Fødevarespekulanternes hazardspil med andres liv.

I en forhåbentlig opsigtsvækkende artikel i den britiske avis The Guardian kunne man i går læse en forstyrrende artikel om hvordan fødevarespekulanter spiller hazard med fattige menneskers liv.

Just under three years ago, people in the village of Gumbi in western Malawi went unexpectedly hungry. Not like Europeans do if they miss a meal or two, but that deep, gnawing hunger that prevents sleep and dulls the senses when there has been no food for weeks.

Oddly, there had been no drought, the usual cause of malnutrition and hunger in southern Africa, and there was plenty of food in the markets. For no obvious reason the price of staple foods such as maize and rice nearly doubled in a few months. Unusually, too, there was no evidence that the local merchants were hoarding food. It was the same story in 100 other developing countries. There were food riots in more than 20 countries and governments had to ban food exports and subsidise staples heavily.

The explanation offered by the UN and food experts was that a "perfect storm" of natural and human factors had combined to hyper-inflate prices. US farmers, UN agencies said, had taken millions of acres of land out of production to grow biofuels for vehicles, oil and fertiliser prices had risen steeply, the Chinese were shifting to meat-eating from a vegetarian diet, and climate-change linked droughts were affecting major crop-growing areas. The UN said that an extra 75m people became malnourished because of the price rises.

But a new theory is emerging among traders and economists. The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are thought to be causing food prices to yo-yo and inflate. The charge against them is that by taking advantage of the deregulation of global commodity markets they are making billions from speculating on food and causing misery around the world.

As food prices soar again to beyond 2008 levels, it becomes clear that everyone is now being affected. Food prices are now rising by up to 10% a year in Britain and Europe. What is more, says the UN, prices can be expected to rise at least 40% in the next decade.

læs resten her.

The global economic crisis: An historic opportunity for transformation

An initial response from individuals, social movements and non-governmental organisations in support of a transitional programme for radical economic transformation Beijing, 15 October 2008

Preamble

Taking advantage of the opportunity of so many people from movements gathering in Beijing during the Asia-Europe People’s Forum, the Transnational Institute and Focus on the Global South convened informal nightly meetings between 13 and 15 October 2008. We took stock of the meaning of the unfolding global economic crisis and the opportunity it presents for us to put into the public domain some of the inspiring and feasible alternatives many of us have been working on for decades. This statement represents the collective outcome of our Beijing nights. We, the initial signatories, mean this to be a contribution towards efforts to formulate proposals around which our movements can organise as the basis for a radically different kind of political and economic order. Please sign on to this statement by adding your name in the comments section.


The Crisis

The global financial system is unravelling at great speed. This is happening in the midst of a multiplicity of crises in relation to food, climate and energy. It severely weakens the power of the US and the EU, and the global institutions they dominate, particularly the International Monetary Fund, the World Bank and the World Trade Organisation. Not only is the legitimacy of the neo-liberal paradigm in question, but the very future of capitalism itself.

Such is the chaos in the global financial system that Northern governments have resorted to measures progressive movements have advocated for years, such as nationalisation of banks. These moves are intended, however, as short-term stabilisation measures and once the storm clears, they are likely to return the banks to the private sector. We have a short window of opportunity to mobilise so that they are not.

The challenge and the opportunity

We are entering uncharted terrain with this conjuncture of profound crises – the fall out from the financial crisis will be severe. People are being thrown into a deep sense of insecurity; misery and hardship will increase for many poorer people everywhere. We should not cede this moment to fascist, right wing populist, xenophobic groups, who will surely try to take advantage of people’s fear and anger for reactionary ends.

Powerful movements against neo-liberalism have been built over many decades. This will grow as critical coverage of the crisis enlightens more people, who are already angry at public funds being diverted to pay for problems they are not responsible for creating, and already concerned about the ecological crisis and rising prices – especially of food and energy. The movements will grow further as recession starts to bite and economies start sinking into depression.

There is a new openness to alternatives. To capture people’s attention and support, they must be practical and immediately feasible. We have convincing alternatives that are already underway, and we have many other good ideas attempted in the past, but defeated. Our alternatives put the well-being of people and the planet at their centre. For this, democratic control over financial and economic institutions are required. This is the “red thread” connecting up the proposals presented below.

Proposals for debate, elaboration and action

Finance

* Introduce full-scale socialisation of banks, not just nationalisation of bad assets.
* Create people-based banking institutions and strengthen existing popular forms of lending based on mutuality and solidarity.
* Institutionalise full transparency within the financial system through the opening of the books to the public, to be facilitated by citizen and worker organisations.
* Introduce parliamentary and citizens’ oversight of the existing banking system
* Apply social ( including labour conditions) and environmental criteria to all lending, including for business purposes
* Prioritise lending, at minimum rates of interest, to meet social and environmental needs and to expand the already growing social economy
* Overhaul central banks in line with democratically determined social, environmental and expansionary (to counter the recession) objectives, and make them publicly accountable institutions.
* Safeguard migrant remittances to their families and introduce legislation to restrict charges and taxes on transfers

Taxation

* Close all tax havens
* End tax breaks for fossil fuel and nuclear energy companies
* Apply stringent progressive tax systems
* Introduce a global taxation system to prevent transfer pricing and tax evasion
* Introduce a levy on nationalised bank profits with which to establish citizen investment funds (see below)
* Impose stringent progressive carbon taxes on those with the biggest carbon footprints
* Adopt controls, such as Tobin taxes, on the movements of speculative capital
* Re-introduce tariffs and duties on imports of luxury goods and other goods already produced locally as a means of increasing the state’s fiscal base, as well as a means to support local production and thereby reduce carbon emissions globally

Public Spending and Investment

* Radically reduce military spending
* Redirect government spending from bailing out bankers to guaranteeing basic incomes and social security, and providing universally accessible basic social services such as housing, water, electricity, health, education, child care, and access to the internet and other public communications facilities.
* Use citizen funds (see above) to support very poor communities
* Ensure that people at risk of losing their homes due to defaults on mortgages caused by the crisis are offered renegotiated terms of payment
* Stop privatisations of public services
* Establish public enterprises under the control of parliaments, local communities and/or workers to increase employment
* Improve the performance of public enterprises through democratising management - encourage public service managers, staff, unions and consumer organisations to collaborate to this end
* Introduce participatory budgeting over public finances at all feasible levels
* Invest massively in improved energy efficiency, low carbon emitting public transport, renewable energy and environmental repair
* Control or subsidise the prices of basic commodities

International Trade and Finance

* Introduce a permanent global ban on short-selling of stock and shares
* Ban on trade in derivatives
* Ban all speculation on staple food commodities
* Cancel the debt of all developing countries – debt is mounting as the crisis causes the value of Southern currencies to fall
* Support the United Nations call to be involved in discussions about how the to resolve the crisis, which is going to have a much bigger impact on Southern economies than is currently being acknowledged
* Phase out the World Bank, International Monetary Fund, and World Trade Organisation
* Phase out the US dollar as the international reserve currency
* Establish a people’s inquiry into the mechanisms necessary for a just international monetary system.
* Ensure aid transfers do not fall as a result of the crisis
* Abolish tied aid
* Abolish neo-liberal aid conditionalities
* Phase out the paradigm of export-led development, and refocus sustainable development on production for the local and regional market
* Introduce incentives for products produced for sale closest to the local market
* Cancel all negotiations for bilateral free trade and economic partnership agreements
* Promote regional economic co-operation arrangements, such as UNASUR, the Bolivarian Alternative for the Americas (ALBA), the Trade Treaty of the Peoples and others, that encourage genuine development and an end to poverty.

Environment

* Introduce a global system of compensation for countries which do not exploit fossil fuel reserves in the global interests of limiting effects on the climate, such as Ecuador has proposed.
* Pay reparations to Southern countries for the ecological destruction wrought by the North to assist peoples of the South to deal with climate change and other environmental crises.
* Strictly implement the “precautionary principle” of the UN Declaration on the Right to Development as a condition for all developmental and environmental projects.
* End lending for projects under the Kyoto Protocol’s “Clean Development Mechanism” that are environmentally destructive, such as monoculture plantations of eucalyptus, soya and palm oil.
* Stop the development of carbon trading and other environmentally counter-productive techno-fixes, such as carbon capture and sequestration, agrofuels, nuclear power and ‘clean coal’ technology.
* Adopt strategies to radically reduce consumption in the rich countries, while promoting sustainable development in poorer countries
* Introduce democratic management of all international funding mechanisms for climate change mitigation, with strong participation from Southern countries and civil society.

Agriculture and Industry

* Phase out the pernicious paradigm of industry-led development, where the rural sector is squeezed to provide the resources necessary to support industrialisation and urbanisation
* Promote agricultural strategies aimed at achieving food security, food sovereignty and sustainable farming.
* Promote land reforms and other measures which support small holder agriculture and sustain peasant and indigenous communities
* Stop the spread of socially and environmentally destructive mono-cultural enterprises.
* Stop labour law reforms aimed at extending hours of work and making it easier for employers to fire or retrench workers
* Secure jobs through outlawing precarious low paid work
* Guarantee equal pay for equal work for women – as a basic principle and to help counter the coming recession by increasing workers’ capacity to consume.
* Protect the rights of migrant workers in the event of job losses, ensuring their safe return to and reintegration into their home countries. For those who cannot return, there should be no forced return, their security should be guaranteed, and they should be provided with employment or a basic minimum income.

Conclusion

These are all practical, common sense proposals. Some are initiatives already underway and demonstrably feasible. Their successes need to be publicised and popularised so as to inspire reproduction. Others are unlikely to be implemented on their objective merits alone. Political will is required. By implication, therefore, every proposal is a call to action.

We have written what we see as a living document to be developed and enriched by us all. Please sign on to this statement at the bottom of the page.

A future occasion to come together to work on the actions needed to make these ideas and others a reality will be the World Social Forum in Belem, Brazil at the end of January 2009.

We have the experience and the ideas - let’s meet the challenge of the present ruling disorder and keep the momentum towards an alternative rolling!!

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

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

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

'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.

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.

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"