neoliberalism | ukwatch.net

Neoliberal Offensive

Ellie Keen — Fri, 20 Jun 2008 00:00:00 +0000

European TUC general secretary John Monks urges “European legislators,” in light of the most recent outrageous ruling by the European Court of Justice, to revise the posting of workers directive to clarify and safeguard its original meaning.

If he is referring to the European Parliament, then he is barking up the wrong tree.

Legislators are representatives who initiate laws and the European Parliament does not have this power.

Its role is to revise draft legislation proposed by the unelected and unaccountable EU commission and, once a directive is finalised and issued by the commission, it is up to the European Court of Justice to rule on disputes arising from its operation.

Unlike any other court, the European Court of Justice has a mandate to remove obstacles to the operation of a free market within the EU and to promote ever-closer union within the bloc.

And it has been single-minded in doing so in its judgements handed down in response to employers’ demands to prioritise their right to make profits over trade unionists’ right to defend their living standards.

The latest scandalous rejection of workers’ rights is in response to a complaint by the EU commission against Luxembourg for insisting that national legislation on maximum and minimum working periods, minimum paid holidays, minimum rates of pay, health and safety, non-discrimination and so on should apply to posted workers is unreasonable and an additional burden on foreign service providers.

The Luxembourg case follows hot on the heels of the Laval, Viking and Rüffert cases, which undermined individual states’ protective legislation in the name of free provision of cross-border services.

The Laval case involved a Latvian construction company working on a school in the Swedish town of Vaxholm, which refused to sign a collective agreement and provoked trade union action to isolate the site.

The European Court of Justice ruled that, important though the right to take industrial action is, it is trumped by the right to trade freely.

The Rüffert case involved a Polish firm winning a contract in Germany and refusing to comply with wage rates agreed between the Lower Saxony government and the German building workers’ union.

The European Court of Justice ruling was that freedom to trade took precedence over collectively agreements.

The Viking case was about the owners of Finnish-flagged ferry Rosella deciding to register it in Estonia, thereby annulling the collective agreement with the Finnish seafarers’ union.

Once again, the European Court of Justice ruled in favour of the employer.

Even to those slow on the uptake, it must dawn that there is a pattern developing here and it is a pattern that points to a race to the bottom – acceptance of the worst pay and conditions as the norm across the EU.

This fits in with the neoliberal policies adopted across the continent and backed by all governments, whether nominally conservative or social-democratic.

It dovetails completely with the attacks on the welfare state, pensions provisions, the 35-hour week and other progressive conditions.

Overturning this employer offensive will not be won through EU institutions but by campaigns in all member states demanding non-implementation of these vicious anti-working class rulings.

In the Name of Efficiency

Ellie Keen — Mon, 09 Jun 2008 21:48:02 +0000

Under New Labour, the public services have increasingly been subject to modernisation programmes as government policy has attempted to introduce private sector practice in order to gain supposed efficiency savings. A key facilitating instrument here have been so-called “new management techniques”.

In civil service, the new management techniques have taken the form of Taylorist means of work organisation. Bespoke packages have been introduced following millions being spent on reports from management consultants. In Her Majesty’s Revenue and Customs, the Lean technique – originally derived from the Toyota car company in Japan – has been the result. It provoked a strike during its test pilot.

Alongside Lean, and as part of the same overall neoliberal vision of modernisation in the HMRC, a new regime of hotdesking has been implemented. Hotdesking is predicated on no worker having their own, particular desk in order to maximise utilisation of desks and to reduce the existence of “surplus” desks. Cost-cutting and cost-saving have been the order of the day here. This has meant civil servants in the HMRC are barred from having tea, coffee, sweets, crisps and paraphernalia like photographs of family and teddy bears on their desks because these suggest ownership and desk rigidity.

In one HRMC office in the north west of England, local management established what the workers there have labelled a “Guanteddymo Bay”. All staff’s teddy bears were removed, staff said, by “dawn raids” and “special rendition” from their desks and placed in a locked glass case so the workers can still see their teddy bears but not touch them.

The local branch of the HRMC workers’ union, the PCS, highlighted the absurdity of the situation in its recent newsletter with photographic evidence of the practice.

In another HMRC office in the north west, a worker was leaving late one night, having stayed on to finish some tax returns. Instead of showing concern for the worker being late getting home or congratulating the worker for their diligence, the manager at the office asked whether the desk that the worker had used had been cleared, adding the night shift was coming in. The worker responded: “But we don’t have a nightshift!” The manager told him: “No, but we’re twinned with another office and they do, so this means we have to do what they do.”

In another civil service office, this time a much larger one in central London and nicknamed the village, hotdesking is also used. People who work there are referred to as “village people” but others have been turned into nomads as each morning they turn up for work, they have to roam the building looking for a desk to work at. It looks like a playground of small kids where there is competition to be first in line.

Such unusual, if not bizarre, management practices highlight that the zealous search for efficiency savings has become a search at all costs. Management look for huge savings as a result of central government diktat. They are, thus, willing to pay consultants, as outside experts, huge fees to dream up new means of lean ways of working. And as we know to our cost, the chances of management consultants’ ideas working are not great.

Quite apart from the dehumanising side to the experience of these examples of work, such new ways of working easily create inefficiencies themselves. They either stop work from being done at all, or slow down the existing rate of work because of plunging morale and ill-feeling by staff.

But in an era of dogma about the superiority of market methods, this does not seem to matter. The competition for the political kudos of cutting the size and alleged waste of the public services remains king. And that is why the current government has established a risk assessment mechanism which implicitly recognises the craziness of these new works of working at the operation level.

Thus, the civil service has a monitoring practice of what is called “looking for elephant traps”. Departments and offices are asked to centrally report on any instances or phenomenon that could lead to bad publicity. With this information sent in, monitors come round to carry out a risk assessment of whether remedial action needs to be taken. In the case of Guanteddymo its removal was ordered. The fear is that bad publicity, possibly instigated by the PCS union, could lead to public pressure to row back on the government’s modernisation programme.

Food Crisis: Stop Digging!

Ellie Keen — Wed, 04 Jun 2008 22:34:44 +0000

Forget Mugabe. This week’s UN food summit in Rome has opened up a far more profound debate over the future of the global economy and our ability to feed the world’s ever-growing population. In the blue corner, the government and corporate leaders who argue that we need more trade, more markets and more globalisation. In the red corner, a growing number of people who point out that when you’re in a hole, it’s a good idea to stop digging.

Cheerleader for the blues is the British prime minister. Gordon Brown would have us believe that the best way of tackling the global food crisis is to conclude the current round of talks at the World Trade Organisation, which aim to liberalise international trade still further and open world markets to the exports of multinational corporations. According to Brown, and to other siren voices in the British press over the past week, a good dose of free-market medicine is what the world needs to bring it out of its current malaise.

Such medicine is more likely to kill the patient. It is precisely the liberalisation of agricultural markets that has exposed poor countries to the full force of the current food crisis, as their farmers have been overwhelmed by competition from cheap imports and local production systems have collapsed. Even countries such as Mexico and the Philippines, which were formerly self-sufficient in food, are now forced to buy in vast quantities to feed their own populations. To suggest that they need another free-trade deal is like tackling knife crime by handing out guns.

While local markets used to be protected from global price shocks, people now find themselves defenceless in the face of the perfect storm of factors which have forced up world prices. Free-market policies have driven millions of rural and urban workers in developing countries out of regular jobs and into the informal economy, where hunger is an ever present reality even at the best of times. As that hunger turns to desperation, food riots have erupted in 34 countries, including severe unrest in Egypt, Haiti, Bangladesh, Kenya and Somalia, to name a few.

The trade deal on offer at the WTO would exacerbate this problem by forcing open markets still further. In a plea to government ministers, UN chiefs and other officials attending this week’s food summit in Rome, an international coalition of 237 farmers’ organisations, aid agencies, food and trade specialists has published an open letter arguing that the global food crisis must not be invoked as a reason to rush through a WTO trade deal. Instead, the letter says, such a deal “will intensify the crisis by making food prices more volatile, increasing developing countries’ dependence on imports, and strengthening the power of multinational agribusiness”.

So where should we be looking for solutions? Certainly the world would welcome an end to the EU and US farm subsidies which lead to the dumping of agricultural produce on developing country markets, yet anyone who still believes that the WTO is going to deliver this has not done the maths. More importantly, agriculture needs a radical reorientation away from the mess that globalisation has made of it.

In the current crisis, the food sovereignty model that puts local producers and local markets first is winning over more and more followers. Investment in sustainable farming practices and genuine land reform would mark an important first step in that direction. But if there’s one thing that everyone is coming to see, it’s that “more of the same” is not an option.

Yes, we can

Ellie Keen — Tue, 03 Jun 2008 00:00:00 +0000

At a time when supposed “progress’ is controlled by transnational corporations, the struggle for human emancipation requires perseverance and transnational political organization to be able to control the corporations that seek to control us.

Progress is an idea invented in the 18th century, the age of the Enlightenment and of revolutions but it sometimes hard to keep the idea alive in our own time. In France, the revolutionaries overthrew the monarchy and the “natural order”—the ultimate heresy at the time. The Founding Fathers of the United States, imbued with the notion of progress, bequeathed it to generations of Americans. When it first flowered, the idea of progress was confined to the West, to what we might call the “Enlightenment Zones”; and to the relatively educated classes. Through following decades, thinkers and activists believed in human emancipation and fought for it—for the eradication of slavery, a new life for immigrants, the rights of workers, of women and minorities.

In those early days, science and technology seemed to be developing with such speed and assurance, solving so many problems and making life so much easier for millions that it was easy to believe—in 19th century Britain for example—that mankind was on the high road towards an ever-brighter horizon.

The notion of “development” embodied the 20th century version of progress. At least until the appearance of the UN’s Human Development Reports in the mid-1990s, the official “developers” like the World Bank confused economic growth with human well-being and, pushing vast programmes like the “Green Revolution”, counted on science and technology to eradicate poverty and inequality. China is still following a similar 19th century path, displaying unrivalled faith in technological progress while showing little interest in human liberation or ecological limits.

Two world wars, the Shoah, the gradually revealed horrors of colonialism, the nuclear arms race and civilian nuclear disasters all contributed in the 20th century to eroding faith in progress. Climate change, proliferating financial crises, the “oil shock”, the threat of massive famine and terrorism are playing the same role in the 21st.We seem finally to be getting it through our heads that civilisation can very well go backwards and that at this very moment we are almost certainly pushing it in that direction.

Historically speaking, only the left, only the progressive forces have ever brought about progress in the sense of human emancipation. So the question that TEMAS is asking its authors — “What would be a new idea of progress for the left in the 21st century?” is an urgent one.

Let me try to answer it first by pointing out the distinction one must make between scientific and technological advances and human progress. The two used to go hand in hand; today, however, the debate, indeed the fight concerns whether scientific developments actually constitute progress or not. Now the left must often try stop what the right labels “progress”, an inconceivable role for progressives a hundred years ago. In our day, when supposed “progress” is controlled by transnational corporations focused solely on profit and opening new markets, this is a progressive duty.

The example of Genetically Manipulated Organisms illustrates this point. Although no one has yet conclusively proved that GMOs are dangerous to human health, their harmful impact on the environment and their capacity to spread and destroy the freedom of farmers to grow organic or traditional crops is manifest. Knowing that transnational corporations control GMOs, particularly Monsanto with its heavy legacy of harmful products progressives are right to prevent the cultivation of GMOs except under strictly contained conditions.

We do not need more nuclear power but rather, as in Spain, much more investment in wind power and other alternative energies. Nor do we need new warplanes, however much these may earn for the military-industrial complex, but rather research and development of light-weight materials for building commercial aircraft in order to reduce drastically the amount of fuel they consume. As the philosopher Paul Virilio has pointed out, every technology comes with its own specific accident: the plane crash, the computer black-out with catastrophic information loss; the nuclear meltdown, various plagues due to unplanned release of manufactured organisms in nature, the oil spill or the chemical explosion—the list is long. The duty of progressives is to apply rigorously the precautionary principle and attempt to control the corporations that seek to control us. It requires perseverance and transnational political organisation to match the strategies of the corporations themselves.

The question of progress towards human emancipation is different. Here the left is obviously not called upon to prevent, but to seek and find new paths—just as all progressives who have ever lived have tried to do. All of them had to struggle against the myriad forms of oppression in the difficult circumstances of their own times, and most of them, let’s face it, lost. Spartacus did not bring about an end to slavery in ancient Rome, nor did slavery end until the 19th century. Hundreds of philosophers, proto-scientists, thinkers and innocent people were burnt at the stake before the power of the Church could be blocked. For centuries, Europe fought bloody wars resulting in untold numbers of needless deaths until a united Europe brought them to an end. Women were not recognised as fully human until less than a hundred years ago and are still trying to gain genuine equality, even in “advanced” societies. Human rights are still ignored in most places, including the west, so we do not lack for targets and 21st century “construction-sites”.

The unprecedented challenge facing progressives now is to be active on all geographical fronts. Until recently, it was quite enough to try to deal with the problems of one’s own country—decent wages, improved working conditions, proper health care, universal education, separation of Church and State and so on. Needless to say, national issues are still important. So are local ones. More and more, however, we can see that the boundaries of our lives reach well beyond our national frontiers. Europeans today must face the fact that 85 percent of the legislation governing them will come not from their national parliament but from Brussels and the EU is in the grip of the neo-liberal, business-driven economic model to the exclusion of any consideration of social progress.

The European Court of Justice has recently handed down no less than three decisions obliging Sweden, Finland and Germany to accept workforces from Eastern Europe paid up to 50 percent below the agreed wage for their own workers. These decisions are based on the “freedom to provide services”. They deliberately place European workers in direct competition with each other and organise the “race to the bottom” for wages and working conditions. In the Lisbon Treaty, the word “market” appears 63 times, “competition” 25 times, “social progress” gets three mentions and unemployment none. The Commission insists that there be no restrictions on the free movement of goods, services people and capital. How can we hope to tax international capital movements—as Attac has been proposing for years—if no “restrictions” are allowed and it is the unelected Commission or the Court that decides? Centuries of European progress can be rescinded and blotted out unless progressives can get this neo-liberal Europe under control; a task we must accomplish through trans-border organisation to match that of the European elites who are extremely well-served by present arrangements.

Internationally speaking, it is a painfully slow process to place vital subjects on the agenda, much less to get them acted upon. It took over twenty years to convince national and international decision-makers of the reality and the danger of climate change, so eager were they to listen to the corporations, especially the oil companies. Now that everyone is conscious of the threats, the leadership is once more paralysed. We know that climate refugees will be hammering on our doors in a matter of years—yet no preparations are made. We know that famine is once more stalking the world, that tens of millions of people who had emerged from lives of chronic hunger are being plunged once more into that particular hell, yet we continue to produce bio-fuels instead of food-crops and make no efforts to contain market forces that lead to mass starvation.

Progressives need to get rid of the World Bank, the International Monetary Fund and the World Trade Organisation once-for-all and replace them with international organisations genuinely responsive to the needs of the neglected three-quarters of humanity. By the time he died in 1946, John Maynard Keynes had already drawn up blueprints for such organisations—we could do far worse than to exhume and improve them to suit today’s needs.

Everywhere we see elites anxious to end the democratic progress of past centuries and to put an unelected leadership [the EU Commission…] or technocrats [the IMF, the WTO...] faithful to their interests in charge. The constant struggle of progressives to preserve democracy pits them against their adversaries trying to undermine it: the democratic deficit must be the nexus of all our future action.

Perhaps because he recognises this, Barack Obama has emerged from near-political anonymity to occupy a pre-eminent place in the collective imagination and, one hopes, soon the office of the US President. In magnificent language, he gives people the sense of their traditions and achievements. Each time they were told they were not ready, that it wasn’t worth trying, that they could never win, they replied, “Yes we can”. The authors of the Declaration of Independence , the slaves and the abolitionists, the pioneers and the immigrants, the workers and the women, the New Dealers and the astronauts—all of them replied Yes we can.

Human history, and therefore the struggle for human emancipation, is not over and we must never insult the future. Let us hope that progressives worldwide, above all Europeans, will also unite around those words: Yes we can.

This article is a contribution to the debate on “The idea of progress in the 21st Century”, to be published in Spanish in TEMAS para el Debate, June 2008.

Susan George is Board Chair of the Transnational Institute and honorary president of Attac-France. Her latest books are La Pensée enchaînée: Comment les droites laïque et religieuse se sont emparées de l’Amérique [Fayard, 2007], to be published in English as: Hijacking America: How the Religious and Secular Right Changed What Americans Think [Forthcoming, Polity Press 2008], and We the peoples of Europe [Pluto Press, 2008].

Labour's time is up

JamieSW — Tue, 27 May 2008 16:04:24 +0000

Power can shape “truth”, but not for ever. That is one lesson that could be learned from the series of electoral defeats that mark the end of New Labour’s weightless hegemony. There is something grotesque about the daily denunciations of Brown by hardcore Blairites in parliament and their media acolytes, who barely uttered a word of criticism as the country was dragged into two wars and New Labour prettified the Thatcherite social and economic agenda, now calling for the removal of Brown. As if his removal and replacement by a robotic Blairite (Miliband senior, Purnell and, amusingly enough, even Milburn is mentioned in this regard) would do the trick.

The litany of own goals scored by Gordon Brown is endless and has been well-documented. That one of these could lead, sooner rather than later, to the independence of Scotland, is ironic, but all this is beside the point. Brown was fully implicated in the New Labour project and funded its hyper-militarism. He is too weak to even mimic Zapatero in Spain and Rudd in Australia by withdrawing British troops from Iraq. Instead, one of his zombies devised the pathetic idea of Armed Forces Day to celebrate militarism and encourage school-leavers to take up killing foreigners as their main subject and graduate or die in the university of the world.

The fact is that New Labour’s time is up. When it came to power waving the Union Jack in 1997, the social landscape had already been wrecked by Thatcherism. The phallic architecture of the deregulated financial companies dominated the city, the old gents and their cozy networks were consigned to clubland. Silicon and pharmaceutical firms, funded by Japanese and American capital and immunised against a trade-union movement, neutered by the state, sprouted along the M4 corridor southwest from London and Reading.

The old textile towns were reduced to the status of cemetries; iron and steelworks had been ploughed to rubble. The old working class was dead. In the transference of class wealth and power, Thatcherism and its neocon New Labour worshippers were eminently successful. Wealth disparities had increased during the Blair/Brown years. The “modernisation” had fallen manifestly short as a solution to long-term problems of productivity and investment, leaving aside the archaic political structures of the British state. Many of the cash-starved utilities had foundered in private hands. Schools and hospitals continued to deteriorate. As railway privatisation proved a disaster, New Labour “radicals” were thinking of how the “revolution of choice” could privatise health and education.

From the start New Labour was pledged to consolidate the Thatcherite paradigm rather than offer anything different. Blair’s model was to depoliticise Labour (and the electorate) by preaching against the sin of “ideology” (ie social democracy) in the name of a new, beyond left-and-right, trendy Starbucks-style capitalism. And so it was decreed that Labour should become little more than a British version of the US Democratic Party with cheerleaders and all, though it is more remiscent of the Republicans. Domestically, Brown would aim for fiscal-surplus levels usually only demanded of the Third World, to be ameliorated by a few low-cost anti-poverty measures. Globally, New Labour would, in its own words, station itself “up the arse of the White House and stay there”. This was 10 Downing Street’s instruction in 1997 to Her Majesty’s new representative in the United States.

While all this was going on there was little opposition within the Labour Party or the major trades unions. As long as they were in power with over-sized, if unrepresentative majorities, the brothers and sisters might grumble a bit in private, but power was what really mattered.

Look at them now as they squeal in anguish at the thought that they might lose their jobs. Members of the cabinet who have helped deregulate the country will find something or the other if the economy doesn’t collapse, but for New Labour cannon-fodder the world outside the bubble offers little hope. It’s too late now. They should accept that the party’s over. Desperate squabbling to retain power at all costs without any political principle involves will not endear them to the electorate and is unrealistic in any case.

As for Gordon Brown, he may be a lame-duck prime minister, but he could still do something decent. After all, he has nothing to lose now except his job. He could withdraw British troops from Iraq and Afghanistan and, like the Irish Republic, permit a referendum on the Lisbon Treaty. Worth remembering that Blair’s massive majorities were the product not of voter enthusiasm but of a winner-takes-all electoral system, which helped to mask the collapse of the Conservatives, the country’s historic party of government. The Tory recovery is a sign of how low New Labour has fallen and marks its end.

Brown could push through two constitutional measures badly needed at home: a fully elected second chamber and proportional representation. It might help reverse a growing alienation of the young from the political process. Were he to realise that he owes the country something, he might still make the history books and as more than an accessory to war crimes.

The Soul of Man under Neo-Liberalism

Ellie Keen — Sat, 24 May 2008 15:27:20 +0000

In 2007, 27 teenagers were murdered in London, a record. 2008 is well on course to beat that: just over a third of the way through the year, 13 teenagers have been killed already, with the summer still to come. What is responsible for this upsurge? Why are children killing each other—and others – in these kind of numbers?

Looking at the press coverage of the most recent tragedies, these questions and considerations are conspicuous by their absence: there hasn’t been an avalanche of outrage in the right-wing press pointing the finger at the corrosive influence of 50 Cent or Grand Theft Auto; the most the liberal press has come up with is some remarks by Enver Soloman of the Centre for Crime and Justice Studies in the Guardian, who noted that 2% of London wards have been responsible for 10% of all violent crimes involving teenagers, and pointed out that: ‘You have to look at the social drivers. Why do young boys slip into the illegal drugs economy? It’s not a positive choice, but for some of them it seems to be the only choice. You have to use a range of policy levers to tackle this problem.’

While it is certainly true that options and life chances for working class kids are low and falling—social mobility in the UK fell markedly during the Thatcher era to levels similar to the US and significantly below the Scandinavian countries and Canada (Intergenerational Mobility in Europe and North America, April 2005 and Social mobility in Britain: low and falling, 2005)—there is one key factor that hasn’t been addressed, which is curious as it is increasingly well-documented in academia. The epidemiologist Richard Wilkinson specialises in looking at how economic inequality is related to population health. He has found that among the developed countries it is the level of equality, rather than the level of wealth, that has the greatest influence on life expectancy: more egalitarian societies have better population health than comparably wealthy societies that are less egalitarian.

Conflict or co-operation

However, it is not just health outcomes that Wilkinson has found to be related to inequality: ‘In societies where income differences between rich and poor are smaller, the statistics show not only that community life is stronger and people are much more likely to trust each other, but also that there is less violence—including substantially lower homicide rates, that health is better, life expectancy is several years longer, prison populations are smaller, birth rates among teenagers are lower, levels of educational attainment among school children tend to be higher, and lastly, there is more social mobility [emphasis added]. In all these fields, where income differences are narrower, outcomes are better,’ (The Impact of Inequality: empirical evidence, 2006). For Wilkinson, the distribution of wealth and resources is an indicator of how either conflictual or co-operative a society is: ‘Because more unequal places are marked by a more conflictual character of social relationships—so that they suffer not only more homicide, but also more violent crime, less trust, less involvement in community life, and more racist—we should see them all as part of a single continuum affecting the nature of social relations throughout a society. Inequality seems to shift the whole distribution of social relationships away from the most affectionate end toward the more conflictual end’[1].

The relevance of this to the present is obvious: for most of the twentieth century the trend in this country was toward increasing equality, but from the late 1970s—with the triumph of neo-liberalism—inequality began to increase, a process which continues to this day (Poverty and inequality in the UK: 2007, p19). The distribution of wealth has become increasingly polarised, and with it our society has moved ‘away from the most affectionate end toward the more conflictual end’. Or as the LSE criminologist Robert Reiner has summarised it: ‘Economic laissez-faire engendered moral laissez-faire. There is copious evidence demonstrating that inequality produces crime and violence. This is not primarily because of social exclusion or poverty. It is relative deprivation that counts most. Contrary to Blair’s many quips on the topic, the rich are a major part of the problem,’ (‘Be tough on a crucial cause of crime – neoliberalism’, The Guardian, 24 November 2005).

One of Thatcher’s most famous mantras was that ‘there is no such thing as society, only individuals and families’ (Margaret Thatcher Foundation). Thatcherism was, rhetorically at least, supposed to liberate the individual from the overbearing strictures of the state and collectivism, freeing the sovereign individual to pursue his or her interests, like every other sovereign individual, on the level, meritocratic playing field of the free market. Utter nonsense: it is a picture of the world which pretends the distinction between labour and capital doesn’t exist; it pretends that the equality of opportunity does exist; and it pretends that ‘the free market’ has ever really existed to any significant degree, while the truth is that practically every industrialised economy on Earth got there through state protection of infant industry. And this goes through to the present day, where biotechnology and the Internet only exist thanks to state stewardship. Even the chief economics commentator of the Financial Times, Martin Wolf, has recently conceded: Remember Friday March 14 2008: it was the day the dream of global free-market capitalism died. For three decades we have moved towards market-driven financial systems. By its decision to rescue Bear Stearns, the Federal Reserve, the institution responsible for monetary policy in the US, chief protagonist of free-market capitalism, declared this era over. It showed in deeds its agreement with the remark by Joseph Ackermann, chief executive of Deutsche Bank, that “I no longer believe in the market’s self-healing power”. Deregulation has reached its limits,’ (‘The rescue of Bear Stearns marks liberailsation’s limit’, Financial Times, 25 March 2008). The freedom and individualism of Thatcherism, like the free market, is an illusion. In reality, labour has been atomised, but capital has not: it is still as collective as ever, as assisted by the state as ever, and more heavily concentrated and more dominant over the individual than ever. The idea of attaining democratic, co-operative control over capital and ending coercive wage labour has gone: the individualism of our time extends no further than the egocentric satisfaction of selfish, largely created, consumer wants.

‘Economics are the method; the object is to change the heart and soul’

The sociologists Anthony Elliott and Charles Lemert have written about what they call ‘the new individualism’. It is worth quoting them at length: ‘individualism today is intrinsically connected, we argue, with the growth of privatized worlds. Such privatized worlds propel individuals into shutting others and the wider world out of their emotional lives (…) As market forces penetrate ever more deeply into the tissue of social life, what we see taking place today is a shift from a politicized culture to a privatized culture. People, increasingly, seek personal solutions to social problems in the hope of shutting out the risks, terrors and persecutions that dominate our lives in the global age (…). The classically free individual as the man who removes himself from the masses is necessarily a way of life possible only to people of means, to those able to attain and maintain a bourgeois life (…). Privatization (…) concerns the spread of neo-liberal economic doctrines into the tissue of our social practice itself. This process expands market deregulation into personal and intimate life, producing in turn isolating, deadening, calculating forms of life (…). What we are suggesting is that people today increasingly suffer from an emotionally pathologizing version of neo-liberalism (…) the individual self—in extending its imperial sway over the social environment—liquidates the solidity and substance of the world into a privatized terrain of needs and desires (…). “Privatized” could here be roughly translated as the imperative: “Don’t rely on anyone for long, and avoid support or help from others, as survival depends on going it alone, constantly changing partners and networks, and always looking out for Number One”. Fear of dependence, in turn, places a further strain on the intrinsically lonely parameters of privatized life, as individuals head off manically in search of all sorts of illusory substitutes to fill in for what is missing in their private and public lives”’[2].

This ‘emotionally pathologizing version of neo-liberalism’ isolates the individual and sets all against all. It recalls the homo economicus of neo-classical free-market economics, and its counterpart, public choice political theory: the purely selfish model individual whose only drive is the maximisation of personal utility. Neo-classical economics claims to be the modern day descendant of the work of Adam Smith, but Smith’s view of human nature was fundamentally different: where homo economicus is motivated solely by rational self-interest, Smith saw human nature as being comprised of two drives, namely self love and sympathy for others. Smith recognised the human need for community, solidarity, co-operation, trust and togetherness, a need that neo-liberalism denies at the philosophical level. One reason behind the resurgence of religion and ethnic/nationalist politics is that they do offer something beyond the illusory and isolating individualism of our time. There is such a thing as society—if a bank needs assistance from the state, it gets it—but neo-liberalism is increasingly turning it into a society of sociopaths, a society of Patrick Batemans where surface is everything and other people are merely means, not ends.

Margaret Thatcher memorably said in 1981: ‘What’s irritated me about the whole direction of politics in the last 30 years is that it’s always been towards the collectivist society. People have forgotten about the personal society. And they say: do I count, do I matter? To which the short answer is, yes. And therefore, it isn’t that I set out on economic policies; it’s that I set out really to change the approach, and changing the economics is the means of changing that approach. If you change the approach you really are after the heart and soul of the nation. Economics are the method; the object is to change the heart and soul [emphasis added]’ (). And of course, she succeeded. The young—the age group currently killing each other, and adults, in record numbers, usually over nothing—have never known anything else other than this ‘emotionally pathologizing version of neo-liberalism’. We see the effect of ‘changing the heart and soul’ every time a teenager kills or is killed.

[1] Richard Wilkinson (2005), The Impact of Inequality (London: Routledge), p55-6

[2] Anthony Elliott and Charles Lemert (2006), The New Individualism: the emotional costs of globalization (London: Routledge), p9, 10, 40, 41

Corporate cherry-picking isn't delivering the goods

JamieSW — Thu, 22 May 2008 23:09:26 +0000

As New Labour heads for humiliation in the Crewe byelection today, those who want to find a way out of the wreckage need to face up to the lessons of its ideological bankruptcy fast. For more than a decade, Tony Blair and, puffing slightly to keep up, Gordon Brown have always insisted that the only test for their policies is “what works”. That has been the theme tune of their ever more enthusiastic embrace of public service privatisation and commercialisation. Not for them the pickled nostrums of the past: if the corporate world could deliver the goods, it had to be given the freest of reins.

The farce of their claims couldn’t have been more clearly demonstrated than in the liberalisation and creeping privatisation of Britain’s postal service. Far from “working” or delivering the goods, the corporate-skewed opening up of the market is progressively destroying a publicly owned network at the heart of Britain’s social and business life. When New Labour came to power, the Post Office was an effective public monopoly handing over more than £100m profit a year to the public purse. Public and political support saw off successive attempts by the Tories and, more tentatively, Tony Blair to privatise what had become Royal Mail.

But eight years after New Labour began exposing the network to private competition and two years after Royal Mail’s 350-year-old monopoly was finally abandoned, the postal service is in crisis and the universal service which guarantees delivery of mail anywhere in the country at a single price is in peril. A devastating independent review for the government this month found that liberalisation had only benefited big business, brought “no significant benefits” to consumers or small businesses, and created a “substantial threat” both to the future of Royal Mail and the universal service.

Of course, few people needed to be told that the service was deteriorating, when the last five years have seen an end to Sunday collections and fewer and later daily deliveries. But the response of the postal regulator Postcomm, whose ideological passion for markets and unchained competition has been central to this sorry saga, was to demand an intensification of the private treatment: far from stepping back, it last week insisted that part-privatisation of Royal Mail was the only way to prevent a further decline in the service, including an end to Saturday deliveries.

Naturally, Royal Mail’s executives like the idea, from which they would stand to benefit richly. But it’s hard to see how it would help protect the unprofitable parts of the universal service or the threatened network of post offices on which it depends. What has really tipped Royal Mail over the edge are Postcomm’s rigged rules for access to Royal Mail deliveries, which have levered corporate operators into the most profitable parts of the business – they now handle 40% of the profitable bulk mail which previously underwrote remote deliveries – and turned an operating profit of £233m in 2006-7 into a £279m loss this year.

Of course, the growth of the internet and years of under-investment in mechanisation have also had an impact – though online transactions also generate mail. But it is this deliberately engineered leaching off the public sector which has been the decisive factor in delivering a worse service to most users and lower pay and conditions to those employed by the corporate cherry-pickers. Meanwhile the government’s continued drive to close thousands of unprofitable post offices, shutting off social lifelines for some of the country’s most vulnerable people, has directly fuelled the public rejection of New Labour which now appears to have passed the point of no return.

When one Labour rebel recently challenged Brown about the impact of postal liberalisation, the prime minister blamed the European Union. It’s true that EU directives require the opening up of postal and other public services to competition – and those neoliberal catechisms are now locked into the Lisbon treaty, due to face its first popular test in the Irish referendum next month. But Britain, ever more royal than the king, has gone much further, much faster than required to do by Brussels, and has failed to use the protective measures available to keep its “dominant provider” afloat.

Not that there’s much hope of either of the other two main parties taking a more sensible approach. David Cameron’s Tories may have opposed post office closures, but they have carefully avoided committing themselves even to the current level of government financial support and can be safely relied on to head off further down the privatisation and liberalisation path, while the Liberal Democrats now want to part-privatise Royal Mail to raise cash.

What’s needed instead is the debunking of the privatising dogma that has created this crisis, a halt to preferential pricing for private predators, a universal service charge for market entrants, and a broadening of Postcomm’s remit. At the same time there is a huge untapped potential to turn local post offices into far more viable hubs by, for example, making them centres of access to public services and reintroducing public banking facilities.

But then the gutting of the postal service isn’t the only part of the government’s corporate-driven market agenda that isn’t working. As Allan Asher, chief executive of Energywatch, told parliament this week, competition in the privatised energy market is a myth, and British gas and electricity consumers are being fleeced by the “tacit collusion” of a “comfortable oligopoly”.

There is clearly going to have to be a more far-reaching change of course. Tuesday’s compromise agreement between the government, CBI and TUC to give exploited contract and agency workers the same basic rights as permanent staff after 12 weeks is certainly a significant move in the right direction and was greeted with squeals of rage by business lobbyists. But there was also disappointment among Labour MPs and trade unionists: once again, Britain has signed up to less worker protection than most EU states wanted and is now likely to be able to continue opting out of long hours regulation as a result of the deal. It may be too late to avoid defeat, but if Labour is to reverse its haemorrhage of support and lay the ground for a better future, it will have to take more than these faltering steps.

Europe Deserves Much Better than the Lisbon Treaty

Ellie Keen — Fri, 16 May 2008 20:18:25 +0000

European history provides a showcase of human beings at their worst. Constant conflict, the two bloodiest wars ever waged, famine, brutal industrialisation, oppression of workers and women, religious strife, colonialism, fascism, communism – all these stain our past. But Europe also represents the best humankind has accomplished, giving the world the Renaissance, the Enlightenment, a constant struggle for emancipation, democracy and the separation of powers, the welfare state – not to mention universally recognised cultural contributions from Greek drama to Finnegans Wake , from the symphony orchestra to Irish folksong.

Born in the United States and a citizen of France, I am a fervent European. At this point in history, I believe only Europe can provide all its citizens with democratic government, dignified living standards, greater social equality, public services, universal healthcare and education. This small continent, with just 15 per cent of the world’s people, can lead the way towards ecological sanity and a liveable planet and prove nations can overcome even the most tenacious hatreds and live together in peace. Europe can be a counter-model to the myriad brutalities, affinity for war and stupendous inequalities on display elsewhere.

For these and other reasons, I voted no to the deeply flawed, undemocratic European constitution in May 2005. Had the French government not confiscated the people’s right to another referendum, I would have voted no again to the Lisbon (“Reform”) Treaty – a clone of the rejected constitution, except for “cosmetic changes” making it “easier to swallow”, as Valéry Giscard d’Estaing, principal author of the constitution, said. No flag, no Beethoven hymn, but the rest is there as Angela Merkel, José Manuel Barroso, Bertie Ahern and other relieved European notables all agreed.

The treaty contains no substantive changes. It’s just much harder to understand, worse even than the immensely complex constitution. Now we must deal with two European treaties (Rome, 1957, and Maastricht, 1992, with their subsequent revisions) to which Lisbon adds 145 pages of amendments plus 132 more pages of 12 protocols and 51 declarations, all legally binding, all superseding every law of the 27 member states.

There is no single text – you must cut, paste and collate the hundreds of pages for yourself. The very least one should require of a treaty that will dictate at least 80 per cent of all future legislation throughout Europe is that it be comprehensible. But complexity can be an effective weapon against democracy. Let us recall what commission vice-president Gunter Verheugen said after the French and Dutch No votes: “We must not give in to blackmail.” So much for universal suffrage and popular sovereignty.

There are a few beneficial changes to the defunct constitution. The new treaty gives the European Parliament, the only elected body, marginally more power to co-decide on legislation, although it still cannot initiate legislation.

However, the unelected European Commission remains all-powerful, particularly in crucial areas such as trade. A new article specifies the European goal of “integration of all countries into the world economy through the suppression of barriers to international trade”. Already trade commissioner Peter Mandelson is pushing for European corporate penetration in even the poorest countries, defining “barriers” as any government measure regulating foreign investment, public procurement, environmental or consumer protection.

The European Central Bank gets an even more iron-clad statute of independence from political supervision; its mandate remains control of inflation with no mention of full employment. The “market” (63 mentions in the text) remains the supreme good and “competition” (25 mentions) the overarching rule. Public services are specifically subjected to competition: government subsidies or other forms of support will become more precarious. European-wide social policies will require unanimous approval – this is a euphemism for a race to the bottom. The Charter of Fundamental Rights is inferior to most existing European constitutions.

Common security and defence policy places Europe firmly under the tutelage of Nato “which remains the foundation of the collective defence of its members”. We are signing on blindfolded for whatever Nato’s future policies may be – we only know for sure the US will remain in command. The treaty also obliges members to “progressively increase their military capacities”.

This Lisbon Treaty is a model of failed neo-liberal economic nostrums and misplaced confidence in the market and competition as universal panaceas. Europeans deserve better, beginning with an elected convention for drafting a constitution, time for full debate and a popular ratification process.

Europe has now surpassed the US as the wealthiest political entity. We can afford to retain and perfect the European social model, provide a decent livelihood for all and undertake a swift conversion to an ecological economy; we can afford to embody the ideal of the common good. Not to demand all this and more is a betrayal of whatever is best in our history. This may be Europe’s last chance.

Susan George is a Fellow and Chair of the Board of the Transnational Institute. Her latest books are La Pensée enchaînée: Comment les droites laïque et religieuse se sont emparées de l’Amérique [Fayard, 2007], to be published in English as: Hijacking America: How the Religious and Secular Right Changed What Americans Think [Forthcoming, Polity Press 2008], and We the peoples of Europe [Pluto Press, 2008].

European Union Policies and Migratory Pressures

Ellie Keen — Wed, 07 May 2008 22:25:21 +0000

In early October, the Research Directorate of the European Commission asked me to attend and make a brief presentation at an Expert Workshop entitled “Responding to Global Challenges: The Role of Europe and of International Science and Technology Cooperation”. I was careful to explain that I had fought against the Constitutional Treaty in France and written a book highly critical of the present positions of the European Commission. They said they knew that, repeated the invitation and left the subject up to me, so I went.

It seemed to me the most useful contribution I could make would be a proposal that Europe consider the impact of its own policies when examining the phenomenon of mass migration, rather than continuing to treat it entirely as a police-security issue. On the strength of my brief presentation, I was invited to sign up as an “expert” and, along with many of the other workshop participants, to expand my proposal. I am extremely grateful for this opportunity and want to thank the people involved, particularly Virginia Vittorino and Sophie Thoyer. Sophie is preparing a publication from the various contributions but I’ve been very kindly authorised to put my contribution on my site prior to publication.

As the relevant agencies of the United Nations never fail to remind us, we live in an age of vast population movements. Millions of people are making the one-way transition from countryside to city, with the result that more than half the world now lives in an urban environment. Not infrequently, in countries like China, entire villages may be obliterated by mammoth “development” schemes and the inhabitants are relocated, usually under worse conditions. Millions more have been forcibly displaced by various types of armed violence within their own countries and are known as “internal refugees”. Finally comes the group that has already accomplished the rural-urban transition, sometimes thanks to the previous generation, and which, for reasons which remain to be fully explained, are desperate to migrate to foreign countries that they see as promised lands. These candidates for departure almost always seek to enter the wealthy OECD countries. Mexicans and Central Americans head for the United States; North Africans and Sub-Saharan Africans, as well as Eastern Europeans and Central Asians, attempt to cross the borders of the European Union.

I. Defence and illustration of the hypothesis

The brief analysis and research proposal that follow will be confined to the EU but the observations made could as well apply to North America or Australia. Within Europe, responses to increasing migratory pressures have varied from country to country but initially at least, they all treat migration as a security problem, to be dealt with primarily by the police, the coast guard, the prison or retention-centre system and, in extreme cases, the army or the navy.

The common characteristic of their various security approaches is, however, that they have not worked. This, at least, is the case if the definition of measures that “work” are those that reduce or stop the phenomenon of migration, or limit it to well-educated individuals the receiving country is happy to accept. Present approaches have clearly not stemmed, much less prevented the flows of people entering Europe in a variety of more or less clandestine circumstances. To the contrary, they are arriving in greater and greater numbers, often under appalling conditions. More and more deaths in transit are reported yet still they make the attempt. Many more “hidden” immigrants are simply people who arrived on a tourist visa and never left.

Let us ask an apparently simple question: Is out-migration from “South” to “North” on such a scale a “normal” phenomenon? Young people especially want to travel, but few, given the choice, would choose permanently to leave their countries, familiar landscapes, food, childhoods, families, friends, memories, languages….without serious motives. They would especially not risk their lives and gamble their futures in order to cross the borders or reach the shores of Europe, only to be confronted—in case of success—with the life of a marginal “sans papiers”, a paperless person: menial, ill-paid jobs, precarious living conditions, crowded sub-standard housing, no civil rights, possible imprisonment and deportation, racism, xenophobia….

Should we not therefore accept at least the hypothesis that mass migration is not “normal”; that migration candidates would, more often than not, avoid it if they had other options; that the “push factors” causing people to leave their home countries in such numbers require much closer examination than they have so far received? Among such factors should we not also accept the hypothesis that, in the case of Europe [as would be the case for other OECD countries], its own policies may have more than a little to do with out-migration?

Even a quick survey of the literature on migration shows a surprising absence of any such hypothesis. Within my time constraints and in the interests of efficiency, I did not attempt an exhaustive search; I did, however look at the work done by the United Nations University World Institute for Development Economics Research [UNU-WIDER] which has organised various conferences and produced many discussion papers and publications on the issue of migration (1). Other sources examined include the publications of the Centre on Migration, Policy and Society [COMPAS] at Oxford University (2) and the twenty years-worth of articles published by the REMI—Revue Européenne des Migrations Internationales (3).

None seem even to have considered the idea that European policies might create or reinforce pressures in North African and Sub-Saharan societies to migrate. This also seems true for the impact of United States policies on its southern neighbours, judging by twenty years worth of output by the Center for Immigration Studies in Washington which describes itself as the “only think tank devoted exclusively to research and policy and ….impacts on the United States [of migration]” (4).

On one hand we are confronted with the evidence of increasingly desperate people willing to undertake harrowing, dangerous, long-distance journeys—journeys often requiring the life-savings of entire families and sometimes ending in death. On the other hand, virtually all the literature stresses that migration to Europe is caused by “poverty” or “socio-economic deterioration of the situation” at home; or “the growing gap” between North and South. These are the handy, catch-all explanations.

More sophisticated analyses may point also to the lack of security in countries torn by civil strife; improved communications and information systems that give an unrealistic picture of life in the rich countries; social solidarity networks established by and with previous immigrants; the fairly recent emergence of an entire industry of commercial, usually criminal, people-trafficking enterprises devoted to recruiting and smuggling migrants across international borders and so on. Those analyses that invoke “poverty”, “deterioration” and “gaps” do not seem to consider it their business to ask why these should exist on such a vast scale.

Two possible conclusions may be drawn from these remarks. Either [1] European economic/trade policies are universally beneficial to the southern “sending” countries and therefore contribute nothing to migratory pressures or [2] the supposedly benign nature of European policies vis à vis sending countries is the unspoken, quasi-universal assumption of governments, research institutes and academics. Thus the question of possible negative impacts does not even arise. If, however, EU policies are universally beneficial, as in alternative conclusion [1], we ought to be able to find proof to back up that claim—proof that would also be “falsifiable” in Karl Popper’s sense. If, on the other hand, this is an unspoken but unexamined assumption as in alternative conclusion [2], links between European policies and out-migration pressures might be shown to exist but have never been seriously looked for. In either case, but particularly in the second, it would seem that we face a research gap of quite staggering proportions.

Obviously one does not want to fall into the trap of the “mono-causal explanation” for any phenomenon, but in the case of such a major policy preoccupation for European governments and citizens as migration, surely it is worth examining seriously the impact of EU policies on population movements. Surely experience so far shows that the security-police approach is at best partial; at worst a failure and that root causes have not necessarily been identified, much less taken into consideration and dealt with.

European decision-makers of all political persuasions recognise that migratory flows from South to North constitute a problem area. These decision-makers should welcome more precise knowledge and assessment of the impact of European policies, not merely on Southern governments, but also on the lives of communities and the vast majority of Southern populations that constitute the human pool from which migration springs.

The overarching goal of European policy towards the sending countries should be that of the Hippocratic oath: “First, do no harm”. A courageous research programme has the duty to assess such harm, if it exists, and if so, to devise means to eliminate it and replace it with positive approaches. Nothing could improve the stature of the European Union with its Southern partners more than this. It is true that Europe, like any other political entity, has many constituencies to satisfy as well as many economic and political interests and cannot be expected to abandon them. Some of these constituencies and interests may, however, be quite limited in importance and of short-term value only. They could and should be replaced by the approach once known as “enlightened self-interest” which deserves a revival.

What might be the elements of such a research programme? Here follows a non-limitative “catalogue” approach. North-South research teams would be needed to deal with them. I wish to state at the outset that my own biases will be evident in some of the suggestions put forward for research work. I do not believe in “objectivity” in the social sciences and I have done too much work over past decades concerning the impact of certain Northern policies on Southern societies to put forward proposals for the EU with a “neutral” attitude.

This being clear, the key areas of European policies to examine concern debt and structural adjustment, trade [particularly with regard to food and agricultural goods] as well as tariff structures; subsidies, commodity prices; fisheries, the impact of European transnational corporations; Economic Partnership Agreements [EPAs].

On the side of the migrant-sending country governments, one should also consider incentives not to cooperate with the EU and even to encourage migration either overtly or tacitly. Southern governments know very well that remittances sent home by migrants constitute a substantial component of their revenues and that they relieve the poverty of a great many of their citizens and villages. For several countries, emigrants already represent their most valuable export. Governments know too that the “export of people” mitigates their own severe unemployment problems. For these governments, it can only be an advantage to have in particular fewer discontented, unoccupied young men around to cause trouble. These governments are only too happy for these people to be outside, not at home.

In addition to these present North-South aspects, particularly those linking the EU and North/Sub-Saharan Africa, one should also study and plan for the longer term impacts of climate change. We already know that drought-prone areas are set to become even drier and water-stressed populations will necessarily increase. In the same way, already humid areas are likely to experience more rainfall and floods. The rise of coastal waters will also create untold numbers of climate refugees seeking relief at any cost and severe weather events are slated to increase, with all their attendant dislocations.

II. European policies with possible or likely immigration-inducing impacts

1. Debt

Despite modest reductions, outflows from South to North remain a heavy burden on Southern countries and hamper their development. Research must quantify this burden and assess the current value—including monetary and non-monetary value—of reimbursement to individual EU countries and to the EU as a whole. What is the level of funds “sterilised” by debt repayments and therefore unavailable for development? What are the real impacts of debt-induced structural adjustment packages, particularly the privatisation of public services and export-orientation, particularly of agriculture? The debt “crisis” is in fact a chronic illness and ideally the EU should, with the help of research, devise a quick, clean, democratic, non-bureaucratic, corruption-free, “once-for-all” plan that can put an end to a problem that has festered for easily a quarter century.

Debt was accumulated for a variety of reasons; the borrowed money came from both public and private sources but in the case of Sub-Saharan Africa, they were overwhelmingly public. Loans to oppressive regimes have been estimated at about $500 billion worldwide [including $22 billion to apartheid South Africa]. One would need to examine the “odious debt” aspects [jurisprudence since the 1920s distinguishes legitimate from “odious” debt, the latter going to dictators either with no benefit to the population or serving to oppress that population further]; but the recommendation here would be for cancellation of all types of debt (5).

Loans on the books to Low Income Countries [LICs], amounted in 2004-2005 to about $523 billion worldwide. Africa’s external debt, including that of North Africa, had by 2004 reached $300 billion with $227 billion for Sub-Saharan Africa alone. These sums are quite small by international standards but insuperable for Africa: in 2004, Sub-Saharan Africa was paying back $28.000 a minute [$15 billion a year] in debt service, according to World Bank-OECD figures. All the LICs taken together were then paying back $100 million a day/ nearly $70.000 a minute.

As of July 2005 at the time of the Gleneagles G-8 Summit, 28 countries had been assured of $56 billion in debt relief and 18 very poor countries, including 14 in Africa, were promised total cancellation. In such severely indebted countries, the Millennium Development Goals [MDGs] will take 100 years to achieve on current trend lines. Civil society campaigns like that of Jubilee 2000 have led to pressure on the creditor governments, yet relief promised has always been very slow to translate into reality because the target countries are obliged to undertake further periods of structural adjustment before cancellations take effect. At least 65 countries have been estimated to need complete debt cancellation in order to have even a chance of meeting the MDG targets. This would cost the creditors about $80 billion/year. G-8 and other meetings tend to make spectacular announcements which turn out on closer examination to be misleading or remain unimplemented (6).

Intimately linked to the debt crisis is the enormous burden that capital flight from Africa has imposed on this poorest continent. Recent work by Léonce Ndikumana and James K. Boyce of the University of Massachusetts reaches the conclusion that Africa’s wealthy have, during the period from 1970 to 2004, exported a total of $420 billion, nearly double the total debt burden of Sub-Saharan Africa in 2004, which in 2004 was $227 billion. Most of this money was not acquired legally. With the interest this capital could have accumulated over the 35 year period, the authors estimate the total loss to Africa at $607 billion. How complicit were European banks—and how lax might European governments have been—in allowing or encouraging this chronic drain? (7)

2. Structural adjustment

Beyond assessing the amounts presently owed, research should summarise the vast literature on the impact of structural adjustment policies accompanying debt, put in place by the World Bank and the International Monetary Fund, working in close cooperation with the United States Treasury. The elements of structural adjustment [also known as “Washington Consensus”] policies have been frequently and exhaustively studied; dozens if not hundreds of case studies exist on the impacts of high interest rates, export orientation and market liberalisation, privatisation; ‘cost-recovery’ [fee-paying] including fees for schools and health care—particularly detrimental to women and girls—and so on. These policies have caused increased hunger and deprivation, smaller numbers of children in school, chronic unemployment and hardship; millions have had to fall back on the informal sector (8). Although local populations benefitted little or not at all from the borrowed money, most of which went to the middle and upper consuming classes, “white elephant” projects, arms purchases or private accounts abroad; these populations have been obliged to pay it back with their sacrifices.

We already know that debt cancellation is affordable. Research would need to examine the amounts owed to specific EU countries and the total amount over which Europe could have an influence [including sums still owed to the World Bank and the International Monetary Fund]. The sources for such work exist: the World Bank, the OECD and the London Club and the Paris Club are the main ones—although this researcher has found the Paris Club to be singularly uncooperative, indeed contemptuous of external requests for information. A mandate from the EU would undoubtedly be required to gain access to its data.

As for the Bank and the Fund, the IMF could continue to sell its gold without upsetting markets—indeed it would help to calm the sky-rocketing prices for the precious metal. As for the Bank, even if it were to write off all the debt owed to it by all the LDCs, it would simply return to its capital levels of 1997, when it was flourishing. The Bank has 400 percent more capital than it needs to keep the triple AAA rating for its bonds [all three of the best-known rating agencies rated its bonds AAA in 1997]. In addition, for the past 15 years, the Bank has made over a billion dollars a year in profits. European voting shares in the Fund/Bank amount to 16 percent for Germany, France and Britain alone, plus another 14 percent if one counts the groups presided by Belgium, Netherland and Italy. Surely 30 percent of the voting stock gives the EU enough influence in these International Financial Institutions to push for complete cancellation for North/Southern African debtors, based on solid research of the improvements that could be expected in these countries once freed from debt bondage.

Many argue that debt cancellation would simply lead to renewed indebtedness. One can, however, show—although research on these aspects is still thin—that when debt cancellation does occur, the money is on the whole well-used, for schools, clinics, immunisation, access to water…. [data exist from Tanzania, Uganda, Benin, Mozambique….]. The EU, if it were to require that African governments associate their own people in the choice of priorities for spending the money freed up by cancellation, could insure that savings on debt repayments were used wisely everywhere.

Indeed, in exchange for complete cancellation, the creditor countries of Europe should have the right to demand that the recipient governments be accountable to their own people for spending the savings. Some variant of the participatory budgeting process used in many Brazilian cities could be used; one could also call for the election of a council composed of people elected on both a geographical and a sectoral basis [i.e. farmers, workers, entrepreneurs, women, civil servants…] to sit alongside the government and determine the spending priorities.

Some argue that it is not possible to impose “conditionality” on these sovereign governments, but this argument is spurious given that IMF-Bank conditionality has been imposed for decades. Democratic conditionality could simultaneously contribute to solving many governance issues in recipient countries. Where such formulas have been tried [Brazil, Tanzania…] waste and mismanagement of funds is reduced to virtually zero. A small UN Agency—or a European agency—could dispense the sums concerned to the central bank of each debtor country; the government assisted by the Council of its own citizens would determine how to spend it. If the UN solution is chosen, the one that dispenses the international “airline ticket tax” proposed by the then president of France Jacques Chirac and accepted so far by about 15 countries could do such a job; this agency is called UNITAID.

Debt cancellation ought normally to create huge numbers of jobs in the LDCs as well as allowing for much higher spending on health, education and other necessities. It would contribute to job creation in Europe as well, as former debtor countries began to be able to spend on capital goods, rather than on economically sterile interest payments.

3. Commodity prices and trade

One of the most perverse impacts of debt is the export syndrome. All the indebted countries must earn hard currency to pay the interest owed and must therefore export. Particularly in Africa, indebted countries tend to export the same narrow range of primary products with the result that they produce more than markets can absorb and thus push down prices for everyone. Commodity prices have been declining since the 1970s. Lower prices paradoxically encourage overproduction because countries strive to keep their income stable by exporting even more. Subsidies of northern countries, i.e. US subsidies to its cotton producers make matters worse and appeals to the World Trade Organisation do little good.
The share of commodities [oil excluded] in world trade has declined from one-third to one-quarter since the mid-1990s. Because of mass privatisation under structural adjustment policies, governments no longer have the tools to manage carryover stocks or control quantities produced and traded. According to UNCTAD, fifty low income countries are dependent on 2-3 commodities; 39 are dependent on just one. The terms of trade are set massively against raw material producers, with the result that they must export one-third more today than in 1975-85 to buy the same quantity of manufactured goods.
Although China’s purchases have recently improved the prices of primary products somewhat, particularly for metals [which are never produced by smallholders but by large, usually foreign mining enterprises] the declines for cash crops have been consistent, e.g. an average 5.1 percent/ year for coffee; 6.9 percent for cocoa; 3.4 percent for cotton, since 1977. A Ugandan coffee farmer receives 14 cents a kilo for beans; the coffee in a UK supermarket eventually costs the consumer $26.40/kilo. [Figures from 2005, to be updated]. European tariffs are low to non-existent for raw materials but high when goods are processed in the producer countries into more elaborate goods. Poor countries cannot compete in processing their own commodities because they face these high barriers. The European “Everything but Arms” policy has, however, been a positive step which could inspire further ones.

4. European trade policies and exports to Africa

Subsidies in the North can contribute to ruining small farmers; see for example the impact of the above-mentioned US cotton subsidies on African producers. EU agricultural production is subsidised to the extent or about a billion euros a day: what proportion of those subsidies relate to products exported to African markets at prices below true costs of production? We need to know much more about the impact of European trade on small farmers and nascent industries in Africa, particularly the dumping of subsidised products. Some studies, particularly on dairy products, tomatoes and chicken, indicate that exports from Europe at unbeatably low prices have decimated local producers and processing industries [e.g. tomato paste production in Ghana]. There is probably more literature concerning NAFTA’s impact on Mexican farmers than on EU impact on their African counterparts. [NAFTA has ruined at least 350.000 poor Mexican farmers in the poorest States as cheap, industrially produced US corn has flooded Mexican markets].

European Union officials will be aware of persistent Northern NGO criticism of the EU’s present trade policies, whether in the WTO or in the various bilateral/multilateral agreements and EPAs [Economic Partnership Agreements] all of which contain detailed investment, raw-material access and government procurement provisions. The overwhelming bias towards the interests of European transnational corporations and the latter’s influence over EU trade policy seems in little doubt. EPAs have been challenged by a few African countries [Senegal, South Africa] but most are acquiescing.

The very least the Commission could do would be to monitor the actual behaviour and impact of European transnational corporations, particularly raw-material extractors, in the migrant-sending countries. On the occasion of the EU-Latin American Summit held in Vienna in May 2006, the Enlazando Alternativo [alternative summit] commissioned studies by Latin American NGOs and researchers on the impact of European TNCs in Central and Latin America. Their eye-witness reports yielded a wealth of information and, it must be said, highly negative results for local populations, whether the companies concerned were engaged in mining, utilities, agricultural, paper or financial industries.] (9)

5. Fisheries

The fish catch along the western coast of Africa has plummeted and small fisherman can no longer make a living. Many say that the depletion of stocks is due to overfishing by European industrial trawlers. Small fishermen are said to be selling their boats to the people-smuggling rings that use them to try to take migrants to the Canaries. The situation may be similar for countries bordering the Mediterranean. Aside from anecdotes, we know very little about this phenomenon.

Addendum: policies for which the EU is not directly responsible but which further impoverish migrant-sending countries.

Free trade: Initially, the World Bank announced that developing countries would see massive benefits [over $300 billion/year] from genuinely free trade. Under pressure from economists elsewhere, the Bank was obliged in successive stages to scale back its estimates to a mere $16 billion, half of which was expected to go to Brazil and Argentina. The most that the poor countries are likely to see from more free trade is a 1 percent increase in GDP over the next 10 years. (10)

The WTO has claimed that the stalled “Doha Development Round” would provide real gains for the South. However, the North, including the EU, has so far proposed granting access for only 97 percent of each southern country’s goods. This may sound generous, but due to the reliance of so many Southern countries on a very limited number of products, the North can easily place what each country can produce economically in the category of the 3 percent remaining. [NB: All the EPAs put forward by Europe are “WTO Plus”].

WTO banana decision: It may already be soon enough to assess the impact on local producers of the WTO ruling on the EU-ACP banana dispute. The preferential regime by which Europe guaranteed to purchase a set quantity of bananas from ACP countries was ruled WTO-illegal: Europe does not have the right to give any privileges to ACP countries and must accept, for example, the bananas produced on plantations by US transnational corporations like Chiquita Brands, in Ecuador or Central America. What has been the effect of this decision on poor ACP farmers? Has it increased their tendency to attempt migration?

Multi-Fibre agreement: The end of the Multi-Fibre agreement gave China a huge advantage in textiles. Chinese exports have had a large impact in Europe itself, but in the South, the effect has been devastating. Textile industries in places like Bangladesh, Cambodia or Central America are unlikely to recover. In Morocco, the industry has already shed hundreds of thousands of jobs. These unemployed workers are going back to kif [drug] production or attempting to emigrate. Can the EU do anything to mitigate these impacts? Clearly in this case, they cannot be ascribed to Europe’s own policies, but should they influence the EU’s attitude within the WTO or in other international-system and/or trade regimes?

Financial crises: Even before the present market turbulence and incipient recession stemming from—but not confined to—the subprime crisis, financial meltdowns have taken a heavy toll. The International Labour Organisation has estimated that over 90 “serious financial crises” occurred between the beginning of the 1990s and 2002, with great loss of economic security, jobs, livelihoods and savings. The ILO definition of “serious” is that the value of the currency dropped by at least 25 percent in a single month and that this drop was at least 10 percent greater than the fall of the previous month. In other words, these are crises in which the value of peoples’ bank accounts, insurance, social security, pensions, and so on fell by at least 35 percent within the space of two months. COUNTRIES OF THE AFRICAN CONTINENT IN THIS CATEGORY WERE [to be supplied from the ILO report called Economic Security for a Better World , 2004,to which I do not have access at the moment].

Climate change: Surely the impact of rapid climate change is no longer in doubt and needs no more research per se. The IPCC has established that dry/humid areas will become more drought/flood prone, that extremes of temperatures and secondary impacts will strike the vulnerable in the South with greater force than in the temperate zones of the North. We have already witnessed catastrophic floods in Sub-Saharan Africa and know that stresses of all kinds will multiply. Here is a perfect opportunity for European S&T to propose clean and abundant energy systems [particularly solar] for the South, in an all-out development effort to change not just the South but also Europe’s own energy scenario. For the moment, palliative and relief programmes will be more necessary than ever.

Conclusion

During and after the decolonisation process, formerly colonised and/or dependent countries produced many brilliant and charismatic leaders [present at Bandung and beyond….]. These countries formed political groups like the Non-aligned Movement or the G-77 [which later numbered well over 100 countries]. From the 1970s in particular, they called for a New International Economic Order; various UN documents like the 1981 “Brandt Report” seconded many of their demands. It looked for a time as if there might finally be a fairer distribution of wealth in the world and greater opportunity for emerging nations. The North was obliged at least to pay lip-service to the demands emerging from a newly confident South.

In 1974 at the FAO Rome World Food Conference, Henry Kissinger [fresh from engineering the fascist coup in Chile] intoned that “Within a decade, no child will go to bed hungry, no family will fear for its next day’s bread…” Other conferences followed and the South thought, with some justification, that it was making progress. Gradually, however, the North, led by the United States, brought the situation back under northern control. Other dictatorships besides that of Pinochet were introduced and supported by the North and former colonisers often underpinned undemocratic and repressive regimes in Sub-Saharan Africa. In Jamaica in 1981, the newly elected Ronald Reagan put a stop to the process of New Economic Order and greater autonomy once and for all.

The European Union as a comparatively new political entity has the opportunity to break with this past and show that it can not only cooperate but act as an advocate for permanent, equal partnerships in the South. Every ruined farmer, every unemployed youth, every fisherman without a livelihood is a candidate for migration. Europe can stop cutting off avenues to prosperity and development with its policies and make migration less necessary.

Naturally it would have to disappoint some more or less powerful European lobbies in the short term, but the benefits for Europeans as well as for the people of the South would be enormous. A fortress-Europe policy will not work and, under present circumstances at least, an “open borders” policy is politically unacceptable. The only other options are to reinforce the unsuccessful police-security-expulsion response or to study present European practices and decide to eliminate abuses—using research results to buttress the case. Otherwise, no one—particularly no European official—should profess surprise as they witness the steady flow of incoming migrants.

Notes

(1) UNU-WIDER, “Seminar on International Migration and Development: Patterns, Problems and Policy, United Nations, New York, 12 September 2006; or UNU-Wider seminar in 2001 on “International Migration and Poverty; also Timothy J. Hatton and Jeffrey G. Williamson, “What Fundamentals Drive World Migration?”, UNU-WIDER Discussion Paper no.2003/23. The ongoing WIDER project on Refugees, International Migration and Poverty is co-directed by George Borjas of Harvard and Jeff Crisp of the UNHCR.

(2) www.compas.ox.ac.uk/publications. There are ten subheadings of various types of publications.

(3) Revuee Européenne des Migrations internationales – Keyword search.

(4) www.cis.org Founded in 1985, the Center defines itself as non-partisan and non-profit; “pro-immigrant, low immigration”; that is, it aims for fewer immigrants and a better welcome for those who do come. The “Right Wing Watch” of People for the American Way considers the CIS as a rightist organisation. It is thus all the more surprising that CIS has shown no apparent interest in US policy contributions to “push factors”.

(5) Patricia Adams, Odious Debts, Probe International, Earthscan, Toronto, 1991

(6) Susan George, A Fate Worse than Debt, Penguin, London 1987; Susan George, The Debt Boomerang, Pluto Press, London, 1992; Patricia Adams, Odious Debt, PUBLISHER DATE; more recent figures regularly published by the Comité pour l’Annulation de la Dette du Tiers-Monde-CADTM, www.cadtm.org

(7) Léonce Ndikumana and James K. Boyce, Tax Justice Focus, the quarterly journal of the Tax Justice Network, First quarter 2008, Volume 4 no.1,

(8) In a memorable presentation, A.T. Moussa Tchangiri,
director of the magazine Alternative in Niger, at the World Social Forum in Bamako [January 2006] described in fine detail how forced privatization policies [of transport, cereal stock-holding, veterinary services, etc.] had directly contributed to widespread famine in that country.

(9) http://peoplesdialogue.org/en/node/39

(10) Kevin Gallagher of Tufts University, who also attended the EU meeting that gave rise to the present series of papers, including mine, has written decisively on this issue.

New Labour is Dead

Ellie Keen — Sun, 04 May 2008 11:38:38 +0000

Power Can’t Shape Truth Forever

New Labour has suffered a crushing defeat. The Blair project of promoting and implementing right-wing policies in the knowledge that traditional working class voters would remain solid died on 1 May 2008. Labour’s vote in the local elections in dropped to 24 percent, a point below the Liberal Democrats and twenty points less than the Conservatives (44 percent). Given the scale of the catastrophe, It seems unlikely that Gordon Brown can win the next general election.

Awestruck by Margaret Thatcher, Blair and Brown aped her achievements within their own party, squeezing old social-democratic ideas out of themselves, drop by drop. They were all market fundamentalists now. Deregulation and privatisation became a mantra and over the last ten years the social divide in the country between rich and poor increased more than even under Thatcher. Redistribution of wealth was no longer on Labour’s agenda.

As the market suffered a series of shocks—-the collapse of a debt-ridden British bank, Northern Rock, led to state intervention in the form of nationalisation. No lessons were learnt. Helping the rich by further tax-cuts, abandoning (under pressure from the Financial Times) plans to tax non-domiciled billionaires symbolised the regime. The neo-liberal model atomised social and political life, weakened democratic accountability and drastically reduced the margins of reformist possibilities within the system. After 9/11 civil liberties were seriously eroded. A fdew weeks ago Brown and his ministers were arguing for increasing the detention of suspects to 42-days without trial. The Conservatives and police chiefs opposed this as draconian.

The British electoral system helped to conceal the relentless ebbing of popular support for the Blairite agenda. No longer. The New Labour Emperor is now revealed without any clothes. Power can shape ‘truth’, but not forever. That is the lesson of the New Labour defeat.

In London the choice was clear. . A Conservative celebrity who carefully cultivates an ultra-reactionary image, Boris Johnson, is a star of TV comedy shows. Given the way that politics has gone to the dogs in so many parts of the democratic world, its hardly surprising that celebrity status and wealth have taken centre stage. A somewhat pathetic and ineffectual ex-policeman stood for the Liberal Democrats or Ken Livingstone, the Labour candidate. Even though Livingstone first won as an independent against New Labour, he subsequently made his peace with Blair and rejoined the party, while preserving an independent stance on the wars in Iraq and Afghanistan and developing his own foreign policy by inviting Hugo Chavez to visit London.

The elections for the Mayor of London reflected the national mood. That Livingstone made mistakes is obvious. The biggest error was not in receiving an eccentric Muslim cleric and annjoying the right-wing press, but re-entering the Labour fold. The basis of his popularity had rested on the fact that he was not a confected New Labour politician. The fact that margin of his defeat appears to be less than the national average reflected this fact, but was not enough to save him. The official result has yet to be declared, but New Labour commentators on TV have accepted defeat. He suffered because he was associated with an unpopular New Labour government. Had he remained an independent and lacerated the Blair and Brown regimes, instead of being photographed with them he would have been home and dry.

A city in which 70% of the citizens oppose the British presence in Iraq will now be represented by a pro-war mayor. Who cares if a million Iraqis have died since the occupation of their country, three million have become refugees and millions in that suffering country face the most horrendous conditions in their everyday lives. Anything associated with New Labour was punished.

Tariq Ali’s memoir Streetfighting Years: An Autobiography of the Sixties is published by Verso.

Naomi Klein's The Shock Doctrine

Ellie Keen — Thu, 01 May 2008 21:42:31 +0000

Naomi Klein is at her best in explaining the relentless onslaught of neoliberal policies all over the world, and their genesis in academic circles in the USA, particularly surrounding the economist Milton Friedman. Her basic thesis is that the doctrine of neoliberalism has come to dominate the world by using periods of massive public disorientation following collective shock – wars, terrorist attacks, natural disasters – to push through unpopular neoliberal reforms. However, this thesis is not without its flaws.

Klein’s strongest insight is the analogy between psychological damage through torture, and physical damage through neoliberalism. She quotes CIA manuals on torture practices and draws illuminative parallels with neoliberalism: ‘Like the terrrorized prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect.’ This is a novel and instructive analogy – and goes some way to highlighting the close connections between psychological and physical damage that are neglected by so many other commentators. However, this analogy could be usefully applied much further. For Klein the ‘disaster capitalists’ lie in wait, ready to jump onto ‘disasters’ when they emerge. While this is no doubt the case for ‘natural’ disasters, most disasters are not natural, but are an intrinsic parts of the economic, political and social system we live in, and are increasingly frequent as neoliberalism extends its reach across the world. I would argue for a greater degree of culpability of neoliberalism and its advocates for creating the shocks in the first place – a culpability akin to that of the torturer. Yet Klein shies away taking her own analogy to its logical conclusion. For torture is not merely about the creation of sudden terror, but the normalisation and generalisation of states of fear amongst all who would resist. Similarly neo-liberal ‘shocks’ are merely particular moments in a much longer-term and more generalised attempt to control populations, by normalising fear and insecurity so much that they become part of our everyday experience. This seems to betray an overly narrow framework behind Klein’s analysis; she does not seem to take into account the wider dimensions of how power as a whole operates within a political, social and economic system, wider than just neoliberalism or corporations. This makes the book, despite its 466 pages, feel disappointingly partial, and limited in its analytical and historical scope.

For Klein, neoliberalism is basically the rule of the market and corporations over the state, and therefore over the people. In this scenario, corporations and the state are in direct competition with each other, which leads her to neglect the role of states and state power in facilitating elite power using the market, and more recently, using neoliberalism. This makes her explanation of neoliberalism’s dominance seem incomplete; arguing, as she does, that it is based on the power of opportunistic shock, rather than other, more historically embedded mechanisms. Not everyone has been ‘shocked’ into submission to neoliberalism. There have also been a host of other, often more hidden and insidious attempts to make people give up what it is in their interests to hold onto. These include ideological apparatuses such as education, control of the media, knowledge and information, think-tanks, the co-option of civil society, and repressive apparatuses such the police, the courts, governments, prisons etc. The power of corporations is enabled by a host of power mechanisms, stemming from a relationship of mutual benefit between elites, but this isn’t evident in Klein’s analysis.

Her oversight ensures that she does not analyse the wider context of the shock doctrine she dissects. For Klein, the use of shock is a sign of strength of the neoliberal project. However, it can also be argued to be a sign of weakness. Liberalism is no longer enough to keep populations in check and keep economic growth rising, so a more extreme form has emerged, one which it is increasingly difficult to secure consent for.

Iraq is a case in point: a country which had to be deliberately ‘shocked and awed’ into submission, making the companies and states behind it extremely unpopular, and unleashing a powerful Iraqi resistance, which puts the entire mission in jeopardy. Klein sees this as a shock operation, deliberately manufactured by neoliberal (and neo-conservative) architects, but she does not see this as a contradiction of her thesis, more a ‘notable exception’. However, it seems more plausible to see the destruction and ‘reconstruction’ of Iraq as proof that neoliberalism is being pushed to its limit – forced to reveal itself as a force that creates the disasters required to shock subjects into releasing to corporations their resources, their wealth and their labour.

Capitalism needs to constantly expand: exploiting and creating ‘disasters’ with neoliberal shock treatment is the latest weapon to do this. But it is a weapon which weakens the enterprise by exposing its in-built violence, and risks the effectiveness of the other ‘softer’ weapons. Just as torture is an extreme form of repression, so neoliberal shock treatment is an extreme form of liberal capitalism. But Klein fails to locate ‘disaster capitalism’ more broadly in the historical continuities and systemic features of contemporary capitalism. In doing so, she downplays both the everyday violence and the weaknesses of the current world order.