the media spotlight as ground zero for a great power confrontation between Moscow and Washington.

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Trump Quietly Orders Elimination of Assange

The destruction of Assange has clearly been arranged for, at the highest levels of the U.S. Government, just as the destruction of Jamal Khashoggi was by Saudi Arabia’s Government.

Eric Zuesse

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On June 28th, the Washington Examiner headlined “Pence pressed Ecuadorian president on country’s protection of Julian Assange” and reported that “Vice President Mike Pence discussed the asylum status of Julian Assange during a meeting with Ecuador’s leader on Thursday, following pressure from Senate Democrats who have voiced concerns over the country’s protection of the WikiLeaks founder.” Pence had been given this assignment by U.S. President Donald Trump. The following day, the Examiner bannered “Mike Pence raises Julian Assange case with Ecuadorean president, White House confirms” and reported that the White House had told the newspaper, “They agreed to remain in close coordination on potential next steps going forward.”

On August 24th, a court-filing by Kellen S. Dwyer, Assistant U.S. Attorney for the Alexandria Division of the Eastern District of Virginia, stated: “Due to the sophistication of the defendant and the publicity surrounding the case, no other procedure [than sealing the case, hiding it from the public] is likely to keep confidential the fact that Assange has been charged. … This motion and the proposed order would need to remain sealed until Assange is arrested in connection with the charges in the criminal complaint and can therefore no longer evade or avoid arrest and extradition in this matter.” That filing was discovered by Seamus Hughes, a terrorism expert at the Program on Extremism at George Washington University. On November 15th, he posted an excerpt of it on Twitter, just hours after the Wall Street Journal had reported on the same day that the Justice Department was preparing to prosecute Assange. However, now that we know “the fact that Assange has been charged” and that the U.S. Government is simply waiting “until Assange is arrested in connection with the charges in the criminal complaint and can therefore no longer evade or avoid arrest and extradition in this matter,” it is clear and public that the arrangements which were secretly made between Trump’s agent Pence and the current President of Ecuador are expected to deliver Assange into U.S. custody for criminal prosecution, if Assange doesn’t die at the Ecuadorean Embassy first.

On November 3rd (which, of course, preceded the disclosures on November 15th), Julian Assange’s mother, Christine Ann Hawkins, described in detail what has happened to her son since the time of Pence’s meeting with Ecuador’s President. She said:

He is, right now, alone, sick, in pain, silenced in solitary confinement, cut off from all contact, and being tortured in the heart of London. … He has been detained nearly eight years, without trial, without charge. For the past six years, the UK Government has refused his requests to exit for basic health needs, … [even for] vitamin D. … As a result, his health has seriously deteriorated. … A slow and cruel assassination is taking place before our very eyes. … They will stop at nothing. … When U.S. Vice President Mike Pence recently visited Ecuador, a deal was done to hand Julian over to the U.S. He said that because the political cost of expelling Julian from the Embassy was too high, the plan was to break him down mentally…   to such a point that he will break and be forced to leave. … The extradition warrant is held in secret, four prosecutors but no defense, and no judge, … without a prima-facie case. [Under the U.S. system, the result nonetheless can be] indefinite detention without trial. Julian could be held in Guantanamo Bay and tortured, sentenced to 45 years in a maximum security prison, or face the death penalty,” for “espionage,” in such secret proceedings.

Her phrase, “because the political cost of expelling Julian from the Embassy was too high” refers to the worry that this new President of Ecuador has, of his cooperating with the U.S. regime’s demands and thereby basically ceding sovereignty to those foreigners (the rulers of the U.S.), regarding the Ecuadorian citizen, Assange.

This conservative new President of Ecuador, who has replaced the progressive President who had granted Assange protection, is obviously doing all that he can to comply with U.S. President Trump and the U.S. Congress’s demand for Assange either to die soon inside the Embassy or else be transferred to the U.S. and basically just disappear, at Guantanamo or elsewhere. Ecuador’s President wants to do this in such a way that Ecuador’s voters won’t blame him for it, and that he’ll thus be able to be re-elected. This is the type of deal he apparently has reached with Trump’s agent, Pence. It’s all secret, but the evidence on this much of what was secretly agreed-to seems clear. There are likely other details of the agreement that cannot, as yet, be conclusively inferred from the subsequent events, but this much can.

Basically, Trump has arranged for Assange to be eliminated either by illness that’s imposed by his Ecuadorean agent, or else by Assange’s own suicide resulting from that “torture,” or else by America’s own criminal-justice system. If this elimination happens inside the Ecuadorean Embassy in London, then that would be optimal for America’s President and Congress; but, if it instead happens on U.S. soil, then that would be optimal for Ecuador’s President. Apparently, America’s President thinks that his subjects, the American people, will become sufficiently hostile toward Assange so that even if Assange disappears or is executed inside the United States, this President will be able to retain his supporters. Trump, of course, needs his supporters, but this is a gamble that he has now clearly taken. This much is clear, even though the rest of the secret agreement that was reached between Pence and Ecuador’s President is not.

Scooter Libby, who had arranged for the smearing of Valerie Plame who had tried to prevent the illegal and deceit-based 2003 invasion of Iraq, was sentenced to 30 months but never spent even a day in prison, and U.S. President Trump finally went so far as to grant him a complete pardon, on 13 April 2018. (The carefully researched docudrama “Fair Game” covered well the Plame-incident.) Libby had overseen the career-destruction of a courageous CIA agent, Plame, who had done the right thing and gotten fired for it; and Trump pardoned Libby, thus retroactively endorsing the lie-based invasion of Iraq in 2003. By contrast, Trump is determined to get Julian Assange killed or otherwise eliminated, and even Democrats in Congress are pushing for him to get that done. The new President of Ecuador is doing their bidding. Without pressure from the U.S. Government, Assange would already be a free man. Thus, either Assange will die (be murdered) soon inside the Embassy, or else he will disappear and be smeared in the press under U.S. control. And, of course, this is being done in such a way that no one will be prosecuted for the murder or false-imprisonment. Trump had promised to “clean the swamp,” but as soon as he was elected, he abandoned that pretense; and, as President, he has been bipartisan on that matter, to hide the crimes of the bipartisan U.S. Government, and he is remarkably similar in policy to his immediate predecessors, whom he had severely criticized while he was running for the Presidency.

In any event, the destruction of Assange has clearly been arranged for, at the highest levels of the U.S. Government, just as the destruction of Jamal Khashoggi was by Saudi Arabia’s Government; and, just like in Khashoggi’s case, the nation’s ruler controls the prosecutors and can therefore do whatever he chooses to do that the rest of the nation’s aristocracy consider to be acceptable.

The assault against truth isn’t only against Assange, but it is instead also closing down many of the best, most courageous, independent news sites, such as washingtonsblog. However, in Assange’s case, the penalty for having a firm commitment to truth has been especially excruciating and will almost certainly end in his premature death. This is simply the reality. Because of the system under which we live, a 100% commitment to truth is now a clear pathway to oblivion. Assange is experiencing this reality to the fullest. That’s what’s happening here.

—————

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

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Libya’s Peace Process Dies in Palermo

The best the Palermo negotiators could come up with at the end was a bland statement declaring their hope that sometime in the future all the Libyan forces will meet to sort out their differences.

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Authored by Richard Galustian for the Ron Paul Institute for Peace and Prosperity:


“Resounding flop” was the verdict of Italy’s former prime minister Matteo Renzi on this week’s Libya peace conference held in Palermo. He’s not wrong. The conference hosted by Italy’s new government achieved the remarkable feat of making Libya’s tensions worse, not better. Acrimony broke out between the parties, and Turkey’s delegation walked out, its vice president Fuat Oktay accusing unnamed States of trying to “hijack the process.”

Some sources in Palermo suggested, yet to be verified, that the US thought the Conference was not too bad: a joke if true.

Moreover the mystery we might ask is what “process” is there to hijack? Because the truth is, the peace plan the conference was supporting is already dead.

That plan was the brainchild of the United Nations, launched more than a year ago with the aim of ending Libya’s split between warring Eastern and Western governments with elections in December.

Even before the first delegates set foot in the pleasant Sicilian city of Palermo this week, the UN admitted the election date of December 10 they had decided to scrap.

The eastern government, led by the parliament in Tobruk, had made moves in the summer to organize a referendum on a new constitution which would govern the elections. But no referendum was held, and most Libyans agree it would be pointless because Tripoli, home to a third of the country’s population, is under the iron grip of multiple warring militias who have the firepower to defy any new elected government. Hours after the delegates left Palermo, those militias began a new bout of fighting in the Tripoli suburbs.

The best the Palermo negotiators could come up with at the end of the talks was a bland statement declaring their hope that sometime in the future all the Libyan forces will meet in a grand conference to sort out their differences – and this after four years of civil war. To say that chances of this are slim is an understatement.

Dominating the Palermo talks, and indeed Libya’s political landscape, was and is Field Marshall Khalifa Haftar, the commander of the Libyan National Army, the country’s most powerful formation. In four years, the LNA has secured Libya’s key oil fields and Benghazi, its second city, ridding most of the east Libya of Islamist militias.

Haftar met reluctantly negotiators in Palermo, but insisted he was not part of the talks process. The Italian government press office said Haftar was not having dinner with the other participants nor joining them for talks. Haftar specifically opposed the presence of the Muslim Brotherhood champion, Qatar, at the event along with Turkey.

Haftar clearly only attended because he had a few days before visiting Moscow – which sent to Sicily Russia’s Prime Minister Dmitry Medvedev – and because also of Egyptian President Sisi’s presence along with his allies.

Possibly Haftar was simply fed up. Twice in the past two years he has attended previous peace talks, hosted each time in Paris, giving the nod to declarations that Libya’s militias would dissolve. Yet the militias remain as strong as ever in Tripoli.

Haftar is detested by the militias and the Muslim Brotherhood (MB) but supported by a large segment of the population – 68 percent, according to an opinion poll by America’s USAID. His popularity is based on a single policy – his demand that security be in the hands of regular police and military, not the militias.

Not everyone is happy, certainly not Turkey, which is backing Islamist, MB and Misratan forces in western Libya who detest Haftar. Yet Turkey’s greatest statesman, the great Kamal Ataturk, was a champion of secularism: After the collapse of the Ottoman Empire following World War One Turkey faced the prospect of utter disintegration, and it was Attaturk who rose to the challenge, defending the country’s borders, while ordering that the mullahs, while responsible for spiritual welfare, have no political power.

Political Islam is not popular in Libya either. Libya is a Muslim country, its people know their faith, and most want government to be decided through the ballot box.

The problem for Libya is what happens next with the peace process broken. Haftar has in the past threatened to move on Tripoli and rid the militias by force if they refuse to dissolve, and it may come to that – a fierce escalation of the civil war.

The second possibility is that Libya will split. The east is, thanks to the LNA, militarily secure. It also controls two thirds of the country’s oil and operates as a separate entity, down to it banknotes, which are printed in Russia while the Tripoli government’s are printed in Britain. A formal split would be an economic boon for the lightly populated east, but a disaster for Tripolitania, its population losing most of the oil, its only source of export income.

Yet with the failure of peace talks, and no sign of Tripoli militias dissolving, military escalation or breakup seem more likely than ever.

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