While the financial mayhem continues to draw the headlines, the cost of persistent biodiversity loss has yet to be established. But it is believed to be bigger than that of the meltdown, and in many cases also irreparable.
The International Union for the Conservation of Nature (IUCN) now plans to gather incontrovertible evidence on the value of preserving biodiversity and the cost of losing it. The world's oldest and largest global environmental network will task its scientific commissions for this.
This is one eminent pillar of the immediate and strategic priorities of the IUCN as spelt out by the organisation's new president Ashok Khosla.
The idea, backed by IUCN's ten-day world conservation congress that concluded Tuesday (Oct 14) in Barcelona, is to protect the biosphere, with particular focus on the conservation of biodiversity in all its manifestations.
"This means that we must do what is necessary to bring the issue of biodiversity right into the centre stage of public awareness, media concern and decision-making at the local, national and global levels," Khosla told delegates at the closing session.
Discussions at the congress revealed that there are indeed definite lessons to learn from the debate about climate change. While many doubted the scientific basis of the connection between climate change and human activity, it was the authoritative and unambiguous view of the Inter-governmental Panel on Climate Change (IPCC) reflecting the combined scientific work of over 3,000 scientists that more or less put an end to the debate. Clearly, IUCN is the body that can and must do what IPCC is doing with climate change.
"The clear message coming out of this (Barcelona) meeting is that biodiversity underpins the well-being of human societies and their economies," said IUCN director-general Julia Marton-Lefèvre. "But conservation can only succeed if we attack the underlying causes of biodiversity loss, and action is taken at the same time to reduce the impacts of that loss."
The IUCN programme for 2009-2012 on 'Shaping a Sustainable Future' says the IUCN will contribute directly to targets agreed internationally by governments to reduce the rate of loss of biodiversity.
It will also add an environmental perspective to the achievement of the Millennium Development Goals (agreed in 2000 by 189 countries), the plan for implementation of the World Summit on Sustainable Development (agreed in September 2002 in Johannesburg) and other relevant international commitments.
Established in 1948 in Fontainebleau (Switzerland), three years after the United Nations was founded, the IUCN with about 1,000 members from across the world, including governments and international NGOs, is indeed poised to adjust itself to the changed and fast-changing realities of the globalised world.
Not only does it face the most challenging environmental issues ever in history -- climate change and diminishing biodiversity -- but IUCN members are also asking for fundamental changes in its working.
It is against this backdrop that the election of Khosla is of vital significance. He chairs the India-based Development Alternatives Group, a non-profit organisation established in 1983 "for creating large-scale sustainable livelihoods." He is also president of the Club of Rome, a global think-tank and centre of innovation and initiative.
One of his top priorities is to set up a world commission in collaboration with WWF and the UN Environment Programme (UNEP) to investigate the deeper implications of 'green carbon' such as sequestration, REED (a mechanism for compensating countries for reducing emissions from deforestation and forest degradation) and biofuels.
The proposed commission would, like the World Commission on Dams, bring together people from different walks of life and of different viewpoints who are in a position to look at where the action on climate change and on biodiversity can take place in the most meaningful way.
Another important point on IUCN's agenda in the coming years is to "form new partnerships among the best institutions to bring together their different insights and to generate meaningful solutions that deal effectively with the inter-related issues of population, natural resources, environment and development."
The IUCN will also bring clarity into the basis for establishing appropriate relationships with business. Judging from the debates on several motions on this subject at the Barcelona congress, there would appear to be a considerable consensus that the IUCN must engage with corporations, large, medium and small.
However, the terms of such engagement must be such as to lead to positive conservation outcomes, and ensure that at no time is IUCN's integrity or capacity to fulfil its mission compromised in any way.
Marton-Lefèvre confirmed that perception. "My view has always been that IUCN was set up to influence, encourage and assist society in dealing with nature and natural resources in a most sustainable and socially equitable manner -- and business is a part of society, whether some of our members like it or not. So my feeling is strongly that we must engage, but we don't lose our voice in this engagement," she told IPS.
But Khosla went a step ahead, when he said in his closing remarks: "The national and regional committees will have to be mandated to perform both expert and watchdog roles at the grassroot levels."
A task force to define the terms of such engagement and the changes in function required is expected to be set up by the 32-member council that serves as the board of directors of the organisation.
The congress did some important work to promote improvements in governance on the high seas. As an area outside of national jurisdiction, these are often exploited by all and managed by none.
The rights of vulnerable and indigenous communities received high priority at the Barcelona congress as IUCN members called on governments to take into account human rights implications in all conservation-related activities.
The congress saw the beginning of an ethical framework to guide conservation activities where poverty reduction, rights-based approaches and 'do no harm' principles can be applied to help redefine relating with nature.
With an eye on the UN climate change conference in Poland in December, the IUCN called for more specific goals in line with the Bali Plan of Action -- calling for a 50 to 85 percent reduction in CO2 emissions by 2050 and keeping a rise in temperature below 2 degrees Centigrade.
Several high profile commitments were made during the congress to support the IUCN mission: the MacArthur Foundation will invest 50 million dollars in climate change mitigation and adaptation, and the Mohammed Bin Zayed Species Conservation Fund will invest 25 million euros for worldwide biodiversity.
© 2008 Inter Press Service
torsdag den 16. oktober 2008
Grøn økonomi kan skabe millioner af job
FN præsenterer sit udspil til 'A New Green Deal' i næste uge
På onsdag i næste uge præsenterer FN's Miljøprogram, UNEP, med støtte fra den tyske og norske regering samt EU-Kommissionen en ambitiøs appel til verdens politiske ledere om at skifte kurs og arbejde for en New Green Deal, der kan afværge miljømæssige katastrofer og samtidig skabe nye arbejdspladser i stort tal, trænge fattigdommen tilbage og hjælpe den syge internationale økonomi på fode.
Appellen præsenteres i London ved fremlæggelsen af The Green Economy Initiative, der henter inspiration fra præsident Roosevelts New Deal-initiativ i 1930'ernes USA.
UNEP påpeger det uholdbare i den eksisterende globale økonomi, der er fordoblet gennem det seneste århundrede, men samtidig bærer ansvar for, at 60 pct. af de naturressourcer, der sikrer grundlaget for mad, drikkevand, energi og ren luft er blevet alvorligt undergravet.
På den baggrund vil UNEP appellere til de globale ledere om at sikre en omdirigering af økonomiske ressourcer bort fra den finansspekulation, der har drevet finansmarkedet til randen af nedsmeltning, og hen mod investeringer i bæredygtig jobskabelse og ny vækst.
Bag initiativet ligger rapporten The Economics of Ecosystem and Biodiversity, udarbejdet af formanden for Deutsche Banks Global Market Centre, Pavan Sukhdev.
"Vi forsøger at navigere i ukendte og turbulente farvande med et gammelt og defekt økonomisk kompas, og det påvirker vores evne til at forme en bæredygtig økonomi i harmoni med naturen," siger den tyske bankøkonom.
Hans pointe er, at dagens økonomi stort set mangler redskaber til at værdisætte de goder, planeten tilbyder i form af økosystemerne og naturens tjenesteydelser. Derfor håndteres de som gratis goder, og derfor overforbruges, udpines og ødelægges de. Ifølge Sukhdevs analyser betyder f.eks. rydningen af skove, at verden p.t. mister - hidtil ikke værdisatte - tjenester og goder på 2.500 milliarder dollar årligt, sammenligneligt med de ca. 3.000 mia., der er gået til verdens kriseramte finanssektor.
En grøn økonomi, der tilskriver naturen dens reelle værdi for menneskeheden, vil lede til anderledes økonomiske dispositioner, der sikrer denne naturkapitals opretholdelse og dermed fastholder grundlaget for varig og bæredygtig anvendelse og jobskabelse, påpeger Sukhdev.
"Før har det været muligt at fare kloden rundt og udnytte den som en mine, hvorfra vi hentede reserverne. Det er tydeligt, at det ikke går længere. Hvor det 20. århundrede var industriens tidsalder, må det 21. århundrede blive biologiens tidsalder, hvor vi omdefinerer, hvad velstand og økonomi betyder," siger UNEP-talsmand Nick Nuttall.
Millioner af jobs
I en anden rapport, udarbejdet for bl.a. UNEP og FN's arbejdstagerorganisation ILO, dokumenteres beskæftigelseseffekten ved at styre de globale investeringer i bæredygtig retning.
"Ændrede mønstre for ansættelser og investeringer som resultat af en indsats for at bremse klimaændringerne og disses effekter skaber allerede nye arbejdspladser i mange sektorer og økonomier og kan skabe millioner flere i både i- og u-lande," hedder det i rapporten Green Jobs: Towards decent work in a sustainable low-carbon world.
"Vedvarende energi skaber flere jobs end beskæftigelse i den fossile energisektor. Projekterede investeringer på 630 mia. dollar i 2030 vil føre til mindst 20 mio. nye job i den vedvarende energisektor (...) En global omstilling til energieffektive bygninger kan skabe millioner af arbejdspladser og samtidig gøre eksisterende jobs grønnere for mange af de 111 mio. mennesker, der allerede arbejder i byggesektoren," konkluderer rapporten.
Source URL: http://www.information.dk/168858
På onsdag i næste uge præsenterer FN's Miljøprogram, UNEP, med støtte fra den tyske og norske regering samt EU-Kommissionen en ambitiøs appel til verdens politiske ledere om at skifte kurs og arbejde for en New Green Deal, der kan afværge miljømæssige katastrofer og samtidig skabe nye arbejdspladser i stort tal, trænge fattigdommen tilbage og hjælpe den syge internationale økonomi på fode.
Appellen præsenteres i London ved fremlæggelsen af The Green Economy Initiative, der henter inspiration fra præsident Roosevelts New Deal-initiativ i 1930'ernes USA.
UNEP påpeger det uholdbare i den eksisterende globale økonomi, der er fordoblet gennem det seneste århundrede, men samtidig bærer ansvar for, at 60 pct. af de naturressourcer, der sikrer grundlaget for mad, drikkevand, energi og ren luft er blevet alvorligt undergravet.
På den baggrund vil UNEP appellere til de globale ledere om at sikre en omdirigering af økonomiske ressourcer bort fra den finansspekulation, der har drevet finansmarkedet til randen af nedsmeltning, og hen mod investeringer i bæredygtig jobskabelse og ny vækst.
Bag initiativet ligger rapporten The Economics of Ecosystem and Biodiversity, udarbejdet af formanden for Deutsche Banks Global Market Centre, Pavan Sukhdev.
"Vi forsøger at navigere i ukendte og turbulente farvande med et gammelt og defekt økonomisk kompas, og det påvirker vores evne til at forme en bæredygtig økonomi i harmoni med naturen," siger den tyske bankøkonom.
Hans pointe er, at dagens økonomi stort set mangler redskaber til at værdisætte de goder, planeten tilbyder i form af økosystemerne og naturens tjenesteydelser. Derfor håndteres de som gratis goder, og derfor overforbruges, udpines og ødelægges de. Ifølge Sukhdevs analyser betyder f.eks. rydningen af skove, at verden p.t. mister - hidtil ikke værdisatte - tjenester og goder på 2.500 milliarder dollar årligt, sammenligneligt med de ca. 3.000 mia., der er gået til verdens kriseramte finanssektor.
En grøn økonomi, der tilskriver naturen dens reelle værdi for menneskeheden, vil lede til anderledes økonomiske dispositioner, der sikrer denne naturkapitals opretholdelse og dermed fastholder grundlaget for varig og bæredygtig anvendelse og jobskabelse, påpeger Sukhdev.
"Før har det været muligt at fare kloden rundt og udnytte den som en mine, hvorfra vi hentede reserverne. Det er tydeligt, at det ikke går længere. Hvor det 20. århundrede var industriens tidsalder, må det 21. århundrede blive biologiens tidsalder, hvor vi omdefinerer, hvad velstand og økonomi betyder," siger UNEP-talsmand Nick Nuttall.
Millioner af jobs
I en anden rapport, udarbejdet for bl.a. UNEP og FN's arbejdstagerorganisation ILO, dokumenteres beskæftigelseseffekten ved at styre de globale investeringer i bæredygtig retning.
"Ændrede mønstre for ansættelser og investeringer som resultat af en indsats for at bremse klimaændringerne og disses effekter skaber allerede nye arbejdspladser i mange sektorer og økonomier og kan skabe millioner flere i både i- og u-lande," hedder det i rapporten Green Jobs: Towards decent work in a sustainable low-carbon world.
"Vedvarende energi skaber flere jobs end beskæftigelse i den fossile energisektor. Projekterede investeringer på 630 mia. dollar i 2030 vil føre til mindst 20 mio. nye job i den vedvarende energisektor (...) En global omstilling til energieffektive bygninger kan skabe millioner af arbejdspladser og samtidig gøre eksisterende jobs grønnere for mange af de 111 mio. mennesker, der allerede arbejder i byggesektoren," konkluderer rapporten.
Source URL: http://www.information.dk/168858
ATTAC: Let's shut down the financial casino
ATTAC udfolder i denne pdf. fil deres tanker om finanskrisens årsag og medicinen md od den.
http://blog.tni.org/wp-content/uploads/2008/10/attac-finance-crisis-15_10_2008.pdf
http://blog.tni.org/wp-content/uploads/2008/10/attac-finance-crisis-15_10_2008.pdf
The Depression: A Long-Term View
Immanuel Wallerstein says that the belief that we are just in another cyclical swing and will soon bounce back hides the fact that three basic costs of capitalist production - personnel, inputs, and taxation - have steadily risen as a percentage of possible sales price, which makes it impossible to obtain the large profits from quasi-monopolized production that have always been the basis of significant capital accumulation.
“We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it..This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.”
The depression has started. Journalists are still coyly enquiring of economists whether or not we may be entering a mere recession. Don’t believe it for a minute. We are already at the beginning of a full-blown
worldwide depression with extensive unemployment almost everywhere. It may take the form of a classic nominal deflation, with all its negative consequences for ordinary people. Or it might take the form, a bit less likely, of a runaway inflation, which is simply another way in which values deflate, and which is even worse for ordinary people.
Of course everyone is asking what has triggered this depression. Is it the derivatives, which Warren Buffett called “financial weapons of mass destruction”? Or is it the subprime mortgages? Or is it oil speculators?
This is a blame game, and of no real importance. This is to concentrate on the dust, as Fernand Braudel called it, of short-term events. If we want to understand what is going on, we need to look at two other
temporalities, which are far more revealing. One is that of medium-term cyclical swings. And one is that of the long-term structural trends.The capitalist world-economy has had, for several hundred years at least, two major forms of cyclical swings. One is the so-called Kondratieff cycles that historically were 50-60 years in length. And the other is the hegemonic cycles which are much longer.
In terms of the hegemonic cycles, the United States was a rising contender for hegemony as of 1873, achieved full hegemonic dominance in 1945, and has been slowly declining since the 1970s. George W. Bush’s follies have transformed a slow decline into a precipitate one. And as of now, we are past any semblance of U.S. hegemony. We have entered, as normally happens, a multipolar world. The United States remains a strong power, perhaps still the strongest, but it will continue to decline relative to other powers in the decades to come. There is not much that anyone can do to change this.
The Kondratieff cycles have a different timing. The world came out of the last Kondratieff B-phase in 1945, and then had the strongest A-phase upturn in the history of the modern world-system. It reached its height
circa 1967-73, and started on its downturn. This B-phase has gone on much longer than previous B-phases and we are still in it.
The characteristics of a Kondratieff B-phase are well-known and match what the world-economy has been experiencing since the 1970s. Profit rates from productive activities go down, especially in those types of
production that have been most profitable. Consequently, capitalists who wish to make really high levels of profit turn to the financial arena, engaging in what is basically speculation. Productive activities, in order not to become too unprofitable, tend to move from core zones to other parts of the world-system, trading lower transactions costs for lower personnel costs. This is why jobs have been disappearing from Detroit, Essen, and Nagoya and factories have been expanding in China, India, and Brazil.
As for the speculative bubbles, some people always make a lot of money in them. But speculative bubbles always burst, sooner or later. If one asks why this Kondratieff B-phase has lasted so long, it is because the
powers that be - the U.S. Treasury and Federal Reserve Bank, the International Monetary Fund, and their collaborators in western Europe and Japan - have intervened in the market regularly and importantly - 1987 (stock market plunge), 1989 (savings-and-loan collapse), 1997 (East Asian financial fall), 1998 (Long Term Capital Management mismanagement), 2001-2002 (Enron) - to shore up the world-economy.
They learned the lessons of previous Kondratieff B-phases, and the powers that be thought they could beat the system. But there are intrinsic limits to doing this. And we have now reached them, as Henry Paulson and
Ben Bernanke are learning to their chagrin and probably amazement. This time, it will not be so easy, probably impossible, to avert the worst.
In the past, once a depression wreaked its havoc, the world-economy picked up again, on the basis of innovations that could be quasi-monopolized for a while. So, when people say that the stock market
will rise again, this is what they are thinking will happen, this time as in the past, after all the damage has been done to the world’s populations. And maybe it will, in a few years or so.
There is however something new that may interfere with this nice cyclical pattern that has sustained the capitalist system for some 500 years. The structural trends may interfere with the cyclical patterns. The basic structural features of capitalism as a world-system operate by certain rules that can be drawn on a chart as a moving upward equilibrium. The problem, as with all structural equilibria of all systems, is that over time the curves tend to move far from equilibrium and it becomes impossible to bring them back to equilibrium.
What has made the system move so far from equilibrium? In very brief, it is because over 500 years the three basic costs of capitalist production - personnel, inputs, and taxation - have steadily risen as a percentage
of possible sales price, such that today they make it impossible to obtain the large profits from quasi-monopolized production that have been the basis of significant capital accumulation.
It is not because capitalism is failing at what it does best. It is precisely because it has been doing it so well that it has finally undermined the basis of future accumulation.
What happens when we reach such a point is that the system bifurcates (in the language of complexity studies). The immediate consequence is high chaotic turbulence, which our world-system is experiencing at the moment and will continue to experience for perhaps another 20-50 years. As everyone pushes in whatever direction they think immediately best for each of them, a new order will emerge out of the chaos along one of two alternate and very different paths.
We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it, because it will be the result of an infinity of individual pressures. But sooner or later, a new system will be installed. This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.
As for our immediate short-run ad interim prospects, it is clear what is happening everywhere. We have been moving into a protectionist world (forget about so-called globalization). We have been moving into a much
larger direct role of government in production. Even the United States and Great Britain are partially nationalizing the banks and the dying big industries. We are moving into populist government-led redistribution, which can take left-of-center social-democratic forms or far right authoritarian forms. And we are moving into acute social conflict within states, as everyone competes over the smaller pie. In the short-run, it is not, by and large, a pretty picture.
by Immanuel Wallerstein
“We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it..This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.”
The depression has started. Journalists are still coyly enquiring of economists whether or not we may be entering a mere recession. Don’t believe it for a minute. We are already at the beginning of a full-blown
worldwide depression with extensive unemployment almost everywhere. It may take the form of a classic nominal deflation, with all its negative consequences for ordinary people. Or it might take the form, a bit less likely, of a runaway inflation, which is simply another way in which values deflate, and which is even worse for ordinary people.
Of course everyone is asking what has triggered this depression. Is it the derivatives, which Warren Buffett called “financial weapons of mass destruction”? Or is it the subprime mortgages? Or is it oil speculators?
This is a blame game, and of no real importance. This is to concentrate on the dust, as Fernand Braudel called it, of short-term events. If we want to understand what is going on, we need to look at two other
temporalities, which are far more revealing. One is that of medium-term cyclical swings. And one is that of the long-term structural trends.The capitalist world-economy has had, for several hundred years at least, two major forms of cyclical swings. One is the so-called Kondratieff cycles that historically were 50-60 years in length. And the other is the hegemonic cycles which are much longer.
In terms of the hegemonic cycles, the United States was a rising contender for hegemony as of 1873, achieved full hegemonic dominance in 1945, and has been slowly declining since the 1970s. George W. Bush’s follies have transformed a slow decline into a precipitate one. And as of now, we are past any semblance of U.S. hegemony. We have entered, as normally happens, a multipolar world. The United States remains a strong power, perhaps still the strongest, but it will continue to decline relative to other powers in the decades to come. There is not much that anyone can do to change this.
The Kondratieff cycles have a different timing. The world came out of the last Kondratieff B-phase in 1945, and then had the strongest A-phase upturn in the history of the modern world-system. It reached its height
circa 1967-73, and started on its downturn. This B-phase has gone on much longer than previous B-phases and we are still in it.
The characteristics of a Kondratieff B-phase are well-known and match what the world-economy has been experiencing since the 1970s. Profit rates from productive activities go down, especially in those types of
production that have been most profitable. Consequently, capitalists who wish to make really high levels of profit turn to the financial arena, engaging in what is basically speculation. Productive activities, in order not to become too unprofitable, tend to move from core zones to other parts of the world-system, trading lower transactions costs for lower personnel costs. This is why jobs have been disappearing from Detroit, Essen, and Nagoya and factories have been expanding in China, India, and Brazil.
As for the speculative bubbles, some people always make a lot of money in them. But speculative bubbles always burst, sooner or later. If one asks why this Kondratieff B-phase has lasted so long, it is because the
powers that be - the U.S. Treasury and Federal Reserve Bank, the International Monetary Fund, and their collaborators in western Europe and Japan - have intervened in the market regularly and importantly - 1987 (stock market plunge), 1989 (savings-and-loan collapse), 1997 (East Asian financial fall), 1998 (Long Term Capital Management mismanagement), 2001-2002 (Enron) - to shore up the world-economy.
They learned the lessons of previous Kondratieff B-phases, and the powers that be thought they could beat the system. But there are intrinsic limits to doing this. And we have now reached them, as Henry Paulson and
Ben Bernanke are learning to their chagrin and probably amazement. This time, it will not be so easy, probably impossible, to avert the worst.
In the past, once a depression wreaked its havoc, the world-economy picked up again, on the basis of innovations that could be quasi-monopolized for a while. So, when people say that the stock market
will rise again, this is what they are thinking will happen, this time as in the past, after all the damage has been done to the world’s populations. And maybe it will, in a few years or so.
There is however something new that may interfere with this nice cyclical pattern that has sustained the capitalist system for some 500 years. The structural trends may interfere with the cyclical patterns. The basic structural features of capitalism as a world-system operate by certain rules that can be drawn on a chart as a moving upward equilibrium. The problem, as with all structural equilibria of all systems, is that over time the curves tend to move far from equilibrium and it becomes impossible to bring them back to equilibrium.
What has made the system move so far from equilibrium? In very brief, it is because over 500 years the three basic costs of capitalist production - personnel, inputs, and taxation - have steadily risen as a percentage
of possible sales price, such that today they make it impossible to obtain the large profits from quasi-monopolized production that have been the basis of significant capital accumulation.
It is not because capitalism is failing at what it does best. It is precisely because it has been doing it so well that it has finally undermined the basis of future accumulation.
What happens when we reach such a point is that the system bifurcates (in the language of complexity studies). The immediate consequence is high chaotic turbulence, which our world-system is experiencing at the moment and will continue to experience for perhaps another 20-50 years. As everyone pushes in whatever direction they think immediately best for each of them, a new order will emerge out of the chaos along one of two alternate and very different paths.
We can assert with confidence that the present system cannot survive. What we cannot predict is which new order will be chosen to replace it, because it will be the result of an infinity of individual pressures. But sooner or later, a new system will be installed. This will not be a capitalist system but it may be far worse (even more polarizing and hierarchical) or much better (relatively democratic and relatively egalitarian) than such a system. The choice of a new system is the major worldwide political struggle of our times.
As for our immediate short-run ad interim prospects, it is clear what is happening everywhere. We have been moving into a protectionist world (forget about so-called globalization). We have been moving into a much
larger direct role of government in production. Even the United States and Great Britain are partially nationalizing the banks and the dying big industries. We are moving into populist government-led redistribution, which can take left-of-center social-democratic forms or far right authoritarian forms. And we are moving into acute social conflict within states, as everyone competes over the smaller pie. In the short-run, it is not, by and large, a pretty picture.
by Immanuel Wallerstein
When old dogmas die, there is room for all kinds of radical new thinking
The revival of the markets has postponed the sensation that violent revolution is imminent. No longer are the sages telling us the entire system is minutes away from total collapse. The first aid, devised by Gordon Brown and hailed and emulated from the US to the eurozone, seems to have soothed the fevered brow of the moneymen. For now at least.
Still, even if the mob is not about to storm finance ministries from Paris to Washington, few doubt that we are witnessing an epochal event, living through one of those moments on which history pivots. Newsweek International editor Fareed Zakaria writes that he had always wanted to experience the kind of event "one reads about in books. Well, this is it". In the Financial Times, Philip Stephens says that two centuries of US and European domination are now at an end, as the western economic model is humbled. Robert Peston announces the end of the Thatcherite age. On these pages yesterday Steve Bell consigned the lady herself to the dustbin of history.
Of course, these verdicts might turn out to be overblown. Some are counselling that the great turmoil of 2008 will turn out to be less tempestuous than advertised. For one thing, the Brownian notion of part-nationalising the banks could work, turning what would have been a major depression into a mere, if harsh, recession. In that case, the political impact would surely be muted. The ground was laid for Franklin Roosevelt's New Deal not simply by the Wall Street Crash of 1929, but the lines of the destitute queueing for a bowl of soup. In this view, a convulsion to the financial system will not, by itself, be enough to usher in a new political era; not unless the tremors shake the real-world economy and society along with it.
Still, let's accept that the events of the past few week are indeed epochal. Most are quite clear on what has ended: the era of let-it-rip, unfettered market capitalism has surely drawn to a close. As Andrew Simms, policy director of the New Economics Foundation, puts it: "This is to finance-driven capitalism what 1989 was to Soviet communism." In both cases, too much unaccountable power had concentrated in too few hands, with too little transparency, as those in charge lived in a financial fantasy land, playing with numbers wholly detached from productive economic activity.
If that's now all over, what's coming next? The first shift might be a radically different approach to public spending. Now that they have seen their governments spend eye-popping sums of money to get out of a crisis, won't voters demand similar largesse to solve other pressing problems? For decades, politicians have told constituents that there simply isn't the cash to pay for, say, the £3bn that would be needed to halve child poverty by 2010, or the annual £8bn it would take to get 20% of our energy from renewable sources. Now, though, those look like paltry sums next to the £37bn the government plans to inject into Britain's ailing banks. Saving post office branches in deprived areas at a cost of £150m? Small change! In this way, the rhetoric of public discussion on spending could change drastically, with voters' patience for arguments of prudence evaporated. "If you could find the money to clear up the mess left by a few greedy fat cats," voters will say, "then you can find the money to fund this bus service/save this village school/renationalise the railways."
Or it could go the other way. The politicians may find that, though the public mood becomes more conducive to active, high-spending government, they simply lack the means to pay for any of it. They will have already borrowed to the hilt for the banks bail-out and will have nothing left, resources further depleted by the coming recession. In this atmosphere of fiscal tightness, ministers could skirt round vexed ideological terrain and simply plead poverty. There would be no need for an embarrassing U-turn on, say, the principle of ID cards: Jacqui Smith could say she still thinks they are a good idea but, at an estimated £6bn or more, we simply cannot afford them. Ditto Trident renewal: Brown could insist he maintains his faith in nukes but say that at, £20bn, revamped weaponry is a luxury Britain cannot afford.
Elsewhere, the public failure of unregulated free markets has been so visible it could lead to a demand that financial institutions now operate by criteria other than the narrow, selfish measure of their own bottom line, taking into account the wider needs of society as a whole. If that sounds like woolly, hopelessly utopian thinking, consider this. RBS is set to be majority-owned by you and me, the taxpayer. HBOS is not far off. Now what will those banks do when faced with people falling behind on their mortgage payments? In the past they would have ordered repossession, which made sense in terms of pure profit and loss. But now there will be other factors to consider, because these banks will no longer work solely for dividend-hungry shareholders but for the taxpayer. Every family that has endured a repossession costs the public purse, through rehousing, most obviously, but in myriad and less visible ways - right down to the burden that falls on the NHS as it repairs the mental and emotional damage inflicted by forced eviction.
Now since RBS's imminent owners - us - have to pay those bills as well, we will surely demand that the bank slow down rather than move in for the kill, perhaps through restructuring the debt of that struggling homeowner or at least running a "full-impact assessment" of repossession. The government already promises to impose demands on the banks they part-own, including gentler treatment of small businesses. But once taxpayers realise their new-found power, there is no reason to assume it will be confined to just those areas. We could insist the banks we partly own behave in an entirely new way.
No less clear a lesson of 2008 is that we have to live much more closely within our means. That must apply to individuals, reining in the credit- card habits of the past decade, and to governments who have perpetuated what Zakaria calls "a great fraud", spending ever more without raising taxes. The result in the US is a national debt of $10.2 trillion.
That act of denial has to end now. It will mean either cutting back on spending or increasing taxes, or both. But that needn't be as gloomy as it sounds. Revenues could rise by taxing those things we want to see the back of anyway: starting with a windfall tax on the energy companies, penalising them for their reliance on fossil fuels. As for spending, we could shed the waste - ID cards and Trident renewal - and spend what we have on a massive effort to green our society, from home to factory. That would obey classic New Deal logic, providing jobs, helping those in fuel poverty, tackling climate change and keeping the economy ticking over - all at the same time.
Simms at the NEF thinks we may end up going further, moving to shorter working weeks as people accept that they will earn less and consume less - but will have more time for family, friends and life. That seems like a radical fantasy now, but who knows? For when old dogmas die, there is room for all kinds of new thinking. The financial tsunami has given us this if nothing else - a chance to start again.
freedland@guardian.co.uk
Still, even if the mob is not about to storm finance ministries from Paris to Washington, few doubt that we are witnessing an epochal event, living through one of those moments on which history pivots. Newsweek International editor Fareed Zakaria writes that he had always wanted to experience the kind of event "one reads about in books. Well, this is it". In the Financial Times, Philip Stephens says that two centuries of US and European domination are now at an end, as the western economic model is humbled. Robert Peston announces the end of the Thatcherite age. On these pages yesterday Steve Bell consigned the lady herself to the dustbin of history.
Of course, these verdicts might turn out to be overblown. Some are counselling that the great turmoil of 2008 will turn out to be less tempestuous than advertised. For one thing, the Brownian notion of part-nationalising the banks could work, turning what would have been a major depression into a mere, if harsh, recession. In that case, the political impact would surely be muted. The ground was laid for Franklin Roosevelt's New Deal not simply by the Wall Street Crash of 1929, but the lines of the destitute queueing for a bowl of soup. In this view, a convulsion to the financial system will not, by itself, be enough to usher in a new political era; not unless the tremors shake the real-world economy and society along with it.
Still, let's accept that the events of the past few week are indeed epochal. Most are quite clear on what has ended: the era of let-it-rip, unfettered market capitalism has surely drawn to a close. As Andrew Simms, policy director of the New Economics Foundation, puts it: "This is to finance-driven capitalism what 1989 was to Soviet communism." In both cases, too much unaccountable power had concentrated in too few hands, with too little transparency, as those in charge lived in a financial fantasy land, playing with numbers wholly detached from productive economic activity.
If that's now all over, what's coming next? The first shift might be a radically different approach to public spending. Now that they have seen their governments spend eye-popping sums of money to get out of a crisis, won't voters demand similar largesse to solve other pressing problems? For decades, politicians have told constituents that there simply isn't the cash to pay for, say, the £3bn that would be needed to halve child poverty by 2010, or the annual £8bn it would take to get 20% of our energy from renewable sources. Now, though, those look like paltry sums next to the £37bn the government plans to inject into Britain's ailing banks. Saving post office branches in deprived areas at a cost of £150m? Small change! In this way, the rhetoric of public discussion on spending could change drastically, with voters' patience for arguments of prudence evaporated. "If you could find the money to clear up the mess left by a few greedy fat cats," voters will say, "then you can find the money to fund this bus service/save this village school/renationalise the railways."
Or it could go the other way. The politicians may find that, though the public mood becomes more conducive to active, high-spending government, they simply lack the means to pay for any of it. They will have already borrowed to the hilt for the banks bail-out and will have nothing left, resources further depleted by the coming recession. In this atmosphere of fiscal tightness, ministers could skirt round vexed ideological terrain and simply plead poverty. There would be no need for an embarrassing U-turn on, say, the principle of ID cards: Jacqui Smith could say she still thinks they are a good idea but, at an estimated £6bn or more, we simply cannot afford them. Ditto Trident renewal: Brown could insist he maintains his faith in nukes but say that at, £20bn, revamped weaponry is a luxury Britain cannot afford.
Elsewhere, the public failure of unregulated free markets has been so visible it could lead to a demand that financial institutions now operate by criteria other than the narrow, selfish measure of their own bottom line, taking into account the wider needs of society as a whole. If that sounds like woolly, hopelessly utopian thinking, consider this. RBS is set to be majority-owned by you and me, the taxpayer. HBOS is not far off. Now what will those banks do when faced with people falling behind on their mortgage payments? In the past they would have ordered repossession, which made sense in terms of pure profit and loss. But now there will be other factors to consider, because these banks will no longer work solely for dividend-hungry shareholders but for the taxpayer. Every family that has endured a repossession costs the public purse, through rehousing, most obviously, but in myriad and less visible ways - right down to the burden that falls on the NHS as it repairs the mental and emotional damage inflicted by forced eviction.
Now since RBS's imminent owners - us - have to pay those bills as well, we will surely demand that the bank slow down rather than move in for the kill, perhaps through restructuring the debt of that struggling homeowner or at least running a "full-impact assessment" of repossession. The government already promises to impose demands on the banks they part-own, including gentler treatment of small businesses. But once taxpayers realise their new-found power, there is no reason to assume it will be confined to just those areas. We could insist the banks we partly own behave in an entirely new way.
No less clear a lesson of 2008 is that we have to live much more closely within our means. That must apply to individuals, reining in the credit- card habits of the past decade, and to governments who have perpetuated what Zakaria calls "a great fraud", spending ever more without raising taxes. The result in the US is a national debt of $10.2 trillion.
That act of denial has to end now. It will mean either cutting back on spending or increasing taxes, or both. But that needn't be as gloomy as it sounds. Revenues could rise by taxing those things we want to see the back of anyway: starting with a windfall tax on the energy companies, penalising them for their reliance on fossil fuels. As for spending, we could shed the waste - ID cards and Trident renewal - and spend what we have on a massive effort to green our society, from home to factory. That would obey classic New Deal logic, providing jobs, helping those in fuel poverty, tackling climate change and keeping the economy ticking over - all at the same time.
Simms at the NEF thinks we may end up going further, moving to shorter working weeks as people accept that they will earn less and consume less - but will have more time for family, friends and life. That seems like a radical fantasy now, but who knows? For when old dogmas die, there is room for all kinds of new thinking. The financial tsunami has given us this if nothing else - a chance to start again.
freedland@guardian.co.uk
Citat: Erwin Neutzsky-Wulff
Fascisme er vel i bredeste forstand at ignorere det menneskelige. Vi tror at kunne frelse verden med vores snusfornuft og glemmer, at vi er biologiske væsner, at det i sidste ende er det, der styrer os og udgør de behov, vi søger opfyldt. Målet er altså for så vidt altid irrationelt, og derfor kan det somme tider være et problem, hvis midlerne bliver alt for rationelle.
Værre er det, at vi ikke blot skyer næstens menneskelighed forstået som en svaghed, vi dømmer ham efter paroler i stedet for menneskelige egenskaber. Forståelsen mellem politiske modpoler opstår først, når vi indser, at de udspringer af en fælles menneskelighed, kærlighed, vrede, angst.
Somme tider er vi mere bange for vore allierede end vore fjender, for at de skal falde os i ryggen, fordi de måske alligevel ikke vil helt det samme, og det får os til at insistere på en åndsforladt ortodoksi. En væsentlig grund til nazisternes sejr i trediverne var således, at socialdemokrater og kommunister bekæmpede hinanden i jagten på den rene lære.
Mens man skændtes om, hvilken strategi man skulle lægge, marcherede de ind, som ikke var i tvivl. I sidste ende bliver det så ikke fornuften, men småligheden, der sejrer, forfængeligheden og hævnlysten.
Så længe venstrefløjen er en kaffeklub, hvor det udelukkende drejer sig om at komme til mikrofonen, hvad enten man har noget at sige og evner for at sige det eller ej, vil højrefløjen altid kunne holde sig flydende ved at appellere til den demokratiske egoisme. Tænk blot på, hvordan det eneste reelle initiativ i en halv snes år druknede i forstadskællingeagtigt intrigemageri, og mennesker, hvis formålsparagraf havde været at sige sandheden, nåede at indvikle sig i bevidste løgne og overlagt tilsvining af deres inspirationskilde, inden de døde af skam. Måske er der sandhed i det gamle ord, at menneskene fortjener deres herrer ...
Iraqi Government Fuels 'War for Oil' Theories by Putting Reserves up for Biggest Ever Sale
LONDON - The biggest ever sale of oil assets will take place today, when the Iraqi government puts 40bn barrels of recoverable reserves up for offer in London.
BP, Shell and ExxonMobil are all expected to attend a meeting at the Park Lane Hotel in Mayfair with the Iraqi oil minister, Hussein al-Shahristani.
Access is being given to eight fields, representing about 40% of the Middle Eastern nation's reserves, at a time when the country remains under occupation by US and British forces.
Two smaller agreements have already been signed with Shell and the China National Petroleum Corporation, but today's sale will ignite arguments over whether the overthrow of Saddam Hussein was a "war for oil" that is now to be consummated by western multinationals seizing control of strategic Iraqi reserves.
Al-Shahristani is expected to reveal some kind of "risk service agreements" that could run for up to 20 years, with formal offers to be submitted by next spring and agreements signed in the summer.
Gregg Muttitt, from the UK-based social and ecological justice group Platform, says he is alarmed that the government is pushing ahead with its plans without the support of many in Iraq.
"Most of the terms of what is being offered have not been disclosed. There are security, political and reputational risks here for oil companies but none of them will want to see one of their competitors gain an advantage," he said.
Heinrich Matthee, a senior Middle East analyst at the specialist risk consultant Control Risks Group, also believes there are many pitfalls for those considering whether to make an offer.
"Currently it is unclear which party in Iraq is authorised to award a contract and at the same time to deliver its side of the bargain," he said. "Any contract with an independent oil company will be subjected to opposition and possible revision after pressure by resource nationalists."
Oil companies will find their reputations at risk from the actions of their Iraqi counterparties, such as joint venture partners, suppliers and agents. They will also have to contend with oil smuggling and the possibility that the ruling alliance could collapse, Matthee said.
He said that if the conspiracy theory that western oil companies egged on US and British governments to invade Iraq were true, the plan could backfire on them and benefit rivals in Asia instead. "It is possible the American army has provided the economic stability that will encourage Malaysian, Chinese and other Asian companies to become involved," he said.
There is no precedent for proven oil reserves of this magnitude being offered up for sale, said Muttitt. "The nearest thing would be the post-Soviet sale of the Kashagan field [in the Caspian Sea], which had 7bn or 8bn barrels."
China's state-owned oil group, CNPC, has already agreed a $3bn (£1.78bn) oil services contract with the government of Iraq to pump oil from the Ahdab oil field.
The deal is the first major oil contract with a foreign firm since the US-led war and was followed up by an agreement with Shell, potentially worth $4bn, to develop a joint venture with the South Gas Company in Basra.
This deal has also triggered controversy. Issam al-Chalabi, Iraq's oil minister between 1987 and 1990, questioned why there had been no competitive tendering for the gas-gathering contract and claimed it had gone to Shell as the spoils of war.
"Why choose Shell when you could have chosen ExxonMobil, Chevron, BG or Gazprom?" he asked. "Shell appears to be paying $4bn to get hold of assets that in 20 years could be worth $40bn. Iraq is giving away half its gas wealth and yet this work could have been done by Iraq itself."
The Baghdad government says it aims to increase crude oil production from 2.5m barrels a day to 4.5m by 2013, but faces internal opposition from regional governors and political opponents.
The sale today comes as oil prices have plummeted after stockmarket turmoil on Friday. The price of crude fell by more than $4 at one point to $75 a barrel - the lowest point since September last year and a sharp drop from its peak of $147 in July. Opec, the oil producers' cartel, has called an emergency meeting to agree a cut in output to bolster prices in spite of protestations from politicians including Gordon Brown. Brown said on Friday: "We've had some success in getting the price of oil down: the price this morning is roughly $80, about half what it was a few months ago. I want these price cuts passed on to the consumer as quickly as possible.
"I'm concerned when I hear that the Opec countries are meeting, or are about to meet, to discuss cutting production - in other words, making the price potentially higher than it should be.
"I'm making it clear to Opec it would be wrong for the world economy and wrong for British people who are paying high petrol prices and high fuel prices to cut production and therefore keep prices high."
A government source said: "The one chink of light has been the fall in the price of oil. The last thing we want is to head into a difficult period with a return to high oil prices. People need to act responsibly."
Published on Monday, October 13, 2008 by the Guardian/UK
BP, Shell and ExxonMobil are all expected to attend a meeting at the Park Lane Hotel in Mayfair with the Iraqi oil minister, Hussein al-Shahristani.
Access is being given to eight fields, representing about 40% of the Middle Eastern nation's reserves, at a time when the country remains under occupation by US and British forces.
Two smaller agreements have already been signed with Shell and the China National Petroleum Corporation, but today's sale will ignite arguments over whether the overthrow of Saddam Hussein was a "war for oil" that is now to be consummated by western multinationals seizing control of strategic Iraqi reserves.
Al-Shahristani is expected to reveal some kind of "risk service agreements" that could run for up to 20 years, with formal offers to be submitted by next spring and agreements signed in the summer.
Gregg Muttitt, from the UK-based social and ecological justice group Platform, says he is alarmed that the government is pushing ahead with its plans without the support of many in Iraq.
"Most of the terms of what is being offered have not been disclosed. There are security, political and reputational risks here for oil companies but none of them will want to see one of their competitors gain an advantage," he said.
Heinrich Matthee, a senior Middle East analyst at the specialist risk consultant Control Risks Group, also believes there are many pitfalls for those considering whether to make an offer.
"Currently it is unclear which party in Iraq is authorised to award a contract and at the same time to deliver its side of the bargain," he said. "Any contract with an independent oil company will be subjected to opposition and possible revision after pressure by resource nationalists."
Oil companies will find their reputations at risk from the actions of their Iraqi counterparties, such as joint venture partners, suppliers and agents. They will also have to contend with oil smuggling and the possibility that the ruling alliance could collapse, Matthee said.
He said that if the conspiracy theory that western oil companies egged on US and British governments to invade Iraq were true, the plan could backfire on them and benefit rivals in Asia instead. "It is possible the American army has provided the economic stability that will encourage Malaysian, Chinese and other Asian companies to become involved," he said.
There is no precedent for proven oil reserves of this magnitude being offered up for sale, said Muttitt. "The nearest thing would be the post-Soviet sale of the Kashagan field [in the Caspian Sea], which had 7bn or 8bn barrels."
China's state-owned oil group, CNPC, has already agreed a $3bn (£1.78bn) oil services contract with the government of Iraq to pump oil from the Ahdab oil field.
The deal is the first major oil contract with a foreign firm since the US-led war and was followed up by an agreement with Shell, potentially worth $4bn, to develop a joint venture with the South Gas Company in Basra.
This deal has also triggered controversy. Issam al-Chalabi, Iraq's oil minister between 1987 and 1990, questioned why there had been no competitive tendering for the gas-gathering contract and claimed it had gone to Shell as the spoils of war.
"Why choose Shell when you could have chosen ExxonMobil, Chevron, BG or Gazprom?" he asked. "Shell appears to be paying $4bn to get hold of assets that in 20 years could be worth $40bn. Iraq is giving away half its gas wealth and yet this work could have been done by Iraq itself."
The Baghdad government says it aims to increase crude oil production from 2.5m barrels a day to 4.5m by 2013, but faces internal opposition from regional governors and political opponents.
The sale today comes as oil prices have plummeted after stockmarket turmoil on Friday. The price of crude fell by more than $4 at one point to $75 a barrel - the lowest point since September last year and a sharp drop from its peak of $147 in July. Opec, the oil producers' cartel, has called an emergency meeting to agree a cut in output to bolster prices in spite of protestations from politicians including Gordon Brown. Brown said on Friday: "We've had some success in getting the price of oil down: the price this morning is roughly $80, about half what it was a few months ago. I want these price cuts passed on to the consumer as quickly as possible.
"I'm concerned when I hear that the Opec countries are meeting, or are about to meet, to discuss cutting production - in other words, making the price potentially higher than it should be.
"I'm making it clear to Opec it would be wrong for the world economy and wrong for British people who are paying high petrol prices and high fuel prices to cut production and therefore keep prices high."
A government source said: "The one chink of light has been the fall in the price of oil. The last thing we want is to head into a difficult period with a return to high oil prices. People need to act responsibly."
Published on Monday, October 13, 2008 by the Guardian/UK
Ecologists Raise Alarm Ahead of UN Climate Summit
Ecologists Raise Alarm Ahead of UN Climate Summit
WARSAW - Ecologists raised the alarm Monday over global warming as environment ministers from more than 30 states met in Warsaw ahead of December's UN Climate summit focused on slashing greenhouse gases.
"We're ringing alarm bells -- the UN summit in Poznan must deliver a deal that will keep global warming below two degrees Celsius to the end of this century," Kaisa Kosonen from the global environmental group Greenpeace told reporters.
"Five years from now will be too late," she said as activists rang bells outside of the Warsaw hotel where ministers were gathered.
"We are currently on a pathway that implies temperatures could increase up to seven degrees (by the end of the century)," Kosonen said at an earlier press conference. "There is no more time for small steps."
Greenpeace and the Global Climate Initiative want the UN Poznan summit to agree on binding carbon dioxide (CO2) emissions cuts of 25-40 percent -- from 1990 levels -- by 2020.
Emissions of greenhouse gases like CO2 are believed to be the main culprits causing global warming.
European Union leaders are currently working on a package to cut CO2 emissions by 20 percent -- compared to 1990 emission levels -- by 2020.
Environmentalists insist the consequences of failure to agree on terms to deeply limit carbon dioxide emissions could include widespread flooding from rising sea-levels as polar icecaps melt and increased morbidity from heatwaves, floods and droughts.
Switching to green energy technologies based on solar, wind, biomas and hydro power as well as increasing energy efficiency makes both environmental and economic sense, Kosonen said.
"The amount of money world governments have pooled now in the financial crisis is huge and we have no guarantee it isn't being wasted - it would take just a fraction to spearhead renewable energy technologies," she observed.
World leaders will meet in Poznan, western Poland for the United Nations Climate Change conference dubbed COP 14 from December 1-14.
But within the EU's current talks on limiting emissions, host country Poland is calling on Brussels to increase its carbon dioxide emissions cap for its coal-reliant energy utilities and a more gradual introduction of the auctioned emissions quotas in order to ease the cost burden.
Relying on coal-fired power plants for 96 percent of its electricity, Poland has asked the commission for a 2008-2012 carbon dioxide quota of 284.6 million tonnes per year. Brussels reduced it by 26.7 percent to 208.5 million tonnes.
Poland has also proposed a 20-percent carbon dioxide quota auction be introduced in 2013, rising by degrees each year to reach the full 100 percent by 2020.
The EU's original proposal foresees full CO2 emission quota auctions to begin in 2013.
Published on Tuesday, October 14, 2008 by Agence France Presse
WARSAW - Ecologists raised the alarm Monday over global warming as environment ministers from more than 30 states met in Warsaw ahead of December's UN Climate summit focused on slashing greenhouse gases.
"We're ringing alarm bells -- the UN summit in Poznan must deliver a deal that will keep global warming below two degrees Celsius to the end of this century," Kaisa Kosonen from the global environmental group Greenpeace told reporters.
"Five years from now will be too late," she said as activists rang bells outside of the Warsaw hotel where ministers were gathered.
"We are currently on a pathway that implies temperatures could increase up to seven degrees (by the end of the century)," Kosonen said at an earlier press conference. "There is no more time for small steps."
Greenpeace and the Global Climate Initiative want the UN Poznan summit to agree on binding carbon dioxide (CO2) emissions cuts of 25-40 percent -- from 1990 levels -- by 2020.
Emissions of greenhouse gases like CO2 are believed to be the main culprits causing global warming.
European Union leaders are currently working on a package to cut CO2 emissions by 20 percent -- compared to 1990 emission levels -- by 2020.
Environmentalists insist the consequences of failure to agree on terms to deeply limit carbon dioxide emissions could include widespread flooding from rising sea-levels as polar icecaps melt and increased morbidity from heatwaves, floods and droughts.
Switching to green energy technologies based on solar, wind, biomas and hydro power as well as increasing energy efficiency makes both environmental and economic sense, Kosonen said.
"The amount of money world governments have pooled now in the financial crisis is huge and we have no guarantee it isn't being wasted - it would take just a fraction to spearhead renewable energy technologies," she observed.
World leaders will meet in Poznan, western Poland for the United Nations Climate Change conference dubbed COP 14 from December 1-14.
But within the EU's current talks on limiting emissions, host country Poland is calling on Brussels to increase its carbon dioxide emissions cap for its coal-reliant energy utilities and a more gradual introduction of the auctioned emissions quotas in order to ease the cost burden.
Relying on coal-fired power plants for 96 percent of its electricity, Poland has asked the commission for a 2008-2012 carbon dioxide quota of 284.6 million tonnes per year. Brussels reduced it by 26.7 percent to 208.5 million tonnes.
Poland has also proposed a 20-percent carbon dioxide quota auction be introduced in 2013, rising by degrees each year to reach the full 100 percent by 2020.
The EU's original proposal foresees full CO2 emission quota auctions to begin in 2013.
Published on Tuesday, October 14, 2008 by Agence France Presse
CIA Tactics Endorsed In Secret Memos Waterboarding Got White House Nod
The Bush administration issued a pair of secret memos to the CIA in 2003 and 2004 that explicitly endorsed the agency's use of interrogation techniques such as waterboarding against al-Qaeda suspects -- documents prompted by worries among intelligence officials about a possible backlash if details of the program became public.
The classified memos, which have not been previously disclosed, were requested by then-CIA Director George J. Tenet more than a year after the start of the secret interrogations, according to four administration and intelligence officials familiar with the documents. Although Justice Department lawyers, beginning in 2002, had signed off on the agency's interrogation methods, senior CIA officials were troubled that White House policymakers had never endorsed the program in writing.
The memos were the first -- and, for years, the only -- tangible expressions of the administration's consent for the CIA's use of harsh measures to extract information from captured al-Qaeda leaders, the sources said. As early as the spring of 2002, several White House officials, including then-national security adviser Condoleezza Rice and Vice President Cheney, were given individual briefings by Tenet and his deputies, the officials said. Rice, in a statement to congressional investigators last month, confirmed the briefings and acknowledged that the CIA director had pressed the White House for "policy approval."
The repeated requests for a paper trail reflected growing worries within the CIA that the administration might later distance itself from key decisions about the handling of captured al-Qaeda leaders, former intelligence officials said. The concerns grew more pronounced after the revelations of mistreatment of detainees at the Abu Ghraib prison in Iraq, and further still as tensions grew between the administration and its intelligence advisers over the conduct of the Iraq war.
"It came up in the daily meetings. We heard it from our field officers," said a former senior intelligence official familiar with the events. "We were already worried that we" were going to be blamed.
A. John Radsan, a lawyer in the CIA general counsel's office until 2004, remembered the discussions but did not personally view the memos the agency received in response to its concerns. "The question was whether we had enough 'top cover,' " Radsan said.
Tenet first pressed the White House for written approval in June 2003, during a meeting with members of the National Security Council, including Rice, the officials said. Days later, he got what he wanted: a brief memo conveying the administration's approval for the CIA's interrogation methods, the officials said.
Administration officials confirmed the existence of the memos, but neither they nor former intelligence officers would describe their contents in detail because they remain classified. The sources all spoke on the condition of anonymity because they were not cleared to discuss the events.
The second request from Tenet, in June 2004, reflected growing worries among agency officials who had just witnessed the public outcry over the Abu Ghraib scandal. Officials who held senior posts at the time also spoke of deteriorating relations between the CIA and the White House over the war in Iraq -- a rift that prompted some to believe that the agency needed even more explicit proof of the administration's support.
"The CIA by this time is using the word 'insurgency' to describe the Iraq conflict, so the White House is viewing the agency with suspicion," said a second former senior intelligence official.
As recently as last month, the administration had never publicly acknowledged that its policymakers knew about the specific techniques, such as waterboarding, that the agency used against high-ranking terrorism suspects. In her unprecedented account to lawmakers last month, Rice, now secretary of state, portrayed the White House as initially uneasy about a controversial CIA plan for interrogating top al-Qaeda suspects.
After learning about waterboarding and similar tactics in early 2002, several White House officials questioned whether such harsh measures were "effective and necessary . . . and lawful," Rice said. Her concerns led to an investigation by the Justice Department's criminal division into whether the techniques were legal.
But whatever misgivings existed that spring were apparently overcome. Former and current CIA officials say no such reservations were voiced in their presence.
In interviews, the officials recounted a series of private briefings about the program with members of the administration's security team, including Rice and Cheney, followed by more formal meetings before a larger group including then-Attorney General John D. Ashcroft, then-White House counsel Alberto R. Gonzales and then-Defense Secretary Donald H. Rumsfeld. None of the officials recalled President Bush being present at any of the discussions.
Several of the key meetings have been previously described in news articles and books, but Rice last month became the first Cabinet-level official to publicly confirm the White House's awareness of the program in its earliest phases. In written responses to questions from the Senate Armed Services Committee, Rice said Tenet's description of the agency's interrogation methods prompted her to investigate further to see whether the program violated U.S. laws or international treaties, according to her written responses, dated Sept. 12 and released late last month.
"I asked that . . . Ashcroft personally advise the NSC principles whether the program was lawful," Rice wrote.
Current and former intelligence officials familiar with the briefings described Tenet as supportive of enhanced interrogation techniques, which the officials said were developed by CIA officers after the agency's first high-level captive, al-Qaeda operative Zayn al-Abidin Muhammed Hussein, better known as Abu Zubaida, refused to cooperate with interrogators.
"The CIA believed then, and now, that the program was useful and helped save lives," said a former senior intelligence official knowledgeable about the events. "But in the agency's view, it was like this: 'We don't want to continue unless you tell us in writing that it's not only legal but is the policy of the administration.' "
One administration official familiar with the meetings said the CIA made such a convincing case that no one questioned whether the methods were necessary to prevent further terrorist attacks.
"The CIA had the White House boxed in," said the official. "They were saying, 'It's the only way to get the information we needed, and -- by the way -- we think there's another attack coming up.' It left the principals in an extremely difficult position and put the decision-making on a very fast track."
But others who were present said Tenet seemed more interested in protecting his subordinates than in selling the administration on a policy that administration lawyers had already authorized.
"The suggestion that someone from CIA came in and browbeat everybody is ridiculous," said one former agency official familiar with the meeting. "The CIA understood that it was controversial and would be widely criticized if it became public," the official said of the interrogation program. "But given the tenor of the times and the belief that more attacks were coming, they felt they had to do what they could to stop the attack."
The CIA's anxiety was partly fueled by the lack of explicit presidential authorization for the interrogation program. A secret White House "memorandum of notification" signed by Bush on Sept. 15, 2001, gave the agency broad authority to wage war against al-Qaeda, including killing and capturing its members. But it did not spell out how captives should be handled during interrogation.
But by the time the CIA requested written approval of its policy, in June 2003, the population of its secret prisons had grown from one to nine, including Khalid Sheik Mohammed, the alleged principal architect of the Sept. 11, 2001, attacks. Three of the detainees had been subjected to waterboarding, which involves strapping a prisoner to a board, covering his face and pouring water over his nose and mouth to simulate drowning.
By the spring of 2004, the concerns among agency officials had multiplied, in part because of shifting views among administration lawyers about what acts might constitute torture, leading Tenet to ask a second time for written confirmation from the White House. This time the reaction was far more reserved, recalled two former intelligence officials.
"The Justice Department in particular was resistant," said one former intelligence official who participated in the discussions. "They said it doesn't need to be in writing."
Tenet and his deputies made their case in yet another briefing before the White House national security team in June 2004. It was to be one of the last such meetings for Tenet, who had already announced plans to step down as CIA director. Author Jane Mayer, who described the briefing in her recent book, "The Dark Side," said the graphic accounts of interrogation appeared to make some participants uncomfortable. "History will not judge us kindly," Mayer quoted Ashcroft as saying.
Participants in the meeting did not recall whether a vote was taken. Several weeks passed, and Tenet left the agency without receiving a formal response.
Finally, in mid-July, a memo was forwarded to the CIA reaffirming the administration's backing for the interrogation program. Tenet had acquired the statement of support he sought.
The classified memos, which have not been previously disclosed, were requested by then-CIA Director George J. Tenet more than a year after the start of the secret interrogations, according to four administration and intelligence officials familiar with the documents. Although Justice Department lawyers, beginning in 2002, had signed off on the agency's interrogation methods, senior CIA officials were troubled that White House policymakers had never endorsed the program in writing.
The memos were the first -- and, for years, the only -- tangible expressions of the administration's consent for the CIA's use of harsh measures to extract information from captured al-Qaeda leaders, the sources said. As early as the spring of 2002, several White House officials, including then-national security adviser Condoleezza Rice and Vice President Cheney, were given individual briefings by Tenet and his deputies, the officials said. Rice, in a statement to congressional investigators last month, confirmed the briefings and acknowledged that the CIA director had pressed the White House for "policy approval."
The repeated requests for a paper trail reflected growing worries within the CIA that the administration might later distance itself from key decisions about the handling of captured al-Qaeda leaders, former intelligence officials said. The concerns grew more pronounced after the revelations of mistreatment of detainees at the Abu Ghraib prison in Iraq, and further still as tensions grew between the administration and its intelligence advisers over the conduct of the Iraq war.
"It came up in the daily meetings. We heard it from our field officers," said a former senior intelligence official familiar with the events. "We were already worried that we" were going to be blamed.
A. John Radsan, a lawyer in the CIA general counsel's office until 2004, remembered the discussions but did not personally view the memos the agency received in response to its concerns. "The question was whether we had enough 'top cover,' " Radsan said.
Tenet first pressed the White House for written approval in June 2003, during a meeting with members of the National Security Council, including Rice, the officials said. Days later, he got what he wanted: a brief memo conveying the administration's approval for the CIA's interrogation methods, the officials said.
Administration officials confirmed the existence of the memos, but neither they nor former intelligence officers would describe their contents in detail because they remain classified. The sources all spoke on the condition of anonymity because they were not cleared to discuss the events.
The second request from Tenet, in June 2004, reflected growing worries among agency officials who had just witnessed the public outcry over the Abu Ghraib scandal. Officials who held senior posts at the time also spoke of deteriorating relations between the CIA and the White House over the war in Iraq -- a rift that prompted some to believe that the agency needed even more explicit proof of the administration's support.
"The CIA by this time is using the word 'insurgency' to describe the Iraq conflict, so the White House is viewing the agency with suspicion," said a second former senior intelligence official.
As recently as last month, the administration had never publicly acknowledged that its policymakers knew about the specific techniques, such as waterboarding, that the agency used against high-ranking terrorism suspects. In her unprecedented account to lawmakers last month, Rice, now secretary of state, portrayed the White House as initially uneasy about a controversial CIA plan for interrogating top al-Qaeda suspects.
After learning about waterboarding and similar tactics in early 2002, several White House officials questioned whether such harsh measures were "effective and necessary . . . and lawful," Rice said. Her concerns led to an investigation by the Justice Department's criminal division into whether the techniques were legal.
But whatever misgivings existed that spring were apparently overcome. Former and current CIA officials say no such reservations were voiced in their presence.
In interviews, the officials recounted a series of private briefings about the program with members of the administration's security team, including Rice and Cheney, followed by more formal meetings before a larger group including then-Attorney General John D. Ashcroft, then-White House counsel Alberto R. Gonzales and then-Defense Secretary Donald H. Rumsfeld. None of the officials recalled President Bush being present at any of the discussions.
Several of the key meetings have been previously described in news articles and books, but Rice last month became the first Cabinet-level official to publicly confirm the White House's awareness of the program in its earliest phases. In written responses to questions from the Senate Armed Services Committee, Rice said Tenet's description of the agency's interrogation methods prompted her to investigate further to see whether the program violated U.S. laws or international treaties, according to her written responses, dated Sept. 12 and released late last month.
"I asked that . . . Ashcroft personally advise the NSC principles whether the program was lawful," Rice wrote.
Current and former intelligence officials familiar with the briefings described Tenet as supportive of enhanced interrogation techniques, which the officials said were developed by CIA officers after the agency's first high-level captive, al-Qaeda operative Zayn al-Abidin Muhammed Hussein, better known as Abu Zubaida, refused to cooperate with interrogators.
"The CIA believed then, and now, that the program was useful and helped save lives," said a former senior intelligence official knowledgeable about the events. "But in the agency's view, it was like this: 'We don't want to continue unless you tell us in writing that it's not only legal but is the policy of the administration.' "
One administration official familiar with the meetings said the CIA made such a convincing case that no one questioned whether the methods were necessary to prevent further terrorist attacks.
"The CIA had the White House boxed in," said the official. "They were saying, 'It's the only way to get the information we needed, and -- by the way -- we think there's another attack coming up.' It left the principals in an extremely difficult position and put the decision-making on a very fast track."
But others who were present said Tenet seemed more interested in protecting his subordinates than in selling the administration on a policy that administration lawyers had already authorized.
"The suggestion that someone from CIA came in and browbeat everybody is ridiculous," said one former agency official familiar with the meeting. "The CIA understood that it was controversial and would be widely criticized if it became public," the official said of the interrogation program. "But given the tenor of the times and the belief that more attacks were coming, they felt they had to do what they could to stop the attack."
The CIA's anxiety was partly fueled by the lack of explicit presidential authorization for the interrogation program. A secret White House "memorandum of notification" signed by Bush on Sept. 15, 2001, gave the agency broad authority to wage war against al-Qaeda, including killing and capturing its members. But it did not spell out how captives should be handled during interrogation.
But by the time the CIA requested written approval of its policy, in June 2003, the population of its secret prisons had grown from one to nine, including Khalid Sheik Mohammed, the alleged principal architect of the Sept. 11, 2001, attacks. Three of the detainees had been subjected to waterboarding, which involves strapping a prisoner to a board, covering his face and pouring water over his nose and mouth to simulate drowning.
By the spring of 2004, the concerns among agency officials had multiplied, in part because of shifting views among administration lawyers about what acts might constitute torture, leading Tenet to ask a second time for written confirmation from the White House. This time the reaction was far more reserved, recalled two former intelligence officials.
"The Justice Department in particular was resistant," said one former intelligence official who participated in the discussions. "They said it doesn't need to be in writing."
Tenet and his deputies made their case in yet another briefing before the White House national security team in June 2004. It was to be one of the last such meetings for Tenet, who had already announced plans to step down as CIA director. Author Jane Mayer, who described the briefing in her recent book, "The Dark Side," said the graphic accounts of interrogation appeared to make some participants uncomfortable. "History will not judge us kindly," Mayer quoted Ashcroft as saying.
Participants in the meeting did not recall whether a vote was taken. Several weeks passed, and Tenet left the agency without receiving a formal response.
Finally, in mid-July, a memo was forwarded to the CIA reaffirming the administration's backing for the interrogation program. Tenet had acquired the statement of support he sought.
onsdag den 15. oktober 2008
The Diversity of Development: The Evolution of Complexity
The living world is made up of complex biological systems. At the level of the individual, the most complex of these systems is the human brain. But the process of evolution has produced even more complex systems, such as tropical reefs and rainforests, that are made up of millions of interacting species. UCSD Professor of Ecology Christopher Wills explores how this complexity evolved and what genetic and ecological processes complex systems have in common.
Verden skælver
Kim Fournais adm. direktør i Saxo Bank advarer om, at forkert politik kan forlænge den økonomiske krise, ligesom det skete under The Great Depression.
Reguleringen af de frie markedskræfter og politikernes konfiskation af vores produktion og forvaltning af vores moral har ført os ud i den værste krise siden 1930'erne. Vi er havnet i et moralsk og økonomisk kaos, men der er opstået et reelt håb om, at krisen vil give plads til fornuft og samarbejde her i Danmark, efter at aftalen mellem regeringen og oppositionen samt finanssektoren er indgået. Kunsten bliver fremadrettet at udnytte samarbejdet til at skabe et rationelt samfund, der baserer sit forbrug på arbejdsomhed og sunde investeringer.
Det Private Beredskab, der oprettes med et indskud på 35 mia. kr. i form af garantiprovision og tabskaution, betales af den finansielle sektor. Så langt så godt. Der oprettes et afviklingsselskab, hvis formål er at overtage nødlidende banker og afvikle disse på en kontrolleret måde, såfremt der ikke kan findes en privat løsning. Endnu et skridt i den rigtige retning, når nu det skulle være. Problemet er, at alle banker i Danmark betaler solidarisk til, at man fra branchens side kan spænde et sikkerhedsnet ud under banker, der har jagtet høje indlånsrenter og i det hele taget spillet hasard med indskydernes penge. Man skulle naturligvis have ladet disse banker blive overtaget, så aktionærer og stillere af ansvarlig lånekapital ville miste deres investering, inden problemerne bliver uoverskuelige. Nu bliver det så de veldrevne banker, der skal betale for de dårligt drevne banker, som de ikke har haft indflydelse på. Det er naturligvis uretfærdigt.
Når eksempelvis Saxo Bank alligevel støtter aftalen, selvom vores forretningsmodel gør, at vi ikke er negativt påvirket af krisen, skyldes det for det første, at vi stadig tror, at aftalen kan skabe en vis stabilitet på markedet, når budskabet bliver ordentligt kommunikeret til den bredere internationale verden. Faktisk er danske banker nu blandt verdens mest sikre banker. Danmark har såkaldt AAA-rating, hvilket betyder, at ingen indskydere i danske banker vil miste deres penge, hvis en nødlidende bank overtages af afviklingsselskabet.
Dertil kommer, at aktionærerne og folk, der har sikret ansvarlig lånekapital, reelt mister deres penge, hvis en bank overtages af afviklingsselskabet. Det vil fremme en sundere aktiekultur i Danmark, hvor investorerne forhåbentlig begynder at forstå, at der findes en risiko ved investering, og at denne risiko ikke blot er en teoretisk størrelse. Det vil skabe en mere ansvarlig, rationel adfærd og afføde, at de investeringer, man i de senere år har set i alle mulige fantasifulde projekter, stoppes, og investorerne begynder at være mere kritiske overfor virksomhedernes ledelser og deres dispositioner.
Ligesom boligkrisen spredte sig til finansverdenen, vil finanskrisen sprede sig til den generelle økonomi. Vi ser kun toppen af isbjerget i disse dage, men som vi ved, er det kun ca. 1/9 af isbjerget. De resterende 8/9 ligger under havets overflade, og verden går store problemer i møde.
Det er lang tid siden, at vi aflyste overophedningen i Saxo Bank, men desværre talte vi for døve øren. Nu er krisen en realitet, og selvom Danmark allerede er ramt af krisen, og vil blive det yderligere, så er der gode muligheder for at komme styrket ud af krisen. Ikke mindst fordi vi i de sidste 25 år faktisk har sikret en relativ god økonomi.
USA har i de seneste uger taget stormskidt mod de tiltag, som forlængede den sidste store krise, der kulminerede i 1929, men varede mange år frem. To økonomer fra UCLA har tidligere fremlagt forskning, som viser, hvorfor den Store Depression blev så stor og varede op til 15 år. De kommer frem til den skræmmende konklusion, at det var velmenende politikere, der forlængede krisen ikke mindst den daværende præsident, Franklin D. Roosevelt. Jeg er ikke ude i en kritik af Roosevelt, men kan blot konstatere, at Den Store Depression ikke behøvede at vare op til 15 år, og det er da gode nyheder for os i dag.
"Årsagen til, at den Store Depression varede så lang tid, har altid været et stort mysterium, og fordi vi aldrig rigtig kendte årsagen, har vi altid bekymret os for, om vi igen ville få 10-15 års økonomisk nedtur," sagde Lee Ohanian, vicerektor for UCLA's Department of Economics, i en pressemeddelelse. "Vi har fundet ud af, at en gentagelse af Den Store Depression ikke er sandsynlig, med mindre lovgiverne sammensætter en redningsplan med dårligt tænkte stimuluspakker."
I en artikel i augustnummeret af the Journal of Political Economy pointerer Harold L. Cole og Lee Ohanian, at hvor vi i dag ved, at lønninger og priser falder, når arbejdsløsheden stiger, så resulterede New Deal politikken i, at lønningerne, men dermed også priserne, steg. Man kortsluttede så at sige markedskræfterne i stedet for at lade dem få ro til at slutte krisen af sig selv. Det havde været hurtigere, ved vi i dag, skriver de. De kunstigt oppustede lønninger og priser ødelagde markedets selvregulerende kræfter, og resultatet var altså en 15 år lang depression.
Markedskræfterne er dig og mig. Vi er lidt over 5 mio. danskere, og spørg dig selv, om 5 mio. ikke ved bedre end 179 politikere. I stedet for at kortslutte markedskræfterne, skal vi sikre, at danskerne råder over deres egne penge (det burde være selvindlysende!), og det skal ske indenfor retfærdige, rationelle rammer. Hvis politikerne vil hjælpe os med at slutte krisen, så den ikke varer 15 år som krisen i 1930erne, så skal de altså vedtage de rigtige - men for nogle meget kontroversielle - reformer nu.
Vi har i Danmark fantastiske muligheder for at trodse den globale krise og komme styrket ud af den. Til at begynde med, bør vi sikre lovhjemmel, så man kan tilbyde kunder i finansielle institutioner segregerede konti. Dvs. konti der ikke hænger sammen med bankens egne midler. Ligesom en advokat har en klient-konto, som ikke bliver berørt af advokatens egne potentielle økonomiske problemer. Dermed skal banken selv finansiere egne spekulationer og kan ikke bruge kunders midler til spekulation. Hvis man er "too big to fail", så må det også betyde, at man ikke kan påtage sig risici, der gør, at man reelt kan gå konkurs. En "smiley"-ordning for banker ville være på sin plads, selvom man aldrig må glemme, at indskyderne selv har et ansvar for at tænke over, hvem de betror deres penge. Der mangler dog informationer og gennemsigtighed.
Margin, dvs. kontant sikkerhedsstillelse, med en løbende regulering af sikkerhed i forhold til markedsværdi, ville sikre, at ingen ville kunne geare uden af have "rigtige og likvide" sikkerheder for deres forretninger. Det system kendes allerede fra f.eks. futures-børser, der har opereret fint, også under denne krise. Margin-niveauer vil også altid blive justeret opad, når usikkerheden stiger, og dermed sikre, at der er balance imellem sikkerheder og eksponering og dermed risiko. Det vil med andre ord sige, at store eksponeringer og hårdt gearede forretninger altid ville blive lukket ned i tide.
Banker, som tager imod kunders indskud og tilbyder en rente, der ligger over markedsrenten, burde udsende en advarsel til deres kunder og fortælle, at de ikke er i stand til selv at låne til markedsvilkår, og at de har lånt flere penge ud, end de har i indskud. Det er et for de fleste tydeligt tegn på likviditetsproblemer, og i dette klima bliver regningen ved konkurs sendt direkte til skatteyderne, der i forvejen er hårdt prøvet.
Når der er ryddet op i den finansielle sektor, må vi se på, hvad det ellers er, der er gået galt. Alt for mange har finansieret deres forbrug ved hjælp af afdragsfrie lån og friværdi. Når gode, arbejdsomme danskere må ty til den slags usundheder for at få økonomien til at hænge sammen i dagligdagen, så er det et tegn på, at samfundet er skruet forkert sammen. Folk har tjent flere penge på at eje et hus end ved at gå på arbejde i mange år. Det er usundt, og det skader muligheden for at opbygge et arbejdsomt og produktivt samfund. Vi må tænke skattesystemet helt forfra og sikre en lav skat for alle, der vil gøre en indsats på arbejdsmarkedet. Skattereformen må fremrykkes, hvis det er det, der skal til for at lette skatterne med det samme, så de kan træde i kraft 1. januar.
Verden skælver, men det er stadig ikke for sent at gøre det rigtige og få samfundet på ret kurs. Der er faktisk en reel mulighed for, at Danmark kan blive en rollemodel for resten af verden og sikre, at den ikke gå under i misforstået altruisme og skadelig planøkonomi.
Reguleringen af de frie markedskræfter og politikernes konfiskation af vores produktion og forvaltning af vores moral har ført os ud i den værste krise siden 1930'erne. Vi er havnet i et moralsk og økonomisk kaos, men der er opstået et reelt håb om, at krisen vil give plads til fornuft og samarbejde her i Danmark, efter at aftalen mellem regeringen og oppositionen samt finanssektoren er indgået. Kunsten bliver fremadrettet at udnytte samarbejdet til at skabe et rationelt samfund, der baserer sit forbrug på arbejdsomhed og sunde investeringer.
Det Private Beredskab, der oprettes med et indskud på 35 mia. kr. i form af garantiprovision og tabskaution, betales af den finansielle sektor. Så langt så godt. Der oprettes et afviklingsselskab, hvis formål er at overtage nødlidende banker og afvikle disse på en kontrolleret måde, såfremt der ikke kan findes en privat løsning. Endnu et skridt i den rigtige retning, når nu det skulle være. Problemet er, at alle banker i Danmark betaler solidarisk til, at man fra branchens side kan spænde et sikkerhedsnet ud under banker, der har jagtet høje indlånsrenter og i det hele taget spillet hasard med indskydernes penge. Man skulle naturligvis have ladet disse banker blive overtaget, så aktionærer og stillere af ansvarlig lånekapital ville miste deres investering, inden problemerne bliver uoverskuelige. Nu bliver det så de veldrevne banker, der skal betale for de dårligt drevne banker, som de ikke har haft indflydelse på. Det er naturligvis uretfærdigt.
Når eksempelvis Saxo Bank alligevel støtter aftalen, selvom vores forretningsmodel gør, at vi ikke er negativt påvirket af krisen, skyldes det for det første, at vi stadig tror, at aftalen kan skabe en vis stabilitet på markedet, når budskabet bliver ordentligt kommunikeret til den bredere internationale verden. Faktisk er danske banker nu blandt verdens mest sikre banker. Danmark har såkaldt AAA-rating, hvilket betyder, at ingen indskydere i danske banker vil miste deres penge, hvis en nødlidende bank overtages af afviklingsselskabet.
Dertil kommer, at aktionærerne og folk, der har sikret ansvarlig lånekapital, reelt mister deres penge, hvis en bank overtages af afviklingsselskabet. Det vil fremme en sundere aktiekultur i Danmark, hvor investorerne forhåbentlig begynder at forstå, at der findes en risiko ved investering, og at denne risiko ikke blot er en teoretisk størrelse. Det vil skabe en mere ansvarlig, rationel adfærd og afføde, at de investeringer, man i de senere år har set i alle mulige fantasifulde projekter, stoppes, og investorerne begynder at være mere kritiske overfor virksomhedernes ledelser og deres dispositioner.
Ligesom boligkrisen spredte sig til finansverdenen, vil finanskrisen sprede sig til den generelle økonomi. Vi ser kun toppen af isbjerget i disse dage, men som vi ved, er det kun ca. 1/9 af isbjerget. De resterende 8/9 ligger under havets overflade, og verden går store problemer i møde.
Det er lang tid siden, at vi aflyste overophedningen i Saxo Bank, men desværre talte vi for døve øren. Nu er krisen en realitet, og selvom Danmark allerede er ramt af krisen, og vil blive det yderligere, så er der gode muligheder for at komme styrket ud af krisen. Ikke mindst fordi vi i de sidste 25 år faktisk har sikret en relativ god økonomi.
USA har i de seneste uger taget stormskidt mod de tiltag, som forlængede den sidste store krise, der kulminerede i 1929, men varede mange år frem. To økonomer fra UCLA har tidligere fremlagt forskning, som viser, hvorfor den Store Depression blev så stor og varede op til 15 år. De kommer frem til den skræmmende konklusion, at det var velmenende politikere, der forlængede krisen ikke mindst den daværende præsident, Franklin D. Roosevelt. Jeg er ikke ude i en kritik af Roosevelt, men kan blot konstatere, at Den Store Depression ikke behøvede at vare op til 15 år, og det er da gode nyheder for os i dag.
"Årsagen til, at den Store Depression varede så lang tid, har altid været et stort mysterium, og fordi vi aldrig rigtig kendte årsagen, har vi altid bekymret os for, om vi igen ville få 10-15 års økonomisk nedtur," sagde Lee Ohanian, vicerektor for UCLA's Department of Economics, i en pressemeddelelse. "Vi har fundet ud af, at en gentagelse af Den Store Depression ikke er sandsynlig, med mindre lovgiverne sammensætter en redningsplan med dårligt tænkte stimuluspakker."
I en artikel i augustnummeret af the Journal of Political Economy pointerer Harold L. Cole og Lee Ohanian, at hvor vi i dag ved, at lønninger og priser falder, når arbejdsløsheden stiger, så resulterede New Deal politikken i, at lønningerne, men dermed også priserne, steg. Man kortsluttede så at sige markedskræfterne i stedet for at lade dem få ro til at slutte krisen af sig selv. Det havde været hurtigere, ved vi i dag, skriver de. De kunstigt oppustede lønninger og priser ødelagde markedets selvregulerende kræfter, og resultatet var altså en 15 år lang depression.
Markedskræfterne er dig og mig. Vi er lidt over 5 mio. danskere, og spørg dig selv, om 5 mio. ikke ved bedre end 179 politikere. I stedet for at kortslutte markedskræfterne, skal vi sikre, at danskerne råder over deres egne penge (det burde være selvindlysende!), og det skal ske indenfor retfærdige, rationelle rammer. Hvis politikerne vil hjælpe os med at slutte krisen, så den ikke varer 15 år som krisen i 1930erne, så skal de altså vedtage de rigtige - men for nogle meget kontroversielle - reformer nu.
Vi har i Danmark fantastiske muligheder for at trodse den globale krise og komme styrket ud af den. Til at begynde med, bør vi sikre lovhjemmel, så man kan tilbyde kunder i finansielle institutioner segregerede konti. Dvs. konti der ikke hænger sammen med bankens egne midler. Ligesom en advokat har en klient-konto, som ikke bliver berørt af advokatens egne potentielle økonomiske problemer. Dermed skal banken selv finansiere egne spekulationer og kan ikke bruge kunders midler til spekulation. Hvis man er "too big to fail", så må det også betyde, at man ikke kan påtage sig risici, der gør, at man reelt kan gå konkurs. En "smiley"-ordning for banker ville være på sin plads, selvom man aldrig må glemme, at indskyderne selv har et ansvar for at tænke over, hvem de betror deres penge. Der mangler dog informationer og gennemsigtighed.
Margin, dvs. kontant sikkerhedsstillelse, med en løbende regulering af sikkerhed i forhold til markedsværdi, ville sikre, at ingen ville kunne geare uden af have "rigtige og likvide" sikkerheder for deres forretninger. Det system kendes allerede fra f.eks. futures-børser, der har opereret fint, også under denne krise. Margin-niveauer vil også altid blive justeret opad, når usikkerheden stiger, og dermed sikre, at der er balance imellem sikkerheder og eksponering og dermed risiko. Det vil med andre ord sige, at store eksponeringer og hårdt gearede forretninger altid ville blive lukket ned i tide.
Banker, som tager imod kunders indskud og tilbyder en rente, der ligger over markedsrenten, burde udsende en advarsel til deres kunder og fortælle, at de ikke er i stand til selv at låne til markedsvilkår, og at de har lånt flere penge ud, end de har i indskud. Det er et for de fleste tydeligt tegn på likviditetsproblemer, og i dette klima bliver regningen ved konkurs sendt direkte til skatteyderne, der i forvejen er hårdt prøvet.
Når der er ryddet op i den finansielle sektor, må vi se på, hvad det ellers er, der er gået galt. Alt for mange har finansieret deres forbrug ved hjælp af afdragsfrie lån og friværdi. Når gode, arbejdsomme danskere må ty til den slags usundheder for at få økonomien til at hænge sammen i dagligdagen, så er det et tegn på, at samfundet er skruet forkert sammen. Folk har tjent flere penge på at eje et hus end ved at gå på arbejde i mange år. Det er usundt, og det skader muligheden for at opbygge et arbejdsomt og produktivt samfund. Vi må tænke skattesystemet helt forfra og sikre en lav skat for alle, der vil gøre en indsats på arbejdsmarkedet. Skattereformen må fremrykkes, hvis det er det, der skal til for at lette skatterne med det samme, så de kan træde i kraft 1. januar.
Verden skælver, men det er stadig ikke for sent at gøre det rigtige og få samfundet på ret kurs. Der er faktisk en reel mulighed for, at Danmark kan blive en rollemodel for resten af verden og sikre, at den ikke gå under i misforstået altruisme og skadelig planøkonomi.
Conversations With History: How the War on Terror Turned into A War on American Values
Conversations host Harry Kreisler welcomes New Yorker writer Jane Mayer to discuss her book, The Dark Side. She explains how, under the direction of Vice President Cheney and his Assistant David Addington, the Bush administration, contrary to American history and tradition, implemented a policy of torture and rendition in violation of U.S. and international law. She describes the resistance within the government and the military to these actions. Mayer also offers a compelling account of what happened to detainees under the Cheney/Addington regime. She analyzes long term consequences for the fight against terror and for U.S. moral leadership in the world.
This Stock Collapse Is Petty When Compared to the Nature Crunch
Published on Tuesday, October 14, 2008 by The Guardian/UK
This Stock Collapse Is Petty When Compared to the Nature Crunch
The financial crisis at least affords us an opportunity to now rethink our catastrophic ecological trajectory
by George Monbiot
This is nothing. Well, nothing by comparison to what's coming. The financial crisis for which we must now pay so heavily prefigures the real collapse, when humanity bumps against its ecological limits.
As we goggle at the fluttering financial figures, a different set of numbers passes us by. On Friday, Pavan Sukhdev, the Deutsche Bank economist leading a European study on ecosystems, reported that we are losing natural capital worth between $2 trillion and $5 trillion every year as a result of deforestation alone. The losses incurred so far by the financial sector amount to between $1 trillion and $1.5 trillion. Sukhdev arrived at his figure by estimating the value of the services - such as locking up carbon and providing fresh water - that forests perform, and calculating the cost of either replacing them or living without them. The credit crunch is petty when compared to the nature crunch.
The two crises have the same cause. In both cases, those who exploit the resource have demanded impossible rates of return and invoked debts that can never be repaid. In both cases we denied the likely consequences. I used to believe that collective denial was peculiar to climate change. Now I know that it's the first response to every impending dislocation.
Gordon Brown, for instance, was as much in denial about financial realities as any toxic debt trader. In June last year, during his Mansion House speech, he boasted that 40% of the world's foreign equities are now traded here. The financial sector's success had come about, he said, partly because the government had taken "a risk-based regulatory approach". In the same hall three years before, he pledged that "in budget after budget I want us to do even more to encourage the risk takers". Can anyone, surveying this mess, now doubt the value of the precautionary principle?
Ecology and economy are both derived from the Greek word oikos - a house or dwelling. Our survival depends on the rational management of this home: the space in which life can be sustained. The rules are the same in both cases. If you extract resources at a rate beyond the level of replenishment, your stock will collapse. That's another noun which reminds us of the connection. The Oxford English Dictionary gives 69 definitions of "stock". When it means a fund or store, the word evokes the trunk - or stock - of a tree, "from which the gains are an outgrowth". Collapse occurs when you prune the tree so heavily that it dies. Ecology is the stock from which all wealth grows.
The two crises feed each other. As a result of Iceland's financial collapse, it is now contemplating joining the European Union, which means surrendering its fishing grounds to the common fisheries policy. Already the prime minister, Geir Haarde, has suggested that his countrymen concentrate on exploiting the ocean. The economic disaster will cause an ecological disaster.
Normally it's the other way around. In his book Collapse: How Societies Choose to Fail or Succeed, Jared Diamond shows how ecological crisis is often the prelude to social catatrosphe. The obvious example is Easter Island, where society disintegrated soon after the population reached its highest historical numbers, the last trees were cut down and the construction of stone monuments peaked. The island chiefs had competed to erect ever bigger statues. These required wood and rope (made from bark) for transport, and extra food for the labourers. As the trees and soils on which the islanders depended disappeared, the population crashed and the survivors turned to cannibalism. Diamond wonders what the Easter islander who cut down the last palm tree might have thought. "Like modern loggers, did he shout 'Jobs, not trees!'? Or: 'Technology will solve our problems, never fear, we'll find a substitute for wood.'? Or: 'We don't have proof that there aren't palms somewhere else on Easter ... your proposed ban on logging is premature and driven by fear-mongering'?".
Ecological collapse, Diamond shows, is as likely to be the result of economic success as of economic failure. The Maya of Central America, for instance, were among the most advanced and successful people of their time. But a combination of population growth, extravagant construction projects and poor land management wiped out between 90% and 99% of the population. The Mayan collapse was accelerated by "the competition among kings and nobles that led to a chronic emphasis on war and erecting monuments rather than on solving underlying problems". (Does any of this sound familiar?) Again, the largest monuments were erected just before the ecosystem crashed. Again, this extravagance was partly responsible for the collapse: trees were used for making plaster with which to decorate their temples. The plaster became thicker and thicker as the kings sought to outdo each other's conspicuous consumption.
Here are some of the reasons why people fail to prevent ecological collapse. Their resources appear at first to be inexhaustible; a long-term trend of depletion is concealed by short-term fluctuations; small numbers of powerful people advance their interests by damaging those of everyone else; short-term profits trump long-term survival. The same, in all cases, can be said of the collapse of financial systems. Is this how human beings are destined to behave? If we cannot act until stocks - of either kind - start sliding towards oblivion, we're knackered.
But one of the benefits of modernity is our ability to spot trends and predict results. If fish in a depleted ecosystem grow by 5% a year and the catch expands by 10% a year, the fishery will collapse. If the global economy keeps growing at 3% a year (or 1,700% a century), it too will hit the wall.
Iam not going to suggest, as some scoundrel who shares a name with me did on these pages last year, that we should welcome a recession. But the financial crisis provides us with an opportunity to rethink this trajectory; an opportunity that is not available during periods of economic success. Governments restructuring their economies should read Herman Daly's book Steady-State Economics.
As usual I haven't left enough space to discuss this, so the details will have to wait for another column. Or you can read the summary published by the Sustainable Development Commission (all references are on my website). But what Daly suggests is that nations which are already rich should replace growth - "more of the same stuff" - with development - "the same amount of better stuff". A steady-state economy has a constant stock of capital that is maintained by a rate of throughput no higher than the ecosystem can absorb. The use of resources is capped and the right to exploit them is auctioned. Poverty is addressed through the redistribution of wealth. The banks can lend only as much money as they possess.
Alternatively, we can persist in the magical thinking whose results have just come crashing home. The financial crisis shows what happens when we try to make the facts fit our desires. Now we must learn to live in the real world.
© Guardian News and Media Limited 2008
This Stock Collapse Is Petty When Compared to the Nature Crunch
The financial crisis at least affords us an opportunity to now rethink our catastrophic ecological trajectory
by George Monbiot
This is nothing. Well, nothing by comparison to what's coming. The financial crisis for which we must now pay so heavily prefigures the real collapse, when humanity bumps against its ecological limits.
As we goggle at the fluttering financial figures, a different set of numbers passes us by. On Friday, Pavan Sukhdev, the Deutsche Bank economist leading a European study on ecosystems, reported that we are losing natural capital worth between $2 trillion and $5 trillion every year as a result of deforestation alone. The losses incurred so far by the financial sector amount to between $1 trillion and $1.5 trillion. Sukhdev arrived at his figure by estimating the value of the services - such as locking up carbon and providing fresh water - that forests perform, and calculating the cost of either replacing them or living without them. The credit crunch is petty when compared to the nature crunch.
The two crises have the same cause. In both cases, those who exploit the resource have demanded impossible rates of return and invoked debts that can never be repaid. In both cases we denied the likely consequences. I used to believe that collective denial was peculiar to climate change. Now I know that it's the first response to every impending dislocation.
Gordon Brown, for instance, was as much in denial about financial realities as any toxic debt trader. In June last year, during his Mansion House speech, he boasted that 40% of the world's foreign equities are now traded here. The financial sector's success had come about, he said, partly because the government had taken "a risk-based regulatory approach". In the same hall three years before, he pledged that "in budget after budget I want us to do even more to encourage the risk takers". Can anyone, surveying this mess, now doubt the value of the precautionary principle?
Ecology and economy are both derived from the Greek word oikos - a house or dwelling. Our survival depends on the rational management of this home: the space in which life can be sustained. The rules are the same in both cases. If you extract resources at a rate beyond the level of replenishment, your stock will collapse. That's another noun which reminds us of the connection. The Oxford English Dictionary gives 69 definitions of "stock". When it means a fund or store, the word evokes the trunk - or stock - of a tree, "from which the gains are an outgrowth". Collapse occurs when you prune the tree so heavily that it dies. Ecology is the stock from which all wealth grows.
The two crises feed each other. As a result of Iceland's financial collapse, it is now contemplating joining the European Union, which means surrendering its fishing grounds to the common fisheries policy. Already the prime minister, Geir Haarde, has suggested that his countrymen concentrate on exploiting the ocean. The economic disaster will cause an ecological disaster.
Normally it's the other way around. In his book Collapse: How Societies Choose to Fail or Succeed, Jared Diamond shows how ecological crisis is often the prelude to social catatrosphe. The obvious example is Easter Island, where society disintegrated soon after the population reached its highest historical numbers, the last trees were cut down and the construction of stone monuments peaked. The island chiefs had competed to erect ever bigger statues. These required wood and rope (made from bark) for transport, and extra food for the labourers. As the trees and soils on which the islanders depended disappeared, the population crashed and the survivors turned to cannibalism. Diamond wonders what the Easter islander who cut down the last palm tree might have thought. "Like modern loggers, did he shout 'Jobs, not trees!'? Or: 'Technology will solve our problems, never fear, we'll find a substitute for wood.'? Or: 'We don't have proof that there aren't palms somewhere else on Easter ... your proposed ban on logging is premature and driven by fear-mongering'?".
Ecological collapse, Diamond shows, is as likely to be the result of economic success as of economic failure. The Maya of Central America, for instance, were among the most advanced and successful people of their time. But a combination of population growth, extravagant construction projects and poor land management wiped out between 90% and 99% of the population. The Mayan collapse was accelerated by "the competition among kings and nobles that led to a chronic emphasis on war and erecting monuments rather than on solving underlying problems". (Does any of this sound familiar?) Again, the largest monuments were erected just before the ecosystem crashed. Again, this extravagance was partly responsible for the collapse: trees were used for making plaster with which to decorate their temples. The plaster became thicker and thicker as the kings sought to outdo each other's conspicuous consumption.
Here are some of the reasons why people fail to prevent ecological collapse. Their resources appear at first to be inexhaustible; a long-term trend of depletion is concealed by short-term fluctuations; small numbers of powerful people advance their interests by damaging those of everyone else; short-term profits trump long-term survival. The same, in all cases, can be said of the collapse of financial systems. Is this how human beings are destined to behave? If we cannot act until stocks - of either kind - start sliding towards oblivion, we're knackered.
But one of the benefits of modernity is our ability to spot trends and predict results. If fish in a depleted ecosystem grow by 5% a year and the catch expands by 10% a year, the fishery will collapse. If the global economy keeps growing at 3% a year (or 1,700% a century), it too will hit the wall.
Iam not going to suggest, as some scoundrel who shares a name with me did on these pages last year, that we should welcome a recession. But the financial crisis provides us with an opportunity to rethink this trajectory; an opportunity that is not available during periods of economic success. Governments restructuring their economies should read Herman Daly's book Steady-State Economics.
As usual I haven't left enough space to discuss this, so the details will have to wait for another column. Or you can read the summary published by the Sustainable Development Commission (all references are on my website). But what Daly suggests is that nations which are already rich should replace growth - "more of the same stuff" - with development - "the same amount of better stuff". A steady-state economy has a constant stock of capital that is maintained by a rate of throughput no higher than the ecosystem can absorb. The use of resources is capped and the right to exploit them is auctioned. Poverty is addressed through the redistribution of wealth. The banks can lend only as much money as they possess.
Alternatively, we can persist in the magical thinking whose results have just come crashing home. The financial crisis shows what happens when we try to make the facts fit our desires. Now we must learn to live in the real world.
© Guardian News and Media Limited 2008
tirsdag den 14. oktober 2008
'The United States Has Essentially a One-Party System'
The linguist and public intellectual Noam Chomsky has long been a critic of American consumerism and imperialism. SPIEGEL spoke to him about the current crisis of capitalism, Barack Obama's rhetoric and the compliance of the intellectual class.
By Gabor Steingart
13/10/08 "Spiegel" --
Chomsky: The times are too difficult and the crisis too severe to indulge in schadenfreude. Looking at it in perspective, the fact that there would be a financial crisis was perfectly predictable, its general nature, if not its magnitude. Markets are always inefficient.
SPIEGEL: What exactly did you anticipate?
Chomsky: In the financial industry, as in other industries, there are risks that are left out of the calculation. If you sell me a car, we have perhaps made a good bargain for ourselves. But there are effects of this transaction on others, which we do not take into account. There is more pollution, the price of gas goes up, there is more congestion. Those are the external costs of our transaction. In the case of financial institutions, they are huge.
SPIEGEL: But isn't it the task of a bank to take risks?
Chomsky: Yes, but if it is well managed, like Goldman Sachs, it will cover its own risks and absorb its own losses. But no financial institution can manage systemic risks. Risk is therefore underpriced, and there will be more risk taken than would be prudent for the economy. With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased.
SPIEGEL: But is it correct to only put the blame on Wall Street? Doesn't Main Street, the American middle class, also live on borrowed money which may or may not be paid back?
Chomsky: The debt burden of private households is enormous. But I would not hold the individual responsible. This consumerism is based on the fact that we are a society dominated by business interests. There is massive propaganda for everyone to consume. Consumption is good for profits and consumption is good for the political establishment.
SPIEGEL: How does it benefit politicians when the populace drives a lot, eats a lot and goes shopping a lot?
Chomsky: Consumption distracts people. You cannot control your own population by force, but it can be distracted by consumption. The business press has been quite explicit about this goal.
SPIEGEL: A while ago you called America “the greatest country on earth.” How does that fit together with what you've been saying?
Chomsky: In many respects, the United States is a great country. Freedom of speech is protected more than in any other country. It is also a very free society. In America, the professor talks to the mechanic. They are in the same category.
SPIEGEL: After travelling through the United States 170 years ago, Alexis de Tocqueville reported, "the people reign over the American political world as God rules over the universe." Was he a dreamer?
Chomsky: James Madison’s position at the Constitutional Convention was that state power should be used "to protect the minority of the opulent against the majority." That is why the Senate has only a hundred members who are mostly rich and were given a great deal of power. The House of Representatives, with several hundred members, is more democratic and was given much less power. Even liberals like Walter Lippmann, one of the leading intellectuals of the 20th century, was of the opinion that in a properly functioning democracy, the intelligent minority, who should rule, have to be protected from “the trampling and the roar of the bewildered herd.” Among the conservatives, Vice President Dick Cheney just recently illustrated his understanding of democracy. He was asked why he supports a continuation of the war in Iraq when the population is strongly opposed. His answer was: “So?”
SPIEGEL: “Change” is the slogan of this year’s presidential election. Do you see any chance for an immediate, tangible change in the United States? Or, to use use Obama’s battle cry: Are you "fired up”?
Chomsky: Not in the least. The European reaction to Obama is a European delusion.
SPIEGEL: But he does say things that Europe has long been waiting for. He talks about the trans-Atlantic partnership, the priority of diplomacy and the reconciling of American society.
Chomsky: That is all rhetoric. Who cares about that? This whole election campaign deals with soaring rhetoric, hope, change, all sorts of things, but not with issues.
SPIEGEL: Do you prefer the team on the other side: the 72 year old Vietnam veteran McCain and Sarah Palin, former Alaskan beauty queen?
Chomsky: This Sarah Palin phenomenon is very curious. I think somebody watching us from Mars, they would think the country has gone insane.
SPIEGEL: Arch conservatives and religious voters seem to be thrilled.
Chomsky: One must not forget that this country was founded by religious fanatics. Since Jimmy Carter, religious fundamentalists play a major role in elections. He was the first president who made a point of exhibiting himself as a born again Christian. That sparked a little light in the minds of political campaign managers: Pretend to be a religious fanatic and you can pick up a third of the vote right away. Nobody asked whether Lyndon Johnson went to church every day. Bill Clinton is probably about as religious as I am, meaning zero, but his managers made a point of making sure that every Sunday morning he was in the Baptist church singing hymns.
SPIEGEL: Is there nothing about McCain that appeals to you?
Chomsky: In one aspect he is more honest than his opponent. He explicitly states that this election is not about issues but about personalities. The Democrats are not quite as honest even though they see it the same way.
SPIEGEL: So for you, Republicans and Democrats represent just slight variations of the same political platform?
Chomsky: Of course there are differences, but they are not fundamental. Nobody should have any illusions. The United States has essentially a one-party system and the ruling party is the business party.
SPIEGEL: You exaggerate. In almost all vital questions -- from the taxation of the rich to nuclear energy -- there are different positions. At least on the issues of war and peace, the parties differ considerably. The Republicans want to fight in Iraq until victory, even if that takes a 100 years, according to McCain. The Democrats demand a withdrawal plan.
Chomsky: Let us look at the “differences” more closely, and we recognize how limited and cynical they are. The hawks say, if we continue we can win. The doves say, it is costing us too much. But try to find an American politician who says frankly that this aggression is a crime: the issue is not whether we win or not, whether it is expensive or not. Remember the Russian invasion of Afghanistan? Did we have a debate whether the Russians can win the war or whether it is too expensive? This may have been the debate at the Kremlin, or in Pravda. But this is the kind of debate you would expect in a totalitarian society. If General Petraeus could achieve in Iraq what Putin achieved in Chechnya, he would be crowned king. The key question here is whether we apply the same standards to ourselves that we apply to others.
SPIEGEL: Who prevents intellectuals from asking and critically answering these questions? You praised the freedom of speech in the United States.
Chomsky: The intellectual world is deeply conformist. Hans Morgenthau, who was a founder of realist international relations theory, once condemned what he called “the conformist subservience to power” on the part of the intellectuals. George Orwell wrote that nationalists, who are practically the whole intellectual class of a country, not only do not disapprove of the crimes of their own state, but have the remarkable capacity not even to see them. That is correct. We talk a lot about the crimes of others. When it comes to our own crimes, we are nationalists in the Orwellian sense.
SPIEGEL: Was there not, and is there not -- in the United States and worldwide -- loud protest against the Iraq war?
Chomsky: The protest against the war in Iraq is far higher than against the war in Vietnam. When there were 4,000 American deaths in Vietnam and 150,000 troops deployed, nobody cared. When Kennedy invaded Vietnam in 1962, there was just a yawn.
SPIEGEL: To conclude, perhaps you can offer a conciliatory word about the state of the nation?
Chomsky: The American society has become more civilized, largely as a result of the activism of the 1960s. Our society, and also Europe's, became freer, more open, more democratic, and for many quite scary. This generation was condemned for that. But it had an effect.
SPIEGEL: Professor Chomsky, we thank you for this interview.
By Gabor Steingart
13/10/08 "Spiegel" --
Chomsky: The times are too difficult and the crisis too severe to indulge in schadenfreude. Looking at it in perspective, the fact that there would be a financial crisis was perfectly predictable, its general nature, if not its magnitude. Markets are always inefficient.
SPIEGEL: What exactly did you anticipate?
Chomsky: In the financial industry, as in other industries, there are risks that are left out of the calculation. If you sell me a car, we have perhaps made a good bargain for ourselves. But there are effects of this transaction on others, which we do not take into account. There is more pollution, the price of gas goes up, there is more congestion. Those are the external costs of our transaction. In the case of financial institutions, they are huge.
SPIEGEL: But isn't it the task of a bank to take risks?
Chomsky: Yes, but if it is well managed, like Goldman Sachs, it will cover its own risks and absorb its own losses. But no financial institution can manage systemic risks. Risk is therefore underpriced, and there will be more risk taken than would be prudent for the economy. With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased.
SPIEGEL: But is it correct to only put the blame on Wall Street? Doesn't Main Street, the American middle class, also live on borrowed money which may or may not be paid back?
Chomsky: The debt burden of private households is enormous. But I would not hold the individual responsible. This consumerism is based on the fact that we are a society dominated by business interests. There is massive propaganda for everyone to consume. Consumption is good for profits and consumption is good for the political establishment.
SPIEGEL: How does it benefit politicians when the populace drives a lot, eats a lot and goes shopping a lot?
Chomsky: Consumption distracts people. You cannot control your own population by force, but it can be distracted by consumption. The business press has been quite explicit about this goal.
SPIEGEL: A while ago you called America “the greatest country on earth.” How does that fit together with what you've been saying?
Chomsky: In many respects, the United States is a great country. Freedom of speech is protected more than in any other country. It is also a very free society. In America, the professor talks to the mechanic. They are in the same category.
SPIEGEL: After travelling through the United States 170 years ago, Alexis de Tocqueville reported, "the people reign over the American political world as God rules over the universe." Was he a dreamer?
Chomsky: James Madison’s position at the Constitutional Convention was that state power should be used "to protect the minority of the opulent against the majority." That is why the Senate has only a hundred members who are mostly rich and were given a great deal of power. The House of Representatives, with several hundred members, is more democratic and was given much less power. Even liberals like Walter Lippmann, one of the leading intellectuals of the 20th century, was of the opinion that in a properly functioning democracy, the intelligent minority, who should rule, have to be protected from “the trampling and the roar of the bewildered herd.” Among the conservatives, Vice President Dick Cheney just recently illustrated his understanding of democracy. He was asked why he supports a continuation of the war in Iraq when the population is strongly opposed. His answer was: “So?”
SPIEGEL: “Change” is the slogan of this year’s presidential election. Do you see any chance for an immediate, tangible change in the United States? Or, to use use Obama’s battle cry: Are you "fired up”?
Chomsky: Not in the least. The European reaction to Obama is a European delusion.
SPIEGEL: But he does say things that Europe has long been waiting for. He talks about the trans-Atlantic partnership, the priority of diplomacy and the reconciling of American society.
Chomsky: That is all rhetoric. Who cares about that? This whole election campaign deals with soaring rhetoric, hope, change, all sorts of things, but not with issues.
SPIEGEL: Do you prefer the team on the other side: the 72 year old Vietnam veteran McCain and Sarah Palin, former Alaskan beauty queen?
Chomsky: This Sarah Palin phenomenon is very curious. I think somebody watching us from Mars, they would think the country has gone insane.
SPIEGEL: Arch conservatives and religious voters seem to be thrilled.
Chomsky: One must not forget that this country was founded by religious fanatics. Since Jimmy Carter, religious fundamentalists play a major role in elections. He was the first president who made a point of exhibiting himself as a born again Christian. That sparked a little light in the minds of political campaign managers: Pretend to be a religious fanatic and you can pick up a third of the vote right away. Nobody asked whether Lyndon Johnson went to church every day. Bill Clinton is probably about as religious as I am, meaning zero, but his managers made a point of making sure that every Sunday morning he was in the Baptist church singing hymns.
SPIEGEL: Is there nothing about McCain that appeals to you?
Chomsky: In one aspect he is more honest than his opponent. He explicitly states that this election is not about issues but about personalities. The Democrats are not quite as honest even though they see it the same way.
SPIEGEL: So for you, Republicans and Democrats represent just slight variations of the same political platform?
Chomsky: Of course there are differences, but they are not fundamental. Nobody should have any illusions. The United States has essentially a one-party system and the ruling party is the business party.
SPIEGEL: You exaggerate. In almost all vital questions -- from the taxation of the rich to nuclear energy -- there are different positions. At least on the issues of war and peace, the parties differ considerably. The Republicans want to fight in Iraq until victory, even if that takes a 100 years, according to McCain. The Democrats demand a withdrawal plan.
Chomsky: Let us look at the “differences” more closely, and we recognize how limited and cynical they are. The hawks say, if we continue we can win. The doves say, it is costing us too much. But try to find an American politician who says frankly that this aggression is a crime: the issue is not whether we win or not, whether it is expensive or not. Remember the Russian invasion of Afghanistan? Did we have a debate whether the Russians can win the war or whether it is too expensive? This may have been the debate at the Kremlin, or in Pravda. But this is the kind of debate you would expect in a totalitarian society. If General Petraeus could achieve in Iraq what Putin achieved in Chechnya, he would be crowned king. The key question here is whether we apply the same standards to ourselves that we apply to others.
SPIEGEL: Who prevents intellectuals from asking and critically answering these questions? You praised the freedom of speech in the United States.
Chomsky: The intellectual world is deeply conformist. Hans Morgenthau, who was a founder of realist international relations theory, once condemned what he called “the conformist subservience to power” on the part of the intellectuals. George Orwell wrote that nationalists, who are practically the whole intellectual class of a country, not only do not disapprove of the crimes of their own state, but have the remarkable capacity not even to see them. That is correct. We talk a lot about the crimes of others. When it comes to our own crimes, we are nationalists in the Orwellian sense.
SPIEGEL: Was there not, and is there not -- in the United States and worldwide -- loud protest against the Iraq war?
Chomsky: The protest against the war in Iraq is far higher than against the war in Vietnam. When there were 4,000 American deaths in Vietnam and 150,000 troops deployed, nobody cared. When Kennedy invaded Vietnam in 1962, there was just a yawn.
SPIEGEL: To conclude, perhaps you can offer a conciliatory word about the state of the nation?
Chomsky: The American society has become more civilized, largely as a result of the activism of the 1960s. Our society, and also Europe's, became freer, more open, more democratic, and for many quite scary. This generation was condemned for that. But it had an effect.
SPIEGEL: Professor Chomsky, we thank you for this interview.
Degrowth economics: Why less should be so much more
By Serge Latouche
Last December we published an article about contraction economics - décroissance or ’degrowth’- a topic that has become a major subject of debate, not just within the counter-globalisation movement but in the wider world. The big question is: how should ’degrowth’ apply to the South?
THE logic of advertising so dominates the media that it views anything new - material, cultural or otherwise - as a product launch. And in any product launch, the key word is concept. So as discussion of décroissance (literally "degrowth", that is economic contraction or downscaling) spread, the media naturally started to ask what was the concept. We are sorry to disappoint the media, but degrowth is not a concept. There is no theory of contraction equivalent to the growth theories of economics. Degrowth is just a term created by radical critics of growth theory to free everybody from the economic correctness that prevents us from proposing alternative projects for post-development politics.
In fact degrowth is not a concrete project but a keyword. Society has been locked into thought dominated by progressivist growth economics; the tyranny of these has made imaginative thinking outside the box impossible. The idea of a contraction-based society is just a way to provoke thought about alternatives. To accuse its advocates of only wanting to see economies contract within the existing system rather than proposing an alternative to that system, and to suspect them (as do some counter-globalisation economists) of wanting to prevent the underdeveloped world from resolving its problems reflects at best ignorance and at worst bad faith.
Proponents of contraction want to create integrated, self-sufficient and materially responsible societies in both the North and the South. It might be more accurate and less alarming if we replaced the word degrowth with "non-growth". We could then start talking about "a-growthism", as in "a-theism". After all, rejecting the current economic orthodoxy means abandoning a faith system, a religion. To achieve this, we need doggedly and rigorously to deconstruct the matter of development. The term "development" has been redefined and qualified so much that it has become meaningless. Yet despite its failings, this magical concept continues to command total devotion across the political spectrum. The doctrines of "economism" (1), in which growth is the ultimate good, die hard. Even counter-globalisation economists are in a paradoxical position: they acknowledge the harm that growth has done but continue to speak of enabling Southern countries to benefit from it. In the North the furthest they are prepared to go is to advocate slowing down growth. An increasing number of anti-globalisation activists now concede that growth as we have known it is both unsustainable and harmful, socially as well as ecologically. Yet they have little confidence in degrowth as a guiding principle: the South, deprived of development, cannot be denied at least a period of growth, although it may cause problems.
The result is a stalemate where neither growth nor contraction suit. The proposed compromise of growth slowdown follows the tradition in these debates in that it lets everyone agree on a misunderstanding. Forcing our economies to grow more slowly will never deliver the benefits of a society free from constant growth (that is, being materially responsible, fully integrated and self-sufficient) but it will hurt employment, which has been the one undeniable advantage of rapid, inequitable and environmentally catastrophic expansion. To understand why the creation of a non-growth society is so necessary and so desirable for North and South, we must examine the history of the idea. The proposal for a self-sufficient and materially responsible society is not new; it is part of the tradition of development criticism. For more than 40 years an international group of commentators had analysed economic development in the South and denounced the harm it has done (2). These commentators do not just address recent capitalist or ultra-liberal development: for example, they have considered Houari Boumediene’s Algeria and Julius Nyerere’s Tanzania, which were both officially socialist, participatory, self-reliant and based on popular solidarity. And they have also noted that development has often been carried out or supported by charitable, humanist NGOs. Yet apart from a few scattered success stories, it has been an overwhelming failure. What was supposed to bring contentment to everyone in every aspect of life led only to corruption, confusion and structural adjustment plans that turned poverty into destitution.
Degrowth must apply to the South as much as to the North if there is to be any chance to stop Southern societies from rushing up the blind alley of growth economics. Where there is still time, they should aim not for development but for disentanglement - removing the obstacles that prevent them from developing differently. This does not mean a return to an idealised version of an informal economy - nothing can be expected to change in the South if the North does not adopt some form of economic contraction. As long as hungry Ethiopia and Somalia still have to export feedstuffs destined for pet animals in the North, and the meat we eat is raised on soya from the razed Amazon rainforest, our excessive consumption smothers any chance of real self-sufficiency in the South (3).
If the South is to attempt to create non-growth societies, it must rethink and re-localise. Southern countries need to escape from their economic and cultural dependence on the North and rediscover their own histories - interrupted by colonialism, development and globalisation - to establish distinct indigenous cultural identities. The cultural histories of many societies reveal inherently anti-economistic values. These need to be revived, along with rejected or forgotten products and traditional crafts and skills. Insisting on growth in the South, as though it were the only way out of the misery that growth created, can only lead to further westernisation. Development proposals are often born of genuine goodwill - we want to build schools and health clinics, set up water distribution systems, restore self-sufficiency in food - but they all share the ethnocentrism bound up with the idea of development. Ask the governments of countries what they want, or study surveys of populations duped by the media, and they do not ask for the schools and clinics that western paternalism considers fundamental needs. They want air conditioning, mobile phones, fridges and, above all, cars (Volkswagen and General Motors are planning to start producing 3m vehicles a year in China, and Peugeot is also investing heavily there). For the benefit of their governing elites, we might also add nuclear power stations, fighter jets and tanks to the wish list.
Or we could listen to the exasperated Guatemalan leader cited by Alain Gras (4): "Leave the poor alone and stop going on about development!" All the leaders of popular movements, from Vandana Shiva in India to Emmanuel Ndione in Senegal, say the same thing. Advocates of development may pontificate about the need to restore self-sufficiency in food; but the terms they use prove that there was self-sufficiency and that it has been lost. Africa was self-sufficient in food until the 1960s when the great wave of development began. Imperialism, growth economics and globalisation destroyed that self-sufficiency and make African societies more dependent by the day. Water may not have come out of a tap in the past, but most of it was drinkable until industrial waste arrived to pollute it.
Are schools and clinics really the right ways to achieve and maintain good standards of education and health? The great polemicist and social thinker Ivan Illich (1926-2002) had serious doubts about their effectiveness, even in the North (5). As the Iranian economist Majid Rahnema puts it, "What we call aid money serves only to strengthen the structures that generate poverty. Aid money never reaches those victims who, having lost their real assets, look for alternative ways of life outside the globalised system of production which are better suited to their needs" (6).
There is no prospect of just returning to the old ways - no more than there is a universal model of progress on contraction or non-growth lines. Those millions for whom development has meant only poverty and exclusion are left with a weak mixture of lost tradition and unaffordable modernity, a paradox that sums up the double challenge that they face. But we should not underestimate the strength of our social and cultural achievements: once human creativity and ingenuity have been freed from the bonds of economism and development-mania, there is every reason to believe that they can tackle the task.
Different societies have different views of the shared basic aim of a good life. If we must give it a name, it could beumran (thriving or flourishing), as used by the Arab historian and philosopher Ibn Kaldûn (1332-1406); Gandhi’s swadeshi-sarvodaya (self-sufficiency and welfare); bamtaare (shared well-being) in the language of the West African Toucouleurs; or fidnaa/gabbina (the shine of someone who is well-fed and free of all worry) in the vocabulary of Ethiopia’s Borana people (7). What really matters is that we reject continuing destruction in the name of development. The fresh and original alternatives springing up point the way towards a successful post-development society.
However, neither North nor South will overcome their addiction to growth without a collective and comprehensive detoxification programme. The growth doctrine is like a disease and a drug. As Rahnema says, Homo economicus had two strategies for taking over virgin territories: one operated like HIV, the other like a drug pusher (8). Growth economics, like HIV, destroys societies’ immune systems against social ills. And growth needs a constant supply of new markets to survive so, like a drug dealer, it deliberately creates needs and dependencies that did not exist before. The fact that the dealers in the supply chain, mainly transnational corporations, benefit so much from our addiction will make it difficult to overcome. But our ever-increasing consumption is not sustainable; sooner or later we will have to give it up.
Last December we published an article about contraction economics - décroissance or ’degrowth’- a topic that has become a major subject of debate, not just within the counter-globalisation movement but in the wider world. The big question is: how should ’degrowth’ apply to the South?
THE logic of advertising so dominates the media that it views anything new - material, cultural or otherwise - as a product launch. And in any product launch, the key word is concept. So as discussion of décroissance (literally "degrowth", that is economic contraction or downscaling) spread, the media naturally started to ask what was the concept. We are sorry to disappoint the media, but degrowth is not a concept. There is no theory of contraction equivalent to the growth theories of economics. Degrowth is just a term created by radical critics of growth theory to free everybody from the economic correctness that prevents us from proposing alternative projects for post-development politics.
In fact degrowth is not a concrete project but a keyword. Society has been locked into thought dominated by progressivist growth economics; the tyranny of these has made imaginative thinking outside the box impossible. The idea of a contraction-based society is just a way to provoke thought about alternatives. To accuse its advocates of only wanting to see economies contract within the existing system rather than proposing an alternative to that system, and to suspect them (as do some counter-globalisation economists) of wanting to prevent the underdeveloped world from resolving its problems reflects at best ignorance and at worst bad faith.
Proponents of contraction want to create integrated, self-sufficient and materially responsible societies in both the North and the South. It might be more accurate and less alarming if we replaced the word degrowth with "non-growth". We could then start talking about "a-growthism", as in "a-theism". After all, rejecting the current economic orthodoxy means abandoning a faith system, a religion. To achieve this, we need doggedly and rigorously to deconstruct the matter of development. The term "development" has been redefined and qualified so much that it has become meaningless. Yet despite its failings, this magical concept continues to command total devotion across the political spectrum. The doctrines of "economism" (1), in which growth is the ultimate good, die hard. Even counter-globalisation economists are in a paradoxical position: they acknowledge the harm that growth has done but continue to speak of enabling Southern countries to benefit from it. In the North the furthest they are prepared to go is to advocate slowing down growth. An increasing number of anti-globalisation activists now concede that growth as we have known it is both unsustainable and harmful, socially as well as ecologically. Yet they have little confidence in degrowth as a guiding principle: the South, deprived of development, cannot be denied at least a period of growth, although it may cause problems.
The result is a stalemate where neither growth nor contraction suit. The proposed compromise of growth slowdown follows the tradition in these debates in that it lets everyone agree on a misunderstanding. Forcing our economies to grow more slowly will never deliver the benefits of a society free from constant growth (that is, being materially responsible, fully integrated and self-sufficient) but it will hurt employment, which has been the one undeniable advantage of rapid, inequitable and environmentally catastrophic expansion. To understand why the creation of a non-growth society is so necessary and so desirable for North and South, we must examine the history of the idea. The proposal for a self-sufficient and materially responsible society is not new; it is part of the tradition of development criticism. For more than 40 years an international group of commentators had analysed economic development in the South and denounced the harm it has done (2). These commentators do not just address recent capitalist or ultra-liberal development: for example, they have considered Houari Boumediene’s Algeria and Julius Nyerere’s Tanzania, which were both officially socialist, participatory, self-reliant and based on popular solidarity. And they have also noted that development has often been carried out or supported by charitable, humanist NGOs. Yet apart from a few scattered success stories, it has been an overwhelming failure. What was supposed to bring contentment to everyone in every aspect of life led only to corruption, confusion and structural adjustment plans that turned poverty into destitution.
Degrowth must apply to the South as much as to the North if there is to be any chance to stop Southern societies from rushing up the blind alley of growth economics. Where there is still time, they should aim not for development but for disentanglement - removing the obstacles that prevent them from developing differently. This does not mean a return to an idealised version of an informal economy - nothing can be expected to change in the South if the North does not adopt some form of economic contraction. As long as hungry Ethiopia and Somalia still have to export feedstuffs destined for pet animals in the North, and the meat we eat is raised on soya from the razed Amazon rainforest, our excessive consumption smothers any chance of real self-sufficiency in the South (3).
If the South is to attempt to create non-growth societies, it must rethink and re-localise. Southern countries need to escape from their economic and cultural dependence on the North and rediscover their own histories - interrupted by colonialism, development and globalisation - to establish distinct indigenous cultural identities. The cultural histories of many societies reveal inherently anti-economistic values. These need to be revived, along with rejected or forgotten products and traditional crafts and skills. Insisting on growth in the South, as though it were the only way out of the misery that growth created, can only lead to further westernisation. Development proposals are often born of genuine goodwill - we want to build schools and health clinics, set up water distribution systems, restore self-sufficiency in food - but they all share the ethnocentrism bound up with the idea of development. Ask the governments of countries what they want, or study surveys of populations duped by the media, and they do not ask for the schools and clinics that western paternalism considers fundamental needs. They want air conditioning, mobile phones, fridges and, above all, cars (Volkswagen and General Motors are planning to start producing 3m vehicles a year in China, and Peugeot is also investing heavily there). For the benefit of their governing elites, we might also add nuclear power stations, fighter jets and tanks to the wish list.
Or we could listen to the exasperated Guatemalan leader cited by Alain Gras (4): "Leave the poor alone and stop going on about development!" All the leaders of popular movements, from Vandana Shiva in India to Emmanuel Ndione in Senegal, say the same thing. Advocates of development may pontificate about the need to restore self-sufficiency in food; but the terms they use prove that there was self-sufficiency and that it has been lost. Africa was self-sufficient in food until the 1960s when the great wave of development began. Imperialism, growth economics and globalisation destroyed that self-sufficiency and make African societies more dependent by the day. Water may not have come out of a tap in the past, but most of it was drinkable until industrial waste arrived to pollute it.
Are schools and clinics really the right ways to achieve and maintain good standards of education and health? The great polemicist and social thinker Ivan Illich (1926-2002) had serious doubts about their effectiveness, even in the North (5). As the Iranian economist Majid Rahnema puts it, "What we call aid money serves only to strengthen the structures that generate poverty. Aid money never reaches those victims who, having lost their real assets, look for alternative ways of life outside the globalised system of production which are better suited to their needs" (6).
There is no prospect of just returning to the old ways - no more than there is a universal model of progress on contraction or non-growth lines. Those millions for whom development has meant only poverty and exclusion are left with a weak mixture of lost tradition and unaffordable modernity, a paradox that sums up the double challenge that they face. But we should not underestimate the strength of our social and cultural achievements: once human creativity and ingenuity have been freed from the bonds of economism and development-mania, there is every reason to believe that they can tackle the task.
Different societies have different views of the shared basic aim of a good life. If we must give it a name, it could beumran (thriving or flourishing), as used by the Arab historian and philosopher Ibn Kaldûn (1332-1406); Gandhi’s swadeshi-sarvodaya (self-sufficiency and welfare); bamtaare (shared well-being) in the language of the West African Toucouleurs; or fidnaa/gabbina (the shine of someone who is well-fed and free of all worry) in the vocabulary of Ethiopia’s Borana people (7). What really matters is that we reject continuing destruction in the name of development. The fresh and original alternatives springing up point the way towards a successful post-development society.
However, neither North nor South will overcome their addiction to growth without a collective and comprehensive detoxification programme. The growth doctrine is like a disease and a drug. As Rahnema says, Homo economicus had two strategies for taking over virgin territories: one operated like HIV, the other like a drug pusher (8). Growth economics, like HIV, destroys societies’ immune systems against social ills. And growth needs a constant supply of new markets to survive so, like a drug dealer, it deliberately creates needs and dependencies that did not exist before. The fact that the dealers in the supply chain, mainly transnational corporations, benefit so much from our addiction will make it difficult to overcome. But our ever-increasing consumption is not sustainable; sooner or later we will have to give it up.
The Secret History of the American Empire The Truth About Global Corruption
John Perkins, author of Confessions of An Economic Hit Man.
Perkins zeroes in on hot spots around the world such as Venezuela, Tibet, Iraq, Israel, Vietnam and others and exposes the network of events in each of these countries that have contributed to the creation of the American Empire and international corruption in "The Secret History of the American Empire: Economic Hit Men, Jackals, and the Truth About Global Corruption"
Perkins zeroes in on hot spots around the world such as Venezuela, Tibet, Iraq, Israel, Vietnam and others and exposes the network of events in each of these countries that have contributed to the creation of the American Empire and international corruption in "The Secret History of the American Empire: Economic Hit Men, Jackals, and the Truth About Global Corruption"
Yunus: 'Capitalism Has Degenerated into a Casino'
Nobel Peace Prize laureate Muhammad Yunus says that greed has destroyed the world's financial system. SPIEGEL ONLINE spoke with him about the profit motive, social consciousness and what should be done to end the financial crisis.
10/10/08 "SPIEGEL" --
SPIEGEL ONLINE: Mr. Yunus, for years you have been preaching a more socially conscious way of doing business and have denounced the narrow focus on maximizing profit as harmful. Now, the entire financial system is wobbling ...
Yunus: The current turn of events makes me sad. It is certainly not something I am happy about. The collapse has hurt so many people and has suddenly made the entire world unstable. We should now be concentrating on making sure that such a financial crisis does not happen again.
SPIEGEL ONLINE: What should be done?
Yunus: There are huge holes in the current financial system that need to be plugged. The market is clearly not able to solve these problems itself, and now people are having to run to the governments to ask for emergency assistance. That is not a good sign because it shows that trust in the markets has evaporated. At the moment, there is unfortunately no other option than for government takeovers and government support. That is currently the method being used to combat the crisis -- a method kicked off with the $700 billion bailout package passed in the US. In Germany, the government has likewise jumped into the fray.
SPIEGEL ONLINE: Where exactly do you see the problem with such a strategy?
Yunus: The point is that we have to return as soon as possible to market mechanisms that can ameliorate the crisis and solve problems. Solutions should come out of the market and not from governments.
SPIEGEL ONLINE: But you just said yourself that the market is not capable of doing so.
Yunus: That is exactly what we need to work on. For a long time, the main priorities have been the maximization of profits and rapid growth -- but that focus has led to the current situation. Each day, we have to look to see if there is potentially harmful growth somewhere. If we find there is, then we need to react immediately. If something grows unnaturally quickly, then we have to stop it. Why don’t companies all pay into a fund that buys up securities that have become too risky? I can even imagine a business model for such a program.
SPIEGEL ONLINE: On the one hand, you say that the market has to solve the problem itself, on the other hand, though, you criticize overly quick growth. That sounds like you think that profit-oriented capitalism has failed.
Yunus: Not at all. Capitalism, with all its market mechanisms, has to survive -- there is no question. What I excoriate is that today there is only one incentive for doing business, and that is the maximization of profits. But the incentive of doing social good must be included. There need to be many more companies whose primary aim is not that of earning the highest profits possible, but that of providing the greatest benefit possible for human kind.
SPIEGEL ONLINE: And you think that those two incentives are mutually exclusive? The bank you founded, Grameen Bank -- which led to your receiving the Nobel Peace Prize in 2006 -- both helps people and earns healthy profits.
Yunus: It is a company which is focused on the social good and which makes a profit, but it is not focused on maximizing its profits. I am not interested in turning all profit-oriented companies into socially conscious operations. They are two different categories of companies -- there will always be businesses whose primary goal is that of earning as much money as possible. That is okay. But earning as much money as possible can only be a means to an end, not an end in itself. One has to invest money in something meaningful -- and I would make a case for it being something that improves the quality of life for all people.
SPIEGEL ONLINE: What, though, does an increase in the number of socially minded companies have to do with the financial crisis?
Yunus: Were there more socially minded companies, people would have more opportunities to shape their own lives. The markets would be more balanced than they are today.
SPIEGEL ONLINE: You are talking about saving the world with altruism ...
Yunus: There are many philanthropists in this world, people who help people by providing them with homes, education, etc. But that is a one-way street. The money is spent and never comes back. Were one to invest that money in a socially minded company, it would stay in the economy and would be much more effective because it would be used according to the criteria of the market and would thus develop a certain amount of market leverage.
SPIEGEL ONLINE: Who do you think is guilty for the current financial meltdown?
Yunus: The market itself with its lack of adequate regulation. Today's capitalism has degenerated into a casino. The financial markets are propelled by greed. Speculation has reached catastrophic proportions. These are all things that have to end.
SPIEGEL ONLINE: The current financial crisis began as a credit crisis -- homeowners in the US could no longer pay down their mortgages. At Grameen Bank, which provides microloans, the repayment rate is close to 100 percent. Do you think your bank could be a model for the entire finance world?
Yunus: The fundamental difference is that our business is very connected to the real economy. When we provide a loan of $200, that money will go to buy a cow somewhere. If we lend $100, someone will maybe buy some chickens. In other words, the money goes to something with concrete value. Finance and the real economy have to be connected. In the US, the financial system has completely split off from the real economy. Castles were built in the sky, and suddenly people realized that these castles don't exist at all. That was the point at which the financial system collapsed.
SPIEGEL ONLINE: Is it now time for governments to intervene in the market economy and strengthen regulation?
Yunus: There has to be regulation, but governments should not be allowed to steer the market. On the other hand, it has become clear that Adam Smith's "invisible hand" which supposedly solves all the market's problems doesn't exist. This "invisible hand" has completely disappeared in the last few days. What we are experiencing is a dramatic failure of the markets.
Interview conducted by Hasnain Kazim. Translated from the German by Charles Hawley.
10/10/08 "SPIEGEL" --
SPIEGEL ONLINE: Mr. Yunus, for years you have been preaching a more socially conscious way of doing business and have denounced the narrow focus on maximizing profit as harmful. Now, the entire financial system is wobbling ...
Yunus: The current turn of events makes me sad. It is certainly not something I am happy about. The collapse has hurt so many people and has suddenly made the entire world unstable. We should now be concentrating on making sure that such a financial crisis does not happen again.
SPIEGEL ONLINE: What should be done?
Yunus: There are huge holes in the current financial system that need to be plugged. The market is clearly not able to solve these problems itself, and now people are having to run to the governments to ask for emergency assistance. That is not a good sign because it shows that trust in the markets has evaporated. At the moment, there is unfortunately no other option than for government takeovers and government support. That is currently the method being used to combat the crisis -- a method kicked off with the $700 billion bailout package passed in the US. In Germany, the government has likewise jumped into the fray.
SPIEGEL ONLINE: Where exactly do you see the problem with such a strategy?
Yunus: The point is that we have to return as soon as possible to market mechanisms that can ameliorate the crisis and solve problems. Solutions should come out of the market and not from governments.
SPIEGEL ONLINE: But you just said yourself that the market is not capable of doing so.
Yunus: That is exactly what we need to work on. For a long time, the main priorities have been the maximization of profits and rapid growth -- but that focus has led to the current situation. Each day, we have to look to see if there is potentially harmful growth somewhere. If we find there is, then we need to react immediately. If something grows unnaturally quickly, then we have to stop it. Why don’t companies all pay into a fund that buys up securities that have become too risky? I can even imagine a business model for such a program.
SPIEGEL ONLINE: On the one hand, you say that the market has to solve the problem itself, on the other hand, though, you criticize overly quick growth. That sounds like you think that profit-oriented capitalism has failed.
Yunus: Not at all. Capitalism, with all its market mechanisms, has to survive -- there is no question. What I excoriate is that today there is only one incentive for doing business, and that is the maximization of profits. But the incentive of doing social good must be included. There need to be many more companies whose primary aim is not that of earning the highest profits possible, but that of providing the greatest benefit possible for human kind.
SPIEGEL ONLINE: And you think that those two incentives are mutually exclusive? The bank you founded, Grameen Bank -- which led to your receiving the Nobel Peace Prize in 2006 -- both helps people and earns healthy profits.
Yunus: It is a company which is focused on the social good and which makes a profit, but it is not focused on maximizing its profits. I am not interested in turning all profit-oriented companies into socially conscious operations. They are two different categories of companies -- there will always be businesses whose primary goal is that of earning as much money as possible. That is okay. But earning as much money as possible can only be a means to an end, not an end in itself. One has to invest money in something meaningful -- and I would make a case for it being something that improves the quality of life for all people.
SPIEGEL ONLINE: What, though, does an increase in the number of socially minded companies have to do with the financial crisis?
Yunus: Were there more socially minded companies, people would have more opportunities to shape their own lives. The markets would be more balanced than they are today.
SPIEGEL ONLINE: You are talking about saving the world with altruism ...
Yunus: There are many philanthropists in this world, people who help people by providing them with homes, education, etc. But that is a one-way street. The money is spent and never comes back. Were one to invest that money in a socially minded company, it would stay in the economy and would be much more effective because it would be used according to the criteria of the market and would thus develop a certain amount of market leverage.
SPIEGEL ONLINE: Who do you think is guilty for the current financial meltdown?
Yunus: The market itself with its lack of adequate regulation. Today's capitalism has degenerated into a casino. The financial markets are propelled by greed. Speculation has reached catastrophic proportions. These are all things that have to end.
SPIEGEL ONLINE: The current financial crisis began as a credit crisis -- homeowners in the US could no longer pay down their mortgages. At Grameen Bank, which provides microloans, the repayment rate is close to 100 percent. Do you think your bank could be a model for the entire finance world?
Yunus: The fundamental difference is that our business is very connected to the real economy. When we provide a loan of $200, that money will go to buy a cow somewhere. If we lend $100, someone will maybe buy some chickens. In other words, the money goes to something with concrete value. Finance and the real economy have to be connected. In the US, the financial system has completely split off from the real economy. Castles were built in the sky, and suddenly people realized that these castles don't exist at all. That was the point at which the financial system collapsed.
SPIEGEL ONLINE: Is it now time for governments to intervene in the market economy and strengthen regulation?
Yunus: There has to be regulation, but governments should not be allowed to steer the market. On the other hand, it has become clear that Adam Smith's "invisible hand" which supposedly solves all the market's problems doesn't exist. This "invisible hand" has completely disappeared in the last few days. What we are experiencing is a dramatic failure of the markets.
Interview conducted by Hasnain Kazim. Translated from the German by Charles Hawley.
Food for thought: Eat your way to a better brain
CHILDREN have a lot to contend with these days, not least a tendency for their pushy parents to force-feed them omega-3 oils at every opportunity. These are supposed to make children brainier, so they are being added to everything from bread, milk and pasta to baby formula and vitamin tablets. But omega-3 is just the tip of the nutritional iceberg; many nutrients have proven cognitive effects, and do so throughout a person’s life, not merely when he is a child.
Fernando Gómez-Pinilla, a fish-loving professor of neurosurgery and physiological science at the University of California, Los Angeles, believes that appropriate changes to a person’s diet can enhance his cognitive abilities, protect his brain from damage and counteract the effects of ageing. Dr Gómez-Pinilla has been studying the effects of food on the brain for years, and has now completed a review, just published in Nature Reviews Neuroscience, that has analysed more than 160 studies of food’s effect on the brain. Some foods, he concludes, are like pharmaceutical compounds; their effects are so profound that the mental health of entire countries may be linked to them.
Last year, for example, the Lancet published research showing that folic-acid supplements—sometimes taken by pregnant women—can help those between 50 and 70 years old ward off the cognitive decline that accompanies ageing. In a study lasting three years, Jane Durga, of Wageningen University in the Netherlands, and her colleagues found that people taking such supplements did better on measures of memory, information-processing speed and verbal fluency. That, plus evidence that folate deficiency is associated with clinical depression, suggests eating spinach, orange juice and Marmite, which are all rich in folic acid.
Another suggestion from Dr Gómez-Pinilla’s review is that people should eat more antioxidants. That idea is not new. Antioxidants are reckoned by many to protect against the general effects of ageing. Vitamin E, for example, which is found in vegetable oils, nuts and green leafy vegetables, has been linked (in mice) with the retention of memory into old age, and also with longer life.
Dr Gómez-Pinilla, however, gives the antioxidant story a particular twist. The brain, he observes, is peculiarly susceptible to oxidative damage. It consumes a lot of energy, and the reactions that release this energy also generate oxidising chemicals. Moreover, brain tissue contains a great deal of oxidisable material, particularly in the fatty membranes surrounding nerve cells.
That suggests, among other things, the value of a diet rich in berries. These have been shown to have strong antioxidant effects, though only a small number of their constituents have been evaluated in detail. One group that has been evaluated, the polyphenols, has been shown in rodents to reduce oxidative damage and to boost the ability to learn and retain memories. In particular, these chemicals affect changes in response to different types of stimulation in the hippocampus (a part of the brain that is crucial to the formation of long-term memories, and which is the region most affected by Alzheimer’s disease). Another polyphenol, curcumin, has also been shown to have protective effects. It reduces memory deficits in animals with brain damage. It may be no coincidence that in India, where a lot of curcumin is consumed (it is the substance that makes turmeric yellow), Alzheimer’s disease is rarer than elsewhere.
Peas of mind
Though the way antioxidants work in the brain is not well known, Dr Gómez-Pinilla says it is likely they protect the synaptic membranes. Synapses are the junctions between nerve cells, and their action is central to learning and memory. But they are also, he says, the most fragile parts of the brain. And many of the nutrients associated with brain function are known to affect transmission at the synapses.
An omega-3 fatty acid called docosahexaenoic acid (DHA), for example, provides membranes at synaptic regions with “fluidity”—the capacity to transport signals. It also provides “plasticity”—a synapse’s capacity to change. Such changes are the basis of memory. Since 30% of the fatty constituents of nerve-cell membranes are DHA molecules, keeping your DHA levels topped up is part of having a healthy brain. Indeed, according to the studies reviewed by Dr Gómez-Pinilla, the benefits of omega-3s include improved learning and memory, and resistance to depression and bipolar disorder, schizophrenia, dementia, attention-deficit disorder and dyslexia.
Omega-3s are found in oily fish such as salmon, as well as in walnuts and kiwi fruit, and there is a strong negative correlation between the extent to which a country consumes fish and its levels of clinical depression. On the Japanese island of Okinawa, for example, people have a strikingly low rate of mental disorder—and Okinawans are notable fish eaters, even by the standards of a piscivorous country like Japan. In contrast, many studies suggest that diets which are rich in trans- and saturated fatty acids, such as those containing a lot of deep-fried foods and butter, have bad effects on cognition. Rodents put on such diets show declines in cognitive performance within weeks.
In the past few years, several studies have looked at the effect of adding omega-3s to people’s diets—particularly those of children. One such, carried out in the British city of Durham, was controversial in that it was funded by a maker of children’s omega-3 supplements and did not include a control group being given a placebo. Despite the publicity this study has received, Ben Goldacre, author of a book called “Bad Science” that includes an investigation of it, says the results will not be released.
Work by other researchers, however, has suggested such supplements do improve the performance and behaviour of school-age children with specific diagnoses such as dyslexia, attention-deficit disorder and developmental co-ordination disorder. Moreover, although more work is needed to elucidate the effects of omega-3s on healthy school-age children, Dr Gómez-Pinilla says that younger children whose mothers took fish-oil supplements (which contain omega-3s) when they were pregnant and while they were breast-feeding do show better cognitive performance than their unsupplemented contemporaries.
Eating well, then, is one key to a healthy brain. But a word of warning—do not overeat. This puts oxidative stress on the brain and risks undoing all the good work those antioxidants have been up to. For those who would like a little practical guidance, The Economist has some suggestions for dinner (see menu). So why not put the Nintendo brain trainer away tonight, and eat your way to intelligence instead?
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