wide eyed wonderings of the undecided
Solutions to the global economic crisis
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The Put People First campaign makes a series of demands. They amount to a global restructuring in favour of social-democratic Keynesian principles. Whilst not overly radical it is suggested by many that they present a series of unworkable utopian dreams. I take each in turn and debate whether this is the case:
Ensure democratic governance of the economy
1. Compel tax havens to abide by strict international rules.
This is not difficult, in 1999 the OECD began a programme to inhibit money laundering and found that tracking and blocking movements of capital was well within their grasp. The technology is there to do it, the political will is a different question. But when you have very public officials (the prime minister for example) calling a close to, or more visibility for tax heavens, the question is far from uptopian. (It does not help that HM Revenue and Customs (our tax collector) leases its building from a company based in Jersey!)
2. Insist on fundamental governance reform of the World Bank and International Monetary Fund (IMF).
This already happened in the G20 meeting. The IMF has extended an international credit facility (Special Drawing Rights) to such an extent it amounts to a world currency. This is a fundamental restructuring of power at the IMF, pulling strength from the dollar, which acted as the world currency. It has given many more nation states (though not their inhabitants) far more voice at the IMF. The voting structures at the Bank, however remain thoroughly anti-democratic and require campaigning to reform.
3. Make all financial institutions, financial products and multinationals transparent and publicly accountable.
Well, the government owns huge sections of finance now in the UK. So in that sense they are much more publicly accountable. Multinationals are generally quite transparent, though obviously not publicly accountable.
Jobs: Decent jobs and public services for all
4. Ensure a massive investment in a green new deal to build a green economy based on decent work and fair pay.
There have been massive public investment programmes since the war, without which capitalism fails. So this is not a significantly unheard of demand. The idea it should go to productive use in the real economy creating jobs, rather than finance, makes this a demand for the UK to be like Sweden, France, Japan etc… and indeed to be like what the UK was between 1945-1979. So not particularly radical a demand at all.
5. Invest in and strengthen public provision of essential services.
Same as above really. Investing in public services is common to most advanced economies. It was only the US and UK that followed the radical doctrines of Thatcher & Reagan who decided not to. Even under New Labour we see massive spending in NHS, the only thing different about the Put People First demand is that it does not ask for privatisation.
6. Work to ensure sufficient emergency funding to all countries that need it, without damaging conditionalities attached.
Marshall Plan, post war. Not unprecedented… Some modern development aid, particularly all that from the Nordics and Canada follows this principle, so not at all impossible.
Justice: End global poverty and inequality
7. Deliver 0.7% of national income as aid by 2013, deliver aid more effectively and push for the cancellation of all illegitimate and unpayable developing country debts.
Debt cancellation is underway, so this is a welcome reminder but not a crazy overhaul. Same as above…
8. Ensure that poorer states are allowed to take responsibility for managing their economies, including controlling cross-border capital flows.
Capital controls have been the norm between 1940 – 1980, it took a massive recession, global restructuring program and a lot of right wing propaganda to get rid of them. Empirically capital controls have proved better for developing countries like Chile in the 1980s debt crisis, and developed countries like Germany and Spain today. Nothing at all utopian about the demand.
9. Stop pushing developing countries to liberalise and deregulate their economies, and do not attempt to rush through a completion of the Doha trade round, a deal that developing countries have rejected several times.
The 1999 WTO trade negotiation, which was in Seattle and brought to an absolute standstill by myriad protesters (communists, church-goers anarchists etc)… paved the way for civil society leaders and developing countries to call a halt to liberalisation conditions. Since then all attempts have stalled. This request follows a process that is well under way.
Climate: Build a Green Economy
10. In addition to the green new deal (recommendation 4), introduce the robust regulatory requirements and financial incentives needed to deliver a green economy.
More tricky. In terms of potential, the government owns huge amounts of finance in the UK. That is tax payers money, so reorientating how they run our banks is not impossible, but requires very outward expression of desire from people. Nationalised banks, channelling investment into the productive, job creating economy can be very progressive, yet is not utopian. Japan and South Korea built their economies on state directed credit.
11. Push for a deal at Copenhagen to agree substantial, verifiable cuts in greenhouse gases, which will limit temperature increases to well below 2°C.
Keeping global climate temperature increases to well below 2°C is by far and away the hardest and most pie-in-the-request. The concern is though that failure to do so will apparently cause all sorts of kafuffle. I would say that political will rather than human capacity remains at the core of this issue. Tradable carbon rationing would not only work as a progressive tax but also be able to tackle the issue at hand. Of course rations have been used in history, but it required a global disaster situation.
12. Commit to substantial new resource transfer from North to South, additional to Overseas Development Assistance (ODA), to support adaptation and sustainable development in poor countries.
They sort of do this, there is large amounts of aid that goes to the South. Its not helped by (a very modern) system of global finance which has, since 1987 transferred from South to North 20 times the amount of aid given from North to South ($375 billion).
Tags: economic crisis, G20, G20 protest, Put people first, Solutions
Debating the G20
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[questions in bold my answers below]
The main reason for this march is based on the fact that global international decision making processes are not democratic but rather ruined by “political elites and unaccountable corporations — not the views and values of the world’s people”. This is insane. We have elected our world leaders based on the fact that we think they are the right people to lead us on key critical global decisions.
78% of the population did not vote Labour – not considering the unknowable amount of illegal and unregistered workers in this country who aren’t allowed to vote, yet remain vital to the economy. This does not even begin to approach the question of how shallow that democratic choice is – I had to chose between labour and Tory.
‘Critical global issues’ are not separate from the political/corporate/institutional powers/ ‘key decision makers’ they respond to. Instead, the ‘global financial crisis’ is inextricable from power – the problem here is not that we elect people to respond to global issues which are ‘out there’, but that we (semi) elect leaders who constitute these global issues.
This crisis is not a separable ‘fact’ from people’s lives – democracy is a fairly hollow notion if it doesn’t encompass one’s work and economic life – the financial crisis is a very real aspect of everyday life for people – a real democratic choice would be exercising democracy in the workplace.
How in the world can it be more democratic…If we can’t trust them to make the right decisions then we are pulling the rug from under the fundamentals of democracy.
Governments don’t act in a natural setting; there are many different economic limits and imperatives which frame the choices governments have.
With regards to access to power, a very limited number of people have access to ‘key decision makers’. Those that do tend to be top CEO’s/gov officials/civil society leaders, who move in very small social/political circles, and influence these decision makers. The majority of the population are not in a position – literally – to share in the upper echelons of political power. A march like tomorrow’s is an opportunity for this majority to have their individual and collective aspirations voiced, recognised and be of influence.
Also, the summit is being held for exactly the reason the people are marching….
No it isn’t.
Firstly, the notion that a group of 20 people could come together in a room and create such massive outcomes for the majority of the world’s population is something to protest about in itself; it represents a profound failure of democracy.
G20 suggest they are working towards a restoration of the economy to what it was before, albeit a ‘healthier’, stronger and altogether more entrenched version. But what was that economy before? Restoring what economy?
Real hourly wages for about 80% of the workforce in the US are at about their 1979 level
Real income has fallen for the average person in the US and UK since the 2000.
Since 1987 there has been a $375billion NET transfer from developing countries to the developed world (that’s more than a reverse Marshall Plan).
From 1980 to 2000, the ratio between CEO pay and employee pay changed from 50 to 525 x. So, whilst both the marchers and the G20 may be talking about economic recovery and stability, their ideas and experiences of both could not be more different. Surely this changed discrepancy in earnings demonstrates the need for ‘employees’ to protest about their experiences of an unstable economic and working life.
The fact that the summit is held shows how they are working together and trying to negotiate the best way of out this mess.
No doubt that the members of this summit are working together to best negotiate this mess, but that negotiation won’t be to defend the interests of 95% of the world’s population. No G8 meeting in history has.
The marchers assume the politicians will sit there with cigars, giving each other brown envelops of cash and back scratching. The politicians have put every penny they have into every possible “public best interest” cause with this recession.
As an aside, this summit cost £19 million to stage. Gulp… I hope those hotels and restaurants are employing a lot of people…
The public interest does not include the billions which government spends subsidising arms manufacturers. I’d also argue that the best public interest would be not to bail out banks who then repossess the houses of their borrowers (like Northern Rock), or subsidising the ill-fated salaries and pensions of investment bankers. This money could, and should be spent on actual growth-creating investment like green technology etc, or indeed buying banks to run them for the interest of the public, not profits and shareprice
This march is being held to make the summit aware of “putting people first”….. what? How have they not put people first to date in this recession? The boom and lies/corruption built up over YEARS, probably about 20.
This crisis is not an outcome of a particular set of bad decisions/lies/corruption, but is the outcome of a system of organising society and economies that has fostered the circumstances I have mentioned above. The economy has never functioned to put the vast majority of people first.
Boom and bust is inevitable in world economics.
Real hourly wages for about 80% of the workforce in the US are at about their 1979 level.
CEOs (for top 350 companies according to Business Week) pay in 2000 was £14 million, whilst employee pay was £27,000.
I think it was in a 1996 ‘bust’ AT&T fired 40,000 employees, their share price rocketed up, instantly making their CEO £5m
The global poor have rode out every boom & bust – securing their dollar a day.
If Boom and Bust may be inevitable (though of course nothing is), it seems to be a permanent boom for some, and a permanent bust for others.
The current world leaders could only do so much prior to the bust to prevent it. Now, they are doing everything possible to help the people out of this. Investing in multinational global organisations is not for the benefit of the corporations, it is for the benefit of the people.
For the benefit of some people. Not very many.
If those companies/banks went bust……… that would be real worldwide disaster and people would be suffering 1 million times more than they currently are.
Taking away 1000000x the dollar a day, would indeed be a disaster. But its no picknick now. Really-existing-capitalism in boom time did not and can not deliver progress for the vast majority of people who are the foundations of it.
The march will be excellent for awareness but i think they have missed the point on this one.
Many people will miss the point, especially the 20 in the meeting.
Governments can’t pledge money they don’t have and at the moment, the majority of the states are on the brink of bankruptcy.
I agree in a way, but the US went bust with the Nixon shocks in 1973, that hasn’t stopped their state subsidised military and stock market since.
That is a harsh reality that no march, regardless of the amount of people attending, will change over night.
Totally agree. A general strike might – after all what secured welfare states and the new deal etc?
Politicians standing out on a balcony declaring that they are going to invest billions in 3rd world or green energy means nothing.
Agree entirely
They can pledge it, but there is no cash there to deliver.
They did a remarkable job finding billions to bailout the banks, and still find cash left over to pay for nuclear bombs (trident). In many ways it’s not about pledging new cash, its about reorganising the way that cash gets handed around and to what.
What this march should be about is getting China to do more. That is where the problem is, both economically and on climate.
I really don’t know much about this, but as I understood it, China subsidise the US economy by holding trillions of $ in reserve and flooding the US/UK service economy with real goods at dirt-cheap prices. But yeah, China is an awful state.
Tags: economic crisis, economics, G20, G20 protest, politics
Its the politics, stupid – the ‘economic’ crisis
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As a professional student it’s pretty rare for anything I do to have any connection with the real world. It just so happens, however that the global political economy is falling apart right when I am studying global political economy.
Crisis is a great time for academics, as it is for Jehovah’s Witnesses; because they all believe in the imminent coming of something… Given all this I thought I’d share the following:
What credit crunch is not about:
people not saving, bankers bonus payments, ‘regulation or deregulation’, ‘free-markets’
What credit crunch is about:
- Since 1980, the UK economy has grown at around 2% a year, the forty years before it grew at nearly 5%.
- Since 1980 household income has barely grown and has fallen since 2000.
- To ‘make up’ for this, household debt is now 80% of total national income, compared to 20% 30 years ago.
If you have an economy that doesn’t make anything and doesn’t pay anyone to do so, it has to rely on people spending money they do not have to buy ’services’ (haircuts, consultancy etc). This needs banks (along with moustached Texans) to lend them the money to do so. This would be fine, but you can’t sustain an economy by cutting people’s hair.
It doesn’t work now and hasn’t for 30 years. For some reason the government is ploughing money that could be used to keep cricket on terrestrial, (or fund the arts council or build hospitals or whatever) and giving it to banks to try and sustain this debt-economy.
When they ‘work’, debt-economies are useless to everyone other than the finance-family (bankers, insurers etc) and landlords – nobody else makes any money. It’s the reason why everyday house prices and rents are so stupidly expensive in England. (There are of course other effects – more work than ever before is insecure ‘temp’ work, inequality is huge etc etc)
When debt-economies don’t work, and people can’t repay the money they were never given, everyone loses out. The recession wasn’t dropped from the sky and it has nothing to do with economics, it’s political.
On Saturday everyone from ‘The Campaign To Save The Libraries’, to the ‘Collective of Transgender Anarchists’ are joining together in London to suggest that 30 years of Thatchers economics isn’t working.
If you’re at all peeved about thousands of people losing jobs, rents being too high, and KP getting sacked, this is the time to say so.
Tags: credit crunch, debt, economic crisis, G20 protest, neoliberal
The neoliberal world order: The rise of the state
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This article shall investigate the emergence of neoliberalism, with a specific focus on monetarism. I question the notion that neoliberalism embodies the fruition of a market mechanism over the state. Rather, the state has changed its role to meet the needs of the financial sector.
The emergence of monetary policy and the crisis the preceded it
Monetarism is, in its strictest sense, merely a government policy. Grounded in the quantity theory of money, monetarism restricts government economic policy to simply ensuring a fixed growth in the money supply in line with a growth in output. It represents a fundamental turn away from the Keynesian policies that preceded it. The Keynesian economic ideology, practised in its various forms, extends government economic policies to demand management. Through government managed investment and social welfare, the role of policy is to target full employment (Clarke, 1987).
Monetary policy is predicated on the notion that with stable prices the market provides optimal allocation of credit, both nationally and internationally. Thus the role of government to monetarists remained crucial, but its scope shrunk. In October 1979 when the US Federal Reserve announced a shift towards monetary policies, chairman Volcker suggested, “monetarism offered the right policy prescriptions at the right time” (Volcker 2002). In attempting to understand why these policies emerged it is, therefore important to locate monetarism within a historical context.
The post-war economies, haunted by the ghosts of the Great Depression, instilled the ‘embedded liberal’ consensus: a recognition of the role that Keynesian demand management played in economic and political stability.
Capital controls were considered necessary to prevent the policy autonomy of the interventionist Keynesian state from being undermined by speculative capital flows. Faced with the recognition that open trade in both goods and finance were not compatible, finance was sacrificed to secure stable exchange rates, that was considered crucial to the open trade that the US economy, in particular desired. This normative framework was encrusted in the Bretton Woods institutions, which were the architecture of the post war global political economy (Heillenier, 1994).
The so called Keynesian period between the end of the war and the 1960’s saw great progress in economic growth, social welfare and employment, alongside continued progress of technology and production in both the US and Western European economies.
However, the progress in technology and diffusion of productive techniques had increased competition and squeezed profits. Faced with declining profit margins businesses were forced either raise prices, or cut costs (labour). The tension between declining rates of capital accumulation and the Keynesian commitment to countercylical demand expansion, gave way to the dramatic inflationary hikes – UK inflation touched 15% in January 1981. This inflationary pressure saw the US abandon the gold standard and with it the fixed exchange rate pillar of the Bretton Woods architecture. Thanks to the unique structural power that the Bretton Woods agreements had offered the US, they could continue to expand demand without fear of a run-on the dollar, as the rest of the world still demanded dollars (Hudson, 2003). Yet, even with this devalued dollar, the Keynesian contradiction of expanding demand in times of declining capital accumulation, inflation, debt and unemployment, could not be repaired. Eventually, they abandoned expanding demand and focused on the supply-side of economic management – a stable inflation rate. Releasing caps on interest rate and allowing market mechanisms to organise the allocation of credit (Clarke, 1987).
Understanding the policy and ideological shift of the late 1970’s is, I maintain, crucial to understanding the political and economic landscape that we see today. An assessment of the competing classical market-led the critical class-led explanations sheds light on the changes that were taking place and their effects.
The Classical Explanation for Monetarism
The market-led case for monetarism rests on the classical economic notion that the ‘market knows best’. Yet this timeless rallying cry tells us very little about why monetary policy emerged when it did or how its effects were felt across the economy. As late as 1976, when the post-war picture of the world economy was being redrawn, the Bretton Woods framework of controlling capital movements and ensuring domestic economic autonomy was retained in the amended IMF Articles of agreement. Yet a number of structural changes in the financial market were undercutting the rationale for such controls (Goodman & Pauly, 1995).
I shall outline the market driven reasons that compelled financial liberalization.
Initially, with faith gradually being restored to the European economic order following the war, there was generally more confidence in financial transactions, which was essential for greater involvement in financial speculation Technological progress, particularly communications and container ships, had allowed an increase in international trade and a growth in multinational firms. These large firms engaged in both productive and financial activity and so demanded greater use of international financial services. Digital technology had amplified that mobility and fungibility of money that made instant transfers very cheap and almost untraceable (Heillenier, 1994). This made it easier for firms to adopt swift exit and evasion strategies from state regulation and aided the movement of money between competing countries in search of higher returns. Where governments were serious about restricting such flows, they ran the risk of sacrificing the domestic productivity of their firms by preventing offshore direct investments. This made the gradual easing of controls in advanced countries inevitable, as they sort increasing deregulation to ensure their firms remained competitive (Goodman & Pauly, 1995). The declining domestic profits and strong regulatory environment in the US had forced banks to abandon their domestic focus and look abroad, particularly to the Euromarkets for greater returns. In addition massive financial activity caused by the oil price shock in 1973. From an almost negligible level in 1950’s, financial transactions had reached over $1trn-a-day by the 1990’s (Heillenier, 1994).
The increasing complex market forces backed by technological improvement had, according to this market explanation rendered capital controls a costly and unproductive policy and compelled policymakers to allow market forces to best manage credit accumulation, allocation and distribution.
The problem with this overly teleological, naturalised conception of market forces is that is ignores the pivotal role that states play. “Politics, within distinct state structures remains the axis around which international finance revolves” (Pauly, 1988:2).
State led neoliberalism
The role of the state in neoliberalism is often misunderstood. Conventional support and critiques neoliberalism, through limiting government to monetary policy only entails “the shrinkage of the state to regulatory functions only, and then as minimal as possible” (Mason, 2008).
Neoliberalism, rather than reduce state activity in the economy has is a transformation of its functions. Where Keynesianist government intervention involved supporting demand and labour in the economy – through social welfare spending, minimum wages etc, neoliberal government intervention entails supporting supply side concerns – those of business.
Federal spending in the in the US in 1980 was $59bln, by the turn of the century it had almost tripled – to $1789bln. The neoliberal era had seen state swell to an unprecedented size, but rather than social security and welfare, the state spent enormous quantities on subsidising corporations and funding the military-industrial complex. In addition to limiting the power of labour unions the neoliberal state has privatised many of its national industries, even the flagship NHS in Britain, is being gradually hired out to private companies, with the state picking up the tab.
In terms of financial markets that the importance of the state can clearly be seen today where, in time of liquidity crisis, $700bln of US state funds are being employed to absorb unreliable assets and to try and prompt confidence in the ‘market system’ by signalling its role as a lender of last resort. The finance industry has successive crises, with increasing magnitude since the return to monetarism in the 1970s Crisis management, by the state is an essential part of the financial apparatus in both the US and the rest of the world (Heillenier, 1994). Its role however extends beyond this.
The policy choices that allowed greater financial liberalisation were first in evidence is the creation of the Euromarkets in the 1960’s. At the time when Bretton Wood’s controlled financial framework still held sway, this market was a regulation-free environment for multinational corporations and banks to operate in. A supposedly ‘offshore’, ’stateless’ zone, the Euromarkets could not have developed without the sponsorship of the US state and British government allowing it to function free of regulation in London (Heillenier, 1994).
This initial baby step to the financial liberalization we see today, required state authority for its creation, and again the US had to play an important role in its survival when the Euromarket’s were threatened in the early 1970’s. The speculative capital flows that were threatening Bretton Woods exchange-rate stability compelled Japanese and Western European governments to consider coordinated capital controls in both sending and receiving countries, as well as in through-flow zones such as the Euromarkets. The US, with its strong position in finance blocked these moves and further extended pressure on other countries to relax their controls (Heillenier, 1994).
This liberalisation, led by the US across the world did not extend to trade, partly because the unique mobility of money makes policy coordination and regulation very difficult but also because the US benefited greatly from international currency speculation. The status of the US Dollar, as the international reserve currency made finance critical to US interests (Hudson, 2003).
This is an essential contribution. Global financial markets, and globalisation in general is too often characterised as an economic zone, torn away from state control for businessmen and market interests to run rampant. Yet precisely the opposite is true, state authority has played the fundamental role in the creation, maintenance and expansion of the global financial structures that determine the content of the market. Why the US chose to restructure the US economy along these financial lines, rather than adopting more radical Keynesian options such as centralised capital accumulation is an important.
The neoliberal balance sheet
History is not compelled by theories and logic; no assessment of policy can end in the abstract. Consequences are crucial to understanding the theory of neoliberalism and monetarism and why they came about. While the outcomes varied, in line with the different practices of neoliberal theory in different countries, they can be broadly characterised by three features: raising inequality, raising debt, and, most significantly a return to the hegemony the financial industry.
‘Finance’ is a complex network of institutions behind which stand individuals. The choice of governments such as the US or Britain to adopt the policies that transformed the economy in a way which benefited finance was, its argued, dictated by the whims of financial institutions and the individuals who operate them – the financial class (Dumenil & Levy, 2001).
Rooted in Marxist orthodoxy this argument rests on the principle that capitalism recurrently evolves towards large structural crises (which today’s crash could arguably considered the latest expression of). Capital only reasserts its dominance at these times of turbulence through transformations of its basic functionings (Dumenil & Levy, 2001).
The policy response to the structural inflationary crisis of the 1970’s, shaped capital’s transformation in the US and Britain. The monetarist policy of price stability over full employment meant that the interest rate to jumped to 18%, in the US in 1981.This resulted in the redistribution of profits from non-financial companies to the financial sector. In the US non-financial corporations were gifting almost a third of their profits to financial institutions through real interest payments throughout the 1980’s. Profit rates of US financial corporations, consequently, grew throughout that period to stand 10% higher than that of non-financial companies by the end of the 1990’s. Over the same period indebted developing countries, who had received large cheap loans in the 1970’s ended up transferring large proportions of wealth to financial corporations in the US and elsewhere, following the monetarist interest rate shock (Dumenil & Levy, 2001). Crucially “most of this profit is not generated from financing productive business: the world’s total stock of financial assets is three times as large as global GDP. In 1980, it was about equal to GDP” (Mason, 2008).
The key implication of this argument is that the sudden interest rate rises prolonged the effects of the crisis, as benefits from the recovery of firms profitability were transferred to lenders and diverted from employment and investment (Dumenil & Levy, 2001).
The class implications cannot be ignored. Between 1947 and 1973, the Keynesian era, the income of the poorest fifth of US families grew 116%, higher than any other group. Over the last three decades, while growth has averaged 1974 to 2004 it grew by just 2.8%. With declining real wages, debt has had to finance household spending. Personal household debt in the US now represents 98% of GDP, whereas in 1979 this figure was just 46%.
Any analysis that discounts the benefits and losses of certain interests group cannot be considered whole, which is why the Marxist approach here remains essential.
The decline of neoliberalism?
The recent financial crash has, momentarily at least, opened the intellectual space to question the dominant ideology that has ruled for the past three decades. Even Britain’s most conservative paper, The Daily Mail felt the need to run a double page spread titled “In defence of Capitalism” (Daily Mail, 25/09/08). Emerging economies, challenge the hegemonic status of the US, increasing the likelihood of protectionist responses. The British government is excising some leverage over financial corporations by directing their interest rates downwards, and new president elect Barack Obama had discussed measures for state supported public healthcare and a raise in the taxes of the richest.
However, when the ‘nationalised’ UK bank Northern Rock, repossess houses in order to secure the salaries of its directors, notions of a transformation of the state to support social justice over business interests, remains dubious.
Mandelson’s trading development for economics
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Earlier this week I had the ‘honour’ of sitting alongside Peter Mandelson in an EU Commission meeting about the (so called) Doha ‘Development’ round of WTO Trade negotiations. The meeting with representatives from ‘civil society’ was supposed to enlighten us all on the current ’state of play’ in the negotiations. Having written, read and ranted about development for so many years from an outside perspective, I was genuinely excited to see how things worked in a ‘closed meeting’.
Civil Society has always been a rather opaque term. Lying between business and government it tends to be made up of unelected groups representing various parts of the ‘general public’. NGOs, trade unions, community groups -in short, the good guys. Clearly what passes for civil society outside of my textbooks was rather different. As I mumbled and bumbled myself into the meeting I was faced with a room made up almost entirely of suited white men from all walks of… the business lobby. From Biscuit Advocacy to Chemical Manufactures, this was a wide landscape of diversity.
I cowered myself into a corner, desperately trying to avoid the perpetual one-minute networking that passes for conversation. When ‘Commissioner Mandelson’ strode (late) into the room the hubbub immediately subsided. The supremeo had entered.
Clearly dear Pete had better things to do with his time than sit around with us lot. He, word for word, stumbled through a speech clearly prepared by his assistants. In it he warned of the ‘negative popularism of protectionist measures’. He cooed lovingly about the prospects of genuine market opportunities in ravished developing countries, and the need to ensure that ‘world economic growth, above all else’ is pursued. It was in answering questions from the floor that he showed why he is such a successful politician. Carrying a library of information in his head he deftly reassured each concern raised by business about each particular article of legislation.
When an issue about worker rights raised by the church group, who like me had slipped through the net into ‘civil society’, they were skilfully and powerfully shot down. After some well placed mocking, Petey (as he is to me these days) patted us on the collective head with the invisible hand. ‘The rising tide of world economic growth will raise all ships’. Exactly, why place safegaurds about worker rights? Why place safeguards over environmental standards? We’ve got high living standards in the west, and it’s not like we had to fight for unions, democratic rights, safety standards etc during our industrialisation…. oh no wait.
It continues to amaze me, under the guise of rationality we place enormous faith in whatever ‘the market’ actually means. Trading, over not trading can lead to greater economic welfare and growth for all parties concerned. The research yields very mixed results – the direction of causality is always a problem, as is trying to control for other factors such as geographical conditions. Dani Rodrik at Harvard writes lucidly about the need for strong institutions required for trade to have a positive effect. Where strong education, health and actual civil society institutions exist, we all benefit. This entails demanding strong standards over workers rights – to toilet breaks, safety at work and enough of a wage to send kids to school, to name just a few.
Development though, will always be a power issue. When a group of white men can carve out ‘economic opportunities’ without voice from the very people who live the economic realities, you will never have development. Economics will never escape the political, and that’s why the facts of the market will never reveal the truth about the world.
climate change has no class
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(This article appears in Insight Magazine April 2008 )
When a social movement is championed by a prince, a Cambridge graduate on the roof of parliament and Waitrose shoppers across the land, you know you have a problem. Yet to say that climate change is of interest only to the middle class of the West is to miss the point entirely.
Much of the response to last months Plane Stupid demo illustrated a growing group of critics who claim that the green movement are little more than “fear-mongering, snobbish, isolationist puritans.” They suggest that the solutions offered to climate change are riddled with class prejudice. By attacking cheap flights and mass consumption they feel the green activists are instead conveying a “shrill middle-class disgust with the greedy masses and their bad habits.”
While the growing ideological debate over how to tackle climate change threatens to obscure action, the doubts over the existence of human-made climate change have, at last given way to reason. Those who still dismiss it as the ‘new millennium bug’ would do well look at the facts.
Between 1950 and 2005 average global temperatures increased by 0.7oC. Over the same period emissions of human-made green house gasses have mushroomed by over 70%. It takes a peculiar bloody mindedness (or funding from Exxon Mobile) to ignore the link. If global temperatures increase by 2oC over pre-industrial levels, we enter the realm of runaway climate change. It is just as dramatic as it sounds. 4 billion people could suffer water shortages, sea levels could rise by 7 metres and the permafrost of the west Siberian peat bogs begins to melt, unleashing 70 billion tonnes of stored methane, the Napalm of greenhouse gases. The cautious but rather aptly titled Stern Report calculated that failing to act would cost us at least 5% but possibly 20% of global GDP.
Slowing the climate’s growing fever is the essential challenge of our age, yet the limp response so far, which is defined by both the moralistic ‘green consumerism’ and their conservative critics, is ineffective and snooty.
When legitimate concerns over emissions are voiced, they are easily perceived as killjoy rantings from a privileged minority. The thick smug that emerges from the hybrid cars of a spoilt few betrays a judgement about how the rest of society should live. And often, their case, though legitimate appears overstated: cheap short-hall flights are seen as disgusting, cheap imported meat is sick, over-boiling the kettle is genocide, and so on. Implicit in their entire effort is the wrong assumption that by changing consumer habits they have tackled climate change. Changing your light bulb is not changing the world – energy efficiency is essential but not enough.
However, the lambasting that the green movement receives from the likes of Brendan O’Neill in The Guardian and his magazine Spiked Online fails to offer any solutions to what is an accepted problem. These self-titled (and usually middle-class) libertarians moan that the entire issue is merely an elitist vehicle to meddle in the lives of ‘the masses’. Yet if this were a genuine ideological concern, they would do well to remember that liberty ends where the one person’s actions limit the freedom of another person’s actions. Unrestricted emissions from some will hinder the lives of many others. Failing to counter that argument these same critics then suggest that climate change is just an anti-progress conspiracy wrapped up in superstition. This sort of drivel fails to contend the science and ignores the fact that social and economic progress demands a stable climate. These so-called “defenders of the masses” end up protecting the interests of the wealthiest corporations instead. It’s difficult to think of many more patronising things then well-paid journalists claiming the voice of millions of working-class voices, especially when, as Green Party MEP Dr Caroline Lucas notes, “if you look at the impacts of climate change, it’s the poorest that are hit first and hardest.”
Until government takes action to draw in the whole of society – business included – the mass effort against climate change will forever be undermined by precious minorities on either side. Rather than relying on the good will of British Petroleum, or hoping that people will give up weekly flights to their holiday homes in Monaco, the government should stand up to the challenge and set an equal limit on how much carbon we can all emit.
Dr Lucas added “the science demands action. We are told we have between 8-10 years in which to put in place a rigorous policy framework to ensure serious emission reductions. It is as much a social justice issue as an environmental one.”
Through setting limits on national emissions, government can sanction one proportion for businesses and then divide the rest equally amongst citizens. Rather than attack the poor – as the much vouched-for carbon taxes do – this would progressively redistribute wealth. Those who expend less than their entitlement can sell off their excess to others who demand it. Remember that despite what they may think, the self-congratulating rich actually consume more carbon than the poor.
With similar incentives placed on businesses effective action would be demanded. It would no longer be profitable for a BP to emit a 100 million tonnes of carbon dioxide to produce crude oil from tar sands; instead they could employ part of their enormous annual profit to genuinely invest in sustainable alternatives.
That we should all be taking action to tackle climate change is unquestionable. But when in 1940 we were faced with a global threat to our livelihoods, the government wasn’t afraid to lead a mass campaign. Food rations were an immense sacrifice, but rather than having an elitist few telling the poor not to eat, everyone was in the same boat. The scale of this threat may not be entirely predictable as yet, but unless we move beyond are limp response, we may have to face the horror of finding out.
Tags: BP, Brendan O'Neill, Carbon ration, Caroline Lucas, class, climate change, Corporate power, economics, Green consumerism, Insight Magazine, Plane Stupid, politics, spiked online, Stern Report, tar-sands, The Guardian
The political frontline?
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I have recently had the dubious fortune of becoming a research assistant with an MEP in the European Parliament. As I was thrust into this new skin I was told that I was entering the ‘frontline of politics’.
It has been fascinating to lend my eyes a perspective I had never come across and in doing so I have tried to distill the essence of the political. It seems to me that the role of a government basically boils down passing a law, or not passing a law. All the familiar debates spiral out from this point.
In the last week the EU Parliament has agreed on a motion to improve energy efficiency by phasing out wasteful goods such as Patio Heaters. Whilst the frantic colluding, compromising and horse-trading was going on around the parliament it became apparent that the political frontline is far from such politicians. Ultimately politics is experienced in everyday life, it’s omnipresent and inescapable. When you sit outside a pub no longer experiencing the absurd comfort of heating up the outdoors, you are on the political frontline.
Power, as opposed to politics is more opaque. Politicians, elected solely by citizens appear in submission to a myriad of other influences. In the name of pragmatism ideals, values and morals are easily relinquished.
The battle to prevent run-away climate change, for example needs decisive political action (law making) but politicians seem unable to manage this. The minority who dismiss climate change as the new ‘millennium bug’ are thankfully giving way to reason, yet despite democratic demand for action politicians remain impotent. Instead unaccountable private groups, corporations and their lobbies appear to run the debate and corrupt democracy. With skilled lobbyists, lawyers and PR departments they create a yawning information asymmetry and stifle political action.
In terms of the media, Britain’s leading left-leaning weekly, The New Statesman, for example, obtains of much of its revenue from advertising companies such as BP and BAE systems. This compromises its ability to criticise both these companies and the wider social structure that allows information to be constrained by such companies. Information is perhaps key to an effective democracy yet it’s blatantly undermined in almost all aspects of the media.
If citizens can overcome this hurdle they face further barriers trying to negotiate the lobbyists of unaccountable interests groups. When debating over legislation or other political action, politicians will face a barrage of highly skilled, well versed people who represent the interests of a tiny minority. When these same interest groups also command the funding of political parties, what hope can the majority have of their voices being heard and getting the appropriate law being passed.
It is a crime to blockade the offices of BP but perfectly legal for BP to emitt 100 million tonnes of CO2 producing crude oil from tar sands.
It is the general public who experience politics but unaccountable minority who dictate it. In this situation where power resides is debatable. Perhaps if people realised that they are the ultimate politicians we could retrieve control over our public lives.
Tags: BP, climate change, democracy, economics, new statesman, politics, tar-sands
A corrupting agenda
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This week in Berlin the World Bank will shuffle around the EU meeting with an upturned palm asking for more funding from the EU countries. Britain, like a guilt-ridden Christmas shopper will dig deep and throw its wallet into the hands of the Bank. For those concerned with International Development, the government might just be throwing in the towel as well.
The department for International Development (DfID) is set to see a budget increase by 11% to £7.9 billion a year by 2010-11. Unfortunately whilst its budget has swelled its department has shrunk. In the name of efficiency, demanded by opposition parties DfID will have to outsource large amounts of its work and taxpayers money to unaccountable international institutions like the World Bank.
The Bank is the largest single development agency in the world and funds grants and loans for things such as health, education and infrastructure building in the developing world. Its influence however stretches well beyond mere finance. Despite being an undemocratic and unaccountable institution itself, the Bank plays a primary role in shaping the political and economic agenda in the developing world. A lot of this revolves, somewhat ironically, around its Anti-Corruption Agenda.
Corruption is central in the challenge of development. The horror stories of developing country government elites waltzing off to Swiss Banks with millions of pounds of aid money has made development and corruption inseparable in people’s minds. Corruption is a major problem, one that infects all powers throughout the world. The worry is the way in which the World Bank uses anti-corruption to demand that developing countries fit into the Banks ideology of ‘good’ governance.
The Bank defines corruption as ‘the abuse of private office for pubic gain’. Interestingly the role that private individuals and corporations play in corruption sees no mention. This betrays the Banks profound antagonism towards government. It believes that if given any chance to interfere with the ‘logic’ of the market, governments and bureaucracy will cordon off vast sums for themselves and their supporters. Their neoliberal belief that international market liberalisation with a minimal role of government is the only path to development, is inescapable.
Cynics would suggest that the Bank’s sudden focus on corruption and governance is to absolve itself of responsibility of its failures over the last fifty years. Perhaps if the Bank were really concerned about good governance it would spare a moment for introspection. Its president is selected solely by the US government, who are accountable more to its corporate paymasters than the US population. There is also a significant problem when the democratic right of a citizen in Zambia, for example, is trampled all over by World Bank policy. In the name of good governance and ‘fiscal discipline’ the Bank demanded that education and health no longer be paid out of general taxation. Instead unaccountable private companies and NGOs took over. Predictably life expectancy fell to 40 years old and infant mortality piled higher. This strikingly poor governance had nothing to do with Zambia or its citizens.
The rhetoric coming out of the Bank, and its anti-corruption agenda is one that presents development as merely a technical, economic problem. Get the prices right and the magic of the market takes care of everything. Whilst democratically regulated markets play an essential role in development the concern is that this sort of approach excludes considerations of power structures, class and ethnic divisions, historical trajectories and so on, all of which shape the successes of development.
British taxpayers, along with developing countries deserve better than having their policies taken out of their hands. International Development (or justice) is no distant, left-wing dream, there are clear policies that can help or hinder the process. It is a political process, not an economic one. Rather than letting further accountability slip from our hands we should demand DfID ignore the World Banks plea for more funding.
HIV and AIDS is not a health problem, it’s a social injustice.
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Against a dramatic backdrop of an AIDS ribbon constructed from 6000 red flowers -one for every person that dies each day from AIDS-related illnesses, Stop AIDS campaigners from all over the country joined to demand that the UK Government keeps its 2005 promise of Universal Access to Treatment for HIV and AIDS by 2010.
In the lead up to World AIDS Day on December 1st, campaigners were keen to remind both politicians and the wider public that HIV is no longer a death sentence. “Unlike the 80s there are now medicines that can keep people living active and fulfilling lives. The devastating insult is that 71% of people who urgently need these drugs have no access to them. It is both a moral and economic imperative that the UK government takes action” remarked Rafi Rogans-Watson, BSMS student and MEDSIN activist.
For doctors and healthcare workers around the world this is particularly frustrating. Instead of battling against the disease they have to tackle the barriers placed by western governments, the world trade organisation and pharmaceutical lobbies, if they want to treat their patients.
Currently the producers of ARVs, such as Abbott Laboratories, who recorded a staggering $1.7bln profit in 2006, are awarded a 20-year patent by the WTO TRIPs law for their invention. This law prevents any other company from selling generic ‘copies’ of the drugs and therefore grants the inventor the monopoly power of charging whatever they like. Whilst rewarding inventors is essential for further research the current situation embodies the global inequalities that fracture the world. These large companies – backed by western governments and protected by a trade law that these same governments and companies shaped, are walking away with massive profits whist millions of people in the majority world die needlessly.
Where competition is allowed drug prices plummet and treatment becomes possible. Last year UK activists were instrumental in the effort of the Thai government to provide HIV treatment for its people. Thailand faced huge political and economic pressure from both Abbott Laboratories and the US government to withdraw its move of importing generic ARV drugs. Thanks to UK activists educating Hillary Benn about the situation and demanding he intervene, he spoke out directly in support of Thailand. This multilateral pressure proved sufficient to force US to reteat from its absurd position and 8000 people gained free access the HIV and AIDS treatment that will keep them alive.
In order to achieve the promise of Universal Access by 2010 the UK government needs to announce bold and ambitious measures in its new AIDS strategy due to be launched in spring 2008. Alongside promoting access to affordable medicines, the UK needs to strengthen health systems in developing countries and provide £2.5bln over the next three years to finance Universal Access. Without this bold and necessary action, student campaigners fear that the promise will be broken. “Unless the rate of scale up increases dramatically, less than 5 million people will be on treatment by 2010: a far cry from treatment for all.” Katy Athersuch, Student Stop AIDS Campaign Coordinator.
Campaigners were pleased but remained cautious with the speech made by Douglas Alexander. Though he reiterated his support for the cause he failed to commit to the funding levels required by the UK and failed to mention anything about generic drugs, care or support services.
Throughout the campaign young people have been at the forefront of progress and once again they will need to keep the pressure on the UK government to ensure that millions will not die needlessly.
You can take action and support international healthcare by demanding you’re MP raises the issue with Douglas Alexander and signs the EDM 183.
Blacks, don’t expect any help on a Tuesday!
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THE TRUTH ABOUT BLACKS!
The other race explained by a black who knows!
“My mates tell me the reason I don’t have a black friend is because my bedroom is a bit on the messy side. Do blacks really make an issue out of that kind of thing?”
To be honest, I don’t know any black who’d be happy to be invited back to a filthy flat. Admittedly some blacks can be obsessive about cleanliness but if you really want to get lucky you’ll just have to live with that.
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The above passage, adjusted from last Friday’s Nuts Magazine shows how quickly ‘harmless fun’ disintegrates into something more sinister when placed in a different context. From the original copy the references made to ‘women’ were changed to ‘blacks’ and ‘men’ to ‘whites’. Whilst the analogy may not be perfect the prejudices it displays remain. Nuts may be a flaccid target for critics but with almost 6000 copies a week sold in the UK it demands attention.
‘Lad’s Mags’ often attract criticism for their objectification of people. Whether objectification need be dehumanising is an important debate. However, in this example I simply question whether the attitudes on display would be deemed unacceptable in a different context.
Like racism, you will never rid society of sexism. Thankfully in the last century much progress has been made on both fronts. The common defence of such publications and the attitudes portrayed is that they are simply what the market demands. Yet, in today’s age it would be unthinkable for companies to sell their goods through a racist card. Why should it be different when dealing with an equally ignorant prejudice?
Racism entails assigning behavioural and cultural traits to the different biological ethnicities. On the basis of these imaginary characteristics a racist concludes that one ethnic group is superior to another. The above article carried a similar process of behavioural assumptions about men and women.
The shocking statistics released last month by the British Crime Survey estimated 200,000 incidents of rape and sexual abuse, of which the police recorded only 12,000 and disgracefully only 5% ended in conviction. This means that of the 200,000 cases of rape committed only 600 men end up in prison.
Too often the pervasive notions of gender prescribed the media are divorced from the visible crimes they reveal themselves in. In no way does reading Nuts amount to raping women but the complacent attitude that brushes aside offensive writing as ‘harmless fun’ does seem to exhibit itself in these far uglier forms.
Last year Anna was savagely beaten up in Notting Hill late one evening. She called the police the morning after, only to be questioned about whether she’d been drinking and what she’d done to provoke this assault. The officer rounded off the call with the news that they were unlikely to catch the man who did this to her so there was little point in proceeding. Yet, in the same area, there is no shortage of yellow Metropolitan police incident boards seeking information when men are the victims of unprovoked violence. Rather than being an isolated incident the statistics suggest cases like this are indicative of the entire system.
Returning to race, if there were numerous magazines reducing and homogenising ethnic groups to imbeciles, accompanied by evidence of intrinsic racism in the police force, there would, quite rightly be public outrage. The two things would be discussed together and wider questions about our attitudes towards race would be raised.
The dominant ideas of both women and men that pervade are ignorant and offensive. The contest to the millennia of misogyny has only just begun. If progress is to be made we must challenge ourselves to make a stand and demand debate about these issues.
Tags: media, nuts magazine, lad's mags, feminism, racism, rape, women, men, sexism, police, gender, pornography
