Aasim Sajjad Akhtar in The Dawn
FOR weeks extending into months, Pakistan’s intellectual and political mainstream has insisted that there is no option but to revive the IMF loan programme. The frank admission made by members of the treasury benches in parliament that this is an ‘IMF budget’ that the country had to take on simply confirms what is purportedly unchallenged common sense: there is no alternative (TINA).
The acronym TINA came into widespread circulation in the late 1990s when virtually one-size-fits-all IMF- and World Bank-dictated economic policies were foisted upon much of Latin America, Africa and Asia. Until the end of the Cold War, the state acted at least to some extent in favour of labour by regulating capital, but generations that have come of age after the mid-1990s have been made to believe that there is now only one workable economic model — neoliberalism.
Make no mistake: TINA was a concerted ideological project that continues to this day, despite the fact that neoliberal economic fantasies peddled by a globalised class of profiteers and states have deepened inequality, led to dispossession of working masses from jobs, housing and life itself, and wreaked havoc on the natural environment.
TINA is based around the fact that we do not export enough to cover our imports, while our revenues are perpetually less than our expenditures, and so we need loans to get by. Insofar as ‘structural reform’ entails increasing our exports, global creditors like the IMF ‘encourage’ local producers to become outsourcing partners of MNCs by treating workers like serfs. When it comes to reducing expenditures, they never flinch when our oligarchic rulers slash pro-poor subsidies, health, education and other social sector spending.
By the TINA metric, the US should take more IMF loans and adopt conditionalities than any other country. In 2021 alone, the US fiscal deficit was almost $3 trillion. But Washington will never go to the IMF and beg for loans and then take on policy conditionalities accordingly because the dollar is the world’s reserve currency and the rest of us fund its deficit. In short, ‘structural reform’ is essentially a rinse-and-repeat political slogan that serves the interests of global investors, firms and the most powerful states.
TINA fiction continues to thrive in Pakistan because our political and economic imagination has been stunted by ‘experts’ who claim to be acting on the basis of ‘objective’ economic facts which, in fact, are largely ideological. None of the explicitly political players in this nauseatingly repetitive story is interested in putting the brakes on unrestrained capital accumulation and the pillage of what remains of the commons.
In our case, all parties who have held the reins of government in recent times, and of course their khaki patrons, prefer to engage in blame games against one another rather than offer substantive visions of an alternative economic order.
The IMF pretends to be politically uninterested and offer what it claims only to be ‘technocratic’ solutions. All donors — including the Chinese whose ‘Beijing Consensus’ is often described as a direct challenge to the ‘Washington Consensus’ — demand ‘structural reforms’ to suit them whilst claiming they have no political interests of their own.
Progressive movements in Latin America offer a clear counterfactual: there are meaningful alternatives to neoliberal orthodoxy that can repeal at least some of the privileges of financial oligarchs and state elites and thus meet the needs of the mass of people, whilst also making some concessions to future generations. Even in North America and Western Europe, where progressive discourses have made a comeback, TINA slogans are increasingly passé and redistribution is back on the agenda.
Yet Western states and multilateral donors continue to outsource neoliberal orthodoxy to Asia and Africa, even as the contradictions of our prevailing political-economic order become acute. We are supposed not to link the growing intensity of earthquakes, forest fires, cyclones and floods to the no-holds-barred accumulation regime that links domestic and global profiteers alike.
We are supposed not to ask too many difficult questions about the hundreds of millions of pounds that have been given back to real estate moguls like Malik Riaz through the collusion of Pakistani and Western officialdom. We are supposed to take for granted that only Russian oligarchs are bad, while all others are to be cheered on in the interests of ‘nation’ and its ‘development’.
News that the IMF programme was being restored was swiftly followed by Chinese and Saudi guarantees. Is this cause for celebration? Our ruling class, khakis at the helm, do not want young people to imagine politics as anything more than dole-outs, profiteering and hateful rhetoric. But the unbridled power of oligarchs, home and abroad, will not remain unchallenged forever.
'People will forgive you for being wrong, but they will never forgive you for being right - especially if events prove you right while proving them wrong.' Thomas Sowell
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Showing posts with label redistribution. Show all posts
Showing posts with label redistribution. Show all posts
Friday, 24 June 2022
Thursday, 13 January 2022
Wednesday, 22 July 2020
Sunday, 19 November 2017
This is redistribution for Zimbabwe’s elite, not revolution in a ruined nation
Jason Burke in The Guardian
Drive any distance anywhere in Zimbabwe beyond the upmarket Borrowdale neighbourhood in Harare, where Robert Mugabe and his wife Grace are detained in their sprawling mansion, and the scale of the challenges facing what was once one of the wealthiest countries in Africa is evident.
In the capital, the roads are potholed, outside they are cracked and crumbling. Banks are so short of cash that people wait hours to withdraw even tiny sums. The only jobs are in government service, yet salaries are rarely paid. The best and the brightest have long fled abroad. Warehouses are empty, fields lie fallow. The busiest store in rural villages is the “bottle shop”, selling dirt-cheap spirits.
Zimbabwe has famously abundant natural resources but resuscitating the economy after 20 years of disastrous mismanagement and wholesale looting by corrupt officials is a major undertaking. The banking system needs to be rebooted, faith restored in the national currency and government finances somehow replenished. The vast debts incurred by Mugabe’s regime need to be rescheduled or waived and new funding arranged to rebuild the country’s shattered infrastructure.
Investors have long been interested in Zimbabwe but put off by the significant risk that any funds will be stolen or any successful venture appropriated. Can they now be sure that will not happen? Old habits die hard.
The ruling Zanu-PF party and allies in the military launched their takeover to purge an ambitious faction that threatened their position, not because they wanted to see structural reform that would shut down their own lucrative rackets and rent-seeking.
There are immediate practical problems, too. The police are seen as creatures of Mugabe by the military and allies, but someone needs to patrol the streets. There is the fate of Comrade Bob and Grace, when they are no longer president and first lady, to decide. There is a government to form, possible elections to hold.
It is this political process that poses the greatest challenge. The people of Zimbabwe have high hopes of a new democratic era. But the ousting of Mugabe was a redistribution of power within the ruling elite of Zimbabwe, not a people’s revolution.
Emmerson Mnangagwa, the ousted vice-president, who is most likely to succeed Mugabe when he finally leaves power, is no committed democrat. He was Mugabe’s chief enforcer, with a long history of human rights abuse. Mnangagwa, 75, will need to make some concessions to public opinion within Zimbabwe and the hopes of the international community, not least to get the donor and diaspora money the country so desperately needs. However, he will seek to do this while reinforcing, not weakening, the grip of the party.
But how long will Zimbabweans tolerate the rule of a clique of septuagenarian veterans of an armed struggle that took place before most of the population was born?
A similar question has been asked elsewhere in Africa over recent decades. It is being asked today in neighbouring South Africa, where the lustre of the African National Congress has steadily diminished over its 23 years in power.
The eventual demise of parties like Zanu-PF is inevitable. But so, too, is the trauma that accompanies their passing.
Drive any distance anywhere in Zimbabwe beyond the upmarket Borrowdale neighbourhood in Harare, where Robert Mugabe and his wife Grace are detained in their sprawling mansion, and the scale of the challenges facing what was once one of the wealthiest countries in Africa is evident.
In the capital, the roads are potholed, outside they are cracked and crumbling. Banks are so short of cash that people wait hours to withdraw even tiny sums. The only jobs are in government service, yet salaries are rarely paid. The best and the brightest have long fled abroad. Warehouses are empty, fields lie fallow. The busiest store in rural villages is the “bottle shop”, selling dirt-cheap spirits.
Zimbabwe has famously abundant natural resources but resuscitating the economy after 20 years of disastrous mismanagement and wholesale looting by corrupt officials is a major undertaking. The banking system needs to be rebooted, faith restored in the national currency and government finances somehow replenished. The vast debts incurred by Mugabe’s regime need to be rescheduled or waived and new funding arranged to rebuild the country’s shattered infrastructure.
Investors have long been interested in Zimbabwe but put off by the significant risk that any funds will be stolen or any successful venture appropriated. Can they now be sure that will not happen? Old habits die hard.
The ruling Zanu-PF party and allies in the military launched their takeover to purge an ambitious faction that threatened their position, not because they wanted to see structural reform that would shut down their own lucrative rackets and rent-seeking.
There are immediate practical problems, too. The police are seen as creatures of Mugabe by the military and allies, but someone needs to patrol the streets. There is the fate of Comrade Bob and Grace, when they are no longer president and first lady, to decide. There is a government to form, possible elections to hold.
It is this political process that poses the greatest challenge. The people of Zimbabwe have high hopes of a new democratic era. But the ousting of Mugabe was a redistribution of power within the ruling elite of Zimbabwe, not a people’s revolution.
Emmerson Mnangagwa, the ousted vice-president, who is most likely to succeed Mugabe when he finally leaves power, is no committed democrat. He was Mugabe’s chief enforcer, with a long history of human rights abuse. Mnangagwa, 75, will need to make some concessions to public opinion within Zimbabwe and the hopes of the international community, not least to get the donor and diaspora money the country so desperately needs. However, he will seek to do this while reinforcing, not weakening, the grip of the party.
But how long will Zimbabweans tolerate the rule of a clique of septuagenarian veterans of an armed struggle that took place before most of the population was born?
A similar question has been asked elsewhere in Africa over recent decades. It is being asked today in neighbouring South Africa, where the lustre of the African National Congress has steadily diminished over its 23 years in power.
The eventual demise of parties like Zanu-PF is inevitable. But so, too, is the trauma that accompanies their passing.
Thursday, 29 September 2016
Corbyn is an atheist – but his ideas are true to the Bible
Giles Fraser in The Guardian
Readings in the Church of England and the Roman Catholic church are set in advance on a three-year cycle. That’s partly to stop priests from constantly picking their favourite bits and partly to make sure all parts of the Bible are covered, even the tricky passages. Which means that, last Sunday, up and down the country, the same readings were read out to congregations. First we heard a stinging condemnation of wealth from the book of Amos: “Alas for those who lie on beds of Ivory, and lounge on their couches.” Then a psalm about God sustaining the widow and the orphan. Then a long passage about money – “Those who want to be rich fall into temptation and are trapped by many senseless and harmful desires that plunge people into ruin and destruction” – from Paul’s first letter to Timothy. Then, to top it all off, the story from Luke of a rich man (“who was dressed in fine linen and feasted sumptuously every day”) burning in hell and a poor man, who lived homeless at his gate, being carried off to heaven by the angels.
Readings in the Church of England and the Roman Catholic church are set in advance on a three-year cycle. That’s partly to stop priests from constantly picking their favourite bits and partly to make sure all parts of the Bible are covered, even the tricky passages. Which means that, last Sunday, up and down the country, the same readings were read out to congregations. First we heard a stinging condemnation of wealth from the book of Amos: “Alas for those who lie on beds of Ivory, and lounge on their couches.” Then a psalm about God sustaining the widow and the orphan. Then a long passage about money – “Those who want to be rich fall into temptation and are trapped by many senseless and harmful desires that plunge people into ruin and destruction” – from Paul’s first letter to Timothy. Then, to top it all off, the story from Luke of a rich man (“who was dressed in fine linen and feasted sumptuously every day”) burning in hell and a poor man, who lived homeless at his gate, being carried off to heaven by the angels.
Absolutely nothing that has been said by Jeremy Corbyn over the past few months is anything like as hostile to the concentration of wealth in the hands of a few as the Bible. Indeed, compared to the book of Amos and the gospel of Luke, the campaign group Momentum are a bunch of bland soft-pedalling apologists for the status quo. So how, then, can middle England sit through these readings without storming out, but apparently find Corbyn unelectable? Have they not been listening?
It’s five years next month since the Occupy protest arrived at St Paul’s cathedral. Though originally aimed at the London stock exchange, its impact on the cathedral and the wider church was, if anything, much greater. For what the protest dramatised was the deaf ear that the church and its members often turn when it comes to any reference to their wallets.
This week saw the 90th anniversary of the BBC broadcasting choral evensong. During every one of these the choir will have been encouraging revolution – bringing down the mighty from their thrones and lifting up the lowly, again from Luke’s gospel. On Thursday, they were singing this from Westminster Abbey, the heart of the establishment. Sedition hiding in plain view. And no one batted an eyelid. Which I suspect is evidence that people were listening to the wonderful music and ignoring what they were singing about.
But despite all the aesthetic chaff that the church throws out to misdirect the ear, it remains gobsmacking that, of all people, it’s the Tories that are still most likely to profess their commitment to the church. For heaven’s sake, Theresa May is a vicar’s daughter. There is the brilliant little bit in Godfather part III when Cardinal Lamberto is talking to Michael Corleone by a fountain in a cloister of the Vatican. “Look at this stone. It has been lying in the water for a very long time but the water has not penetrated,” the cardinal explains, “The same thing has happened to men in Europe. For centuries they have been surrounded by Christianity, but Christ has not penetrated.”
Even so, can it really be so inconceivable that Jeremy Corbyn’s political philosophy is inimical to the British people when he – atheism notwithstanding – is the only one who even approximates to Christian teaching about wealth. After all, Christianity is, like it or not, still the official religion of this country. And the Queen is its head. So you’d think that the Queen would be cheering on Corbyn, encouraging his bold redistributive instincts, and dismissing the Blairites for their fondness for Mammon. For, unlike Peter Mandelson, the Bible is not intensely relaxed about people getting filthy rich.
And if the Bible is to be taken literally, Donald Trump is headed for the fiery furnace. He shouldn’t boast how rich he is. He should be ashamed about it. After all, Trump says it’s his favourite book. Funny, isn’t it? When the Bible speaks about something like homosexuality, it has to be taken literally. When it speaks about money, it’s all a metaphor.
It’s five years next month since the Occupy protest arrived at St Paul’s cathedral. Though originally aimed at the London stock exchange, its impact on the cathedral and the wider church was, if anything, much greater. For what the protest dramatised was the deaf ear that the church and its members often turn when it comes to any reference to their wallets.
This week saw the 90th anniversary of the BBC broadcasting choral evensong. During every one of these the choir will have been encouraging revolution – bringing down the mighty from their thrones and lifting up the lowly, again from Luke’s gospel. On Thursday, they were singing this from Westminster Abbey, the heart of the establishment. Sedition hiding in plain view. And no one batted an eyelid. Which I suspect is evidence that people were listening to the wonderful music and ignoring what they were singing about.
But despite all the aesthetic chaff that the church throws out to misdirect the ear, it remains gobsmacking that, of all people, it’s the Tories that are still most likely to profess their commitment to the church. For heaven’s sake, Theresa May is a vicar’s daughter. There is the brilliant little bit in Godfather part III when Cardinal Lamberto is talking to Michael Corleone by a fountain in a cloister of the Vatican. “Look at this stone. It has been lying in the water for a very long time but the water has not penetrated,” the cardinal explains, “The same thing has happened to men in Europe. For centuries they have been surrounded by Christianity, but Christ has not penetrated.”
Even so, can it really be so inconceivable that Jeremy Corbyn’s political philosophy is inimical to the British people when he – atheism notwithstanding – is the only one who even approximates to Christian teaching about wealth. After all, Christianity is, like it or not, still the official religion of this country. And the Queen is its head. So you’d think that the Queen would be cheering on Corbyn, encouraging his bold redistributive instincts, and dismissing the Blairites for their fondness for Mammon. For, unlike Peter Mandelson, the Bible is not intensely relaxed about people getting filthy rich.
And if the Bible is to be taken literally, Donald Trump is headed for the fiery furnace. He shouldn’t boast how rich he is. He should be ashamed about it. After all, Trump says it’s his favourite book. Funny, isn’t it? When the Bible speaks about something like homosexuality, it has to be taken literally. When it speaks about money, it’s all a metaphor.
Thursday, 2 April 2015
‘Wealth creators’ are robbing our most productive people
George Monbiot in The Guardian
There is an inverse relationship between utility and reward. The most lucrative, prestigious jobs tend to cause the greatest harm. The most useful workers tend to be paid least and treated worst.
I was reminded of this while listening last week to a care worker describing her job. Carole’s company gives her a rota of, er, three half-hour visits an hour. It takes no account of the time required to travel between jobs, and doesn’t pay her for it either, which means she makes less than the minimum wage. During the few minutes she spends with a client, she may have to get them out of bed, help them on the toilet, wash them, dress them, make breakfast and give them their medicines. If she ever gets a break, she told the BBC radio programme You and Yours, she spends it with her clients. For some, she is the only person they see all day.
Is there more difficult or worthwhile employment? Yet she is paid in criticism and insults as well as pennies. She is shouted at by family members for being late and not spending enough time with each client, then upbraided by the company because of the complaints it receives. Her profession is assailed in the media as the problems created by the corporate model are blamed on the workers. “I love going to people; I love helping them, but the constant criticism is depressing,” she says. “It’s like always being in the wrong.”
Her experience is unexceptional. A report by the Resolution Foundation reveals that two-thirds of frontline care workers receive less than the living wage. Ten percent, like Carole, are illegally paid less than the minimum wage. This abuse is not confined to the UK: in the US, 27% of care workers who make home visits are paid less than the legal minimum.
Let’s imagine the lives of those who own or run the company. We have to imagine it because, for good reasons, neither the care worker’s real name nor the company she works for were revealed. The more costs and corners they cut, the more profitable their business will be. In other words, the less they care, the better they will do. The perfect chief executive, from the point of view of shareholders, is a fully fledged sociopath.
Such people will soon become very rich. They will be praised by the government as wealth creators. If they donate enough money to party funds, they have a high chance of becoming peers of the realm. Gushing profiles in the press will commend their entrepreneurial chutzpah and flair.
They’ll acquire a wide investment portfolio, perhaps including a few properties, so that – even if they cease to do anything resembling work – they can continue living off the labour of people such as Carole as she struggles to pay extortionate rents. Their descendants, perhaps for many generations, need never take a job of the kind she does.
Care workers function as a human loom, shuttling from one home to another, stitching the social fabric back together while many of their employers and shareholders, and government ministers, slash blindly at the cloth, downsizing, outsourcing and deregulating in the cause of profit.
It doesn’t matter how many times the myth of meritocracy is debunked. It keeps re-emerging, as you can see in the current election campaign. How else, after all, can the government justify stupendous inequality?
One of the most painful lessons a young adult learns is that the wrong traits are rewarded. We celebrate originality and courage, but those who rise to the top are often conformists and sycophants. We are taught that cheats never prosper, yet the country is run by spivs. A study testing British senior managers and chief executives found that on certain indicators of psychopathy their scores exceeded those of patients diagnosed with psychopathic personality disorders in the Broadmoor special hospital.
If you possess the one indispensable skill – battering and blustering your way to the top – incompetence in other areas is no impediment. The former Hewlett-Packard chief executive Carly Fiorina features prominently on lists of the worst US bosses: quite an achievement when you consider the competition. She fired 30,000 workers in the name of efficiency yet oversaw a halving of the company’s stock price. Morale and communication became so bad that she was booed at company meetings. She was forced out, with a $42m severance package. Where is she now? About to launch her campaign as presidential candidate for the Republican party, where, apparently, she is considered a serious contender. It’s the Mitt Romney story all over again.
At university I watched in horror as the grand plans of my ambitious friends dissolved. It took them about a minute, on walking into the corporate recruitment fair, to see that the careers they had pictured – working for Oxfam, becoming a photographer, defending the living world – paid about one fiftieth of what they might earn in the City. They all swore they would leave to follow their dreams after two or three years of making money; none did. They soon adjusted their morality to their circumstances. One, a firebrand who wanted to nationalise the banks and overthrow capitalism, plunged first into banking, then into politics. Claire Perry now sits on the frontbench of the Conservative party. Flinch once, at the beginning of your career, and they will have you for life. The world is wrecked by clever young people making apparently sensible choices.
The inverse relationship doesn’t always hold. There are plenty of useless, badly paid jobs, and a few useful, well-paid jobs. But surgeons and film directors are greatly outnumbered by corporate lawyers, lobbyists, advertisers, management consultants, financiers and parasitic bosses consuming the utility their workers provide. As the pay gap widens – chief executives in the UK took 60 times as much as the average worker in the 1990s and 180 times as much today – the uselessness ratio is going through the roof I propose a name for this phenomenon: klepto-remuneration.
There is no end to this theft except robust government intervention: a redistribution of wages through maximum ratios and enhanced taxation. But this won’t happen until we challenge the infrastructure of justification, built so carefully by politicians and the press. Our lives are damaged not by the undeserving poor but by the undeserving rich.
There is an inverse relationship between utility and reward. The most lucrative, prestigious jobs tend to cause the greatest harm. The most useful workers tend to be paid least and treated worst.
I was reminded of this while listening last week to a care worker describing her job. Carole’s company gives her a rota of, er, three half-hour visits an hour. It takes no account of the time required to travel between jobs, and doesn’t pay her for it either, which means she makes less than the minimum wage. During the few minutes she spends with a client, she may have to get them out of bed, help them on the toilet, wash them, dress them, make breakfast and give them their medicines. If she ever gets a break, she told the BBC radio programme You and Yours, she spends it with her clients. For some, she is the only person they see all day.
Is there more difficult or worthwhile employment? Yet she is paid in criticism and insults as well as pennies. She is shouted at by family members for being late and not spending enough time with each client, then upbraided by the company because of the complaints it receives. Her profession is assailed in the media as the problems created by the corporate model are blamed on the workers. “I love going to people; I love helping them, but the constant criticism is depressing,” she says. “It’s like always being in the wrong.”
Her experience is unexceptional. A report by the Resolution Foundation reveals that two-thirds of frontline care workers receive less than the living wage. Ten percent, like Carole, are illegally paid less than the minimum wage. This abuse is not confined to the UK: in the US, 27% of care workers who make home visits are paid less than the legal minimum.
Let’s imagine the lives of those who own or run the company. We have to imagine it because, for good reasons, neither the care worker’s real name nor the company she works for were revealed. The more costs and corners they cut, the more profitable their business will be. In other words, the less they care, the better they will do. The perfect chief executive, from the point of view of shareholders, is a fully fledged sociopath.
Such people will soon become very rich. They will be praised by the government as wealth creators. If they donate enough money to party funds, they have a high chance of becoming peers of the realm. Gushing profiles in the press will commend their entrepreneurial chutzpah and flair.
They’ll acquire a wide investment portfolio, perhaps including a few properties, so that – even if they cease to do anything resembling work – they can continue living off the labour of people such as Carole as she struggles to pay extortionate rents. Their descendants, perhaps for many generations, need never take a job of the kind she does.
Care workers function as a human loom, shuttling from one home to another, stitching the social fabric back together while many of their employers and shareholders, and government ministers, slash blindly at the cloth, downsizing, outsourcing and deregulating in the cause of profit.
It doesn’t matter how many times the myth of meritocracy is debunked. It keeps re-emerging, as you can see in the current election campaign. How else, after all, can the government justify stupendous inequality?
One of the most painful lessons a young adult learns is that the wrong traits are rewarded. We celebrate originality and courage, but those who rise to the top are often conformists and sycophants. We are taught that cheats never prosper, yet the country is run by spivs. A study testing British senior managers and chief executives found that on certain indicators of psychopathy their scores exceeded those of patients diagnosed with psychopathic personality disorders in the Broadmoor special hospital.
If you possess the one indispensable skill – battering and blustering your way to the top – incompetence in other areas is no impediment. The former Hewlett-Packard chief executive Carly Fiorina features prominently on lists of the worst US bosses: quite an achievement when you consider the competition. She fired 30,000 workers in the name of efficiency yet oversaw a halving of the company’s stock price. Morale and communication became so bad that she was booed at company meetings. She was forced out, with a $42m severance package. Where is she now? About to launch her campaign as presidential candidate for the Republican party, where, apparently, she is considered a serious contender. It’s the Mitt Romney story all over again.
At university I watched in horror as the grand plans of my ambitious friends dissolved. It took them about a minute, on walking into the corporate recruitment fair, to see that the careers they had pictured – working for Oxfam, becoming a photographer, defending the living world – paid about one fiftieth of what they might earn in the City. They all swore they would leave to follow their dreams after two or three years of making money; none did. They soon adjusted their morality to their circumstances. One, a firebrand who wanted to nationalise the banks and overthrow capitalism, plunged first into banking, then into politics. Claire Perry now sits on the frontbench of the Conservative party. Flinch once, at the beginning of your career, and they will have you for life. The world is wrecked by clever young people making apparently sensible choices.
The inverse relationship doesn’t always hold. There are plenty of useless, badly paid jobs, and a few useful, well-paid jobs. But surgeons and film directors are greatly outnumbered by corporate lawyers, lobbyists, advertisers, management consultants, financiers and parasitic bosses consuming the utility their workers provide. As the pay gap widens – chief executives in the UK took 60 times as much as the average worker in the 1990s and 180 times as much today – the uselessness ratio is going through the roof I propose a name for this phenomenon: klepto-remuneration.
There is no end to this theft except robust government intervention: a redistribution of wages through maximum ratios and enhanced taxation. But this won’t happen until we challenge the infrastructure of justification, built so carefully by politicians and the press. Our lives are damaged not by the undeserving poor but by the undeserving rich.
Tuesday, 9 December 2014
OECD report rejects trickle-down economics
Revealed: how the wealth gap holds back economic growth
OECD report rejects trickle-down economics, noting ‘sizeable and statistically negative impact’ of income inequality
- Larry Elliott, economic editor
- The Guardian,
The west’s leading economic thinktank on Tuesday dismissed the concept of trickle-down economics as it found that the UK economy would have been more than 20% bigger had the gap between rich and poor not widened since the 1980s.
Publishing its first clear evidence of the strong link between inequality and growth, the Paris-based Organisation for Economic Cooperation and Development proposed higher taxes on the rich and policies aimed at improving the lot of the bottom 40% of the population, identified by Ed Miliband as the “squeezed middle”.
Trickle-down economics was a central policy for Margaret Thatcher and Ronald Reagan in the 1980s, with the Conservatives in the UK and the Republicans in the US confident that all groups would benefit from policies designed to weaken trade unions and encourage wealth creation.
The OECD said that the richest 10% of the population now earned 9.5 times the income of the poorest 10%, up from seven times in the 1980s. However, the result had been slower, not faster, growth.
It concluded that “income inequality has a sizeable and statistically negative impact on growth, and that redistributive policies achieving greater equality in disposable income has no adverse growth consequences.
“Moreover, it [the data collected from the thinktank’s 34 rich country members] suggests it is inequality at the bottom of the distribution that hampers growth.”
According to the OECD, rising inequality in the two decades after 1985 shaved nine percentage points off UK growth between 1990 and 2000. The economy expanded by 40% during the 1990s and 2000s but would have grown by almost 50% had inequality not risen. Reducing income inequality in Britain to the level of France would increase growth by nearly 0.3 percentage points over a 25-year period, with a cumulated gain in GDP at the end of the period in excess of 7%.
“These findings have relevant implications for policymakers concerned about slow growth and rising inequality,” the paper said.
“On the one hand it points to the importance of carefully assessing the potential consequences of pro-growth policies on inequality: focusing exclusively on growth and assuming that its benefits will automatically trickle down to the different segments of the population may undermine growth in the long run, in as much as inequality actually increases.
“On the other hand, it indicates that policies that help limiting or – ideally – reversing the long-run rise in inequality would not only make societies less unfair, but also richer.”
Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand, nearly nine points in the UK, Finland and Norway, and between six and seven points in the United States, Italy and Sweden.
The thinktank said governments should consider rejigging tax systems to make sure wealthier individuals pay their fair share. It suggested higher top rates of income tax, scrapping tax breaks that tend to benefit higher earners and reassessing the role of all forms of taxes on property and wealth.
However, the OECD said, its research showed “it is even more important to focus on inequality at the bottom of the income distribution. Government transfers have an important role to play in guaranteeing that low-income households do not fall further back in the income distribution”.
The authors said: “It is not just poverty (ie the incomes of the lowest 10% of the population) that inhibits growth … policymakers need to be concerned about the bottom 40% more generally – including the vulnerable lower-middle classes at risk of failing to benefit from the recovery and future growth. Anti-poverty programmes will not be enough.”
Angel GurrÃa, the OECD’s secretary general, said: “This compelling evidence proves that addressing high and growing inequality is critical to promote strong and sustained growth and needs to be at the centre of the policy debate. Countries that promote equal opportunity for all from an early age are those that will grow and prosper.”
Monday, 17 March 2014
Tony Benn was defiantly, stroppily, youthfully socialist to the very end
Mark Steel in The Independent
The older you get, apparently, the more you abandon the daft socialist ideas of your youth to become sensible and conservative. There will never be a greater retort to this miserable myth than the life of Tony Benn.
Because somehow he became more defiantly, inspiringly, stroppily, youthfully socialist every year up to 88. If he’d lasted to 90 he’d have been on the news wearing a green Mohican and getting arrested for chaining himself to a banker.
Even more remarkable is that as he became younger with age, so did his audience. In a time when socialist groups despair at how to attract the under-50s, Benn regularly packed out a tent that held 3,000 people at Glastonbury. Anyone passing by outside who heard the roars and squeals as he appeared must have assumed the Arctic Monkeys were making a surprise appearance, but it was a man in his 80s, clambering on stage with a flask of tea.
Then he’d start with: “I’m pleased to say I’ve decided to give up protesting. Instead of protesting I’m going to take up DEMANDING instead.” And teenagers would shriek and raise their arms above their heads and clap, belly button studs wobbling as he recounted the first time he met Clement Attlee.
He filled theatres as well. In places like Telford, the box office manager would say: “The shows that went fastest this year were Tony Benn and a Led Zeppelin tribute act.” Maybe other politicians will try to copy him, before wondering why tickets aren’t selling well for “An evening with David Blunkett”.
He was introduced to socialism during the Second World War, when it became mainstream to suggest that if the nation could collectively pool its resources to fight, it should be able to do the same to provide health and housing. The introduction of the welfare state, along with the movements that won independence in the colonies, must have confirmed for him that mass movements, combined with parliament, can transform society in favour of the poorest people.
Parliament, he insisted, was the pinnacle of democracy, the triumph of radical thinking that went in a line from the early Christians, through the Levellers in the English Civil War and up to the Labour Party (although he’d have told Jesus, “I don’t think you should turn that water into wine as I’ve seen the damage alcohol can do.”).
These ideas can’t have seemed too controversial until the 1970s, when the response to global economic chaos was to blame the unions, taxes and state ownership of anything, and instead hand unrestrained power to big business and the free market.
But Benn stuck to his principles, so Conservatives called him the “most dangerous man in Britain”. He must have consistently disappointed opponents who portrayed him as a figure of evil, as they tried to convince people: “You can tell he’s trying to wreck the country: he’s got a gently persuasive lilting tone and he’s addicted to tea. He’s obviously worse than Stalin.”
Maybe it was the simplicity of his ideals that made him so endearing. If someone suggested immigration was causing our woes, he’d reply that it was odd how a businessman can move his business overseas, but the workforce shouldn’t be allowed to follow it to stay in work.
To anyone who argued that we don’t act collectively any more, he’d recount the day he was on a train that broke down for hours, and “up until then we’d all been individuals on a privatised train, but now we helped each other, lending phones and sharing sandwiches, and by the time it arrived it was a socialist train”.
But despite his reverence for Parliament, in some ways it was once he left it that he became most powerful. With an unfathomable energy he spoke at several events a day. Union meetings, anti-war benefits, campaigns against library closures – he was everywhere. If he was on Tony Blair’s asking rate for speeches he’d have been a billionaire within a month.
It wouldn’t have been surprising to find he was addressing a union conference, then speaking on the Iraq war at a children’s party, before giving a lecture about the peasants’ revolt at a sado-masochists AGM before nipping up to Leicester to appear on Question Time.
I did some filming with him once at seven in the morning, the only time he could do it. I got a taxi to his house, driven by a Pakistani man in a rage about the Iraq war. “Politicians are all crooks,” he kept saying, “The only one I trust is Tony Benn.” “Well,” I said, “strangely, we’re going to his house.” “Tony Benn? House of Tony Benn? We go to house of Tony Benn? Not Tony Benn?” he said.
Tony Benn in 1964 (PA)
So when we arrived I asked Tony Benn: “Would you mind meeting the taxi driver, he’s a huge fan of yours.” Then I went in with the driver who yelped and clasped Benn’s hand, saying “This is such a good day. Oh such a good day. My friends will not believe this.”
And Benn said: “Well I don’t know about that but I’ve got the kettle on if you’d like a cup of tea.”
This seemed to be his life. The more unassuming and down to earth he was, the more he acquired the reputation that narcissists crave.
In later years, when the establishment were unable to damage him or his reputation with their claims of his inherent evil, they labelled him a national sweetheart, and if he’d wanted to, I’m sure he could have presented Countdown and got to the final of Strictly Come Dancing.
But he ignored his new image, almost baffled by the acclaim he drew, and continued to make the case that a world in which the richest 400 have the same wealth as the poorest 2 billion is probably a bit wrong, and could do with putting right. And he did it to the end, in such a way that made anyone listening believe it was possible.
Interviewed a few weeks ago, he was asked how he’d like to be remembered. He said: “With the words ‘he inspired us’.”
Well he’s got no worries there. No worries at all.
Wednesday, 9 January 2013
There is a problem with welfare, but it's not 'shirkers'
This economic model isn't delivering jobs or decent wages. The real scroungers are greedy landlords and employers
The Conservatives back workers not shirkers, the prime minister declared, as George Osborne pictured an honest shift worker passing the closed blinds of a skiver "sleeping off a life on benefits". Tory MP John Redwood insisted betting firms target deprived areas because the poor have too much "time on their hands".
Having softened up their audience with a press campaign of tales of "scroungers" and fraudsters, the Tories couldn't have been clearer about their purpose: to turn the low paid against the unemployed, just as they've tried to set private sector against public sector workers – and the Victorians separated the deserving from the undeserving poor.
Having drawn their toxic dividing line, the game has then been to put Labour on the wrong side, in the scroungers' camp. Hence the Conservative poster campaign in advance of yesterday's Commons vote on the coalition plan to make the first general real terms benefit cuts since the 1930s, declaring: "Today Labour are voting to increase benefits by more than workers' wages."
But the signs are that the skivers versus strivers talk has been backfiring. Even Cameron's dog-whistle spinman, Lynton Crosby, has been getting worried about the tone. So no wonder Nick Clegg, who claims to be on a journey to "the centre ground", wants to dissociate his Lib Dems from the nakedly nasty party.
As the impact of this year's benefit squeeze hits home, the backlash is likely to grow. Far from targeting "shirkers", the three-year benefit and tax credit cap doesn't even mainly target the unemployed. More than 60% of those who will lose out are in work.
Among the "scroungers" Cameron will be clamping down on are 300,000 nurses, 150,000 teachers and 40,000 soldiers. The real terms cut will hit the poorest, lone parents, the disabled and women hardest, according to the government's own assessment. It will increase inequality and help tip hundreds of thousands of children into poverty.
Just as 8,000 millionaires are about to get an average tax cut of over £107,000 and food banks are booming, the coalition is driving through a benefit squeeze that swamps the rise in tax allowances and targets the most vulnerable – already subject to a string of other cuts and new charges, from disability allowances to council tax.
Ministers claim the end of child benefit for the better-off in some way balances the attack on means-tested benefits. But not only is child benefit set apart in being paid overwhelmingly to women: like all universal benefits it helps to create a common social interest, can be offset with progressive taxation and becomes far easier to hack away at once restricted to the lower paid.
Of course, these cuts are being made in the name of deficit reduction. In reality, even if the logic of the coalition's austerity programme is accepted, there are plenty of other ways to find the savings made from capping benefit and tax credits (even the Blairite prince over the water, David Miliband, today denounced the cap and floated lower rate pension tax relief instead).
But austerity is failing and the underlying deficit growing. Even the IMF has now admitted it underestimated the disastrous impact of austerity programmes on growth and jobs. And cuts in the incomes of the poorest in any economy will only depress demand when the opposite is urgently needed – including to shrink the deficit.
The Tories feel safe attacking social security because a long-running media campaign has fostered a wildly inaccurate welfare mythology. On average, people think 27% of the welfare budget is claimed fraudulently, when the government's own estimate is 0.7% – or around £1bn, compared to an estimated £70bn worth of tax evasion. Most payments go to pensioners, and, far from soaring ahead of wages, unemployment benefit has fallen to 11% of average earnings, compared with 22% in 1979.
That's not to say there isn't a problem with welfare. It just isn't the one the political class and media mostly claim it is. Central to the sharp increase in social security costs over the past generation have been rising joblessness and stagnating wages. Since 1980, unemployment has averaged more than three times the postwar rate, while the proportion of those in low-paid jobs has doubled to over 20%.
In other words, welfare has become a prop for the failure of neoliberal capitalism to deliver jobs or decent wages. In Britain, the prop has partly taken the form of subsidising poverty pay through New Labour's tax credits, and exorbitant private rents through a massively expanded housing benefit bill.
That model has now crashed and the costs of systemic failure have ballooned: long-term unemployment has increased by 146% since 2010. What Cameron and Osborne are doing is to kick away props, not from bad employers and greedy landlords – the real welfare scroungers – but from the most deprived when they're needed most.
Labour is right to oppose real benefit cuts and support publicly backed work programmes, but wrong to endorse real terms cuts in public sector pay and private minimum wage schemes. If politicians are serious about cutting the welfare bill – instead of driving claimants deeper into poverty – there are obvious alternatives.
A crash council housebuilding programme, backed with northern European-style rent control, would slash the £21bn a year from the housing benefit bill. A living wage across the economy, combined with strengthened workplace rights, would cut the tax credit and other benefit bills. And both, combined with a public bank-driven national investment programme, would boost growth and shrink the dole bill.
Since this government will be doing nothing of the kind, expect instead the social unrest predicted by northern council leaders in response to plans for 30% cuts in local authority budgets. Polling suggests public opposition to the benefit squeeze will also spread as people find out more about who will bear the brunt. Even the Tories may come to regret their war on the poor.
An Obituary to The Welfare State, 1942-2013.
After decades of public illness, Beveridge's most famous offspring has died
For much of its short but celebrated life, the Welfare
State was cherished by Britons. Instant public affection greeted its
birth and even as it passed away peacefully yesterday morning,
government ministers swore they would do all they could to keep it
alive.
The Welfare State's huge appeal lay in its combination of simplicity and assurance. A safety net to catch those fallen on hard times, come rain or shine, boom or bust, it would be there for all those who had paid in.
Such universality allowed people to project on to it whatever they wished. Welfare State's father, the Liberal William Beveridge, described his offspring as "an attack on Want", one of the five evil giants that had to be slain in postwar Britain. But for future Labour prime minister Clement Attlee, "Social security to us can only mean socialism".
Yet there were critics. Indeed, it is thought that as late as yesterday, an unnamed twentysomething PPE graduate at Policy Exchange was revising a document entitled "What's Wrong with Welfare?" In the end, however, it was not a rightwing think tank that killed Welfare. The proximate cause of death was a change in child benefit from being available to all to a means-tested entitlement. That marked the end of one of the last remaining universal benefits, in turn causing a fatal injury to Welfare.
It is a testimony to Welfare's powerful charm that few immediately accepted its passing. Hours after its official death, bloggers continued to talk as if it were still alive, albeit under grave threat from the perfidious Tories.
But analysts later confirmed that the change to child benefit did indeed mark the death of the Welfare State as originally envisaged by Beveridge: a "contributory" system, where those who paid in during their working lives could count on financial help from the government when in need.
It expired peacefully on Monday, 7 January, just weeks after marking its 70th birthday.
The system had suffered many attacks over the years, from politicians talking of a "welfare trap", government means-testing, and frothy-mouthed journalists reporting isolated cases of benefit fraud.
For many would-be claimants, Welfare had become a ragged system where, however deserving or needy, they weren't poor enough to qualify for benefits, or the cash involved was too small to bother claiming.
Though David Cameron spoke of a "something for nothing" culture, the opposite was closer to the truth: Welfare had become a "nothing for something" system where taxpayers chipped in but got very little back.
This was very different from the scenes that greeted Welfare's birth in 1942. Then, the BBC broadcast in 22 different languages the details of Beveridge's social insurance scheme and the Manchester Guardian repeatedly acclaimed it as a "great plan" and a "big and fine thing". The public was enthusiastic, buying more than 635,000 copies of what was formally titled the "Report of the Inter-Departmental Committee on Social Insurance and Allied Services".
Yet the golden period of Welfare really came in the 60s and 70s as, thanks to the work of Barbara Castle, Jeff Rooker, Audrey Wise and others, pensions and allowances were made more generous and tied to typical earnings.
"If you were poor, you were far less behind than at any other time in contemporary British history," according to Richard Exell, a senior policy officer at the TUC and a campaigner on welfare issues for more than 30 years. "It produced a Britain that was one of the most equal societies in western Europe."
Just before Margaret Thatcher came to power, a single person out of work would get unemployment benefit worth almost 21% of average earnings; last year, jobseeker's allowance was nearly half that, amounting to just over 11%.
Welfare's big decline came in the 1980s, as the Conservatives moved more benefits from available to all to on offer only to the poor. This was justified as making public spending more efficient.
But, according to a famous and much quoted study by Walter Korpi and Joakim Palme, such means-testing is far less effective and more expensive than universal benefits. In a study of 18 rich countries, the academics found that targetting benefits at the poorest usually generated resentment among those just above – and led to smaller entitlements.
This "paradox of redistribution" was certainly observable in Britain, where Welfare retained its status as one of the 20th century's most exalted creations, even while those claiming benefits were treated with ever greater contempt.
"If you look at unemployment and sickness benefit as a proportion of average earnings, then Britain has one of the meanest welfare systems in Europe," says Palme. "Worse than Greece, Bulgaria or Romania."
Some of that same meanness can be seen in the way Welfare was discussed as it moved into its sixth and seventh decades. It was no longer about social security but benefits. Those who received them were no longer unfortunate but "slackers", as Iain Duncan Smith referred to them. A recent study by Declan Gaffney, Ben Baumberg and Kate Bell of 6,600 national newspaper articles on Welfare published between 1995 and 2011 found 29% referred to benefit fraud. The government's own estimate of fraud is that it is less than 1% across all benefit cases.
The death of Welfare does not mean an end to all benefit spending. Instead, it is outlived by its predecessor, Poor Relief, in which only the very poorest will receive government cash. Analysts are unsure about the repercussions.
"I'm not aware of any country that's ever had a combination of Victorian-style poor laws and parliamentary democracy," says Gaffney.
Instead of a book of condolences, there will be a special edition of the Guardian's letters page. In separate tributes, BBC4 will air some respectful but little-watched documentaries; there will also be a truly unbearable edition of The Moral Maze.
The Welfare State's huge appeal lay in its combination of simplicity and assurance. A safety net to catch those fallen on hard times, come rain or shine, boom or bust, it would be there for all those who had paid in.
Such universality allowed people to project on to it whatever they wished. Welfare State's father, the Liberal William Beveridge, described his offspring as "an attack on Want", one of the five evil giants that had to be slain in postwar Britain. But for future Labour prime minister Clement Attlee, "Social security to us can only mean socialism".
Yet there were critics. Indeed, it is thought that as late as yesterday, an unnamed twentysomething PPE graduate at Policy Exchange was revising a document entitled "What's Wrong with Welfare?" In the end, however, it was not a rightwing think tank that killed Welfare. The proximate cause of death was a change in child benefit from being available to all to a means-tested entitlement. That marked the end of one of the last remaining universal benefits, in turn causing a fatal injury to Welfare.
It is a testimony to Welfare's powerful charm that few immediately accepted its passing. Hours after its official death, bloggers continued to talk as if it were still alive, albeit under grave threat from the perfidious Tories.
But analysts later confirmed that the change to child benefit did indeed mark the death of the Welfare State as originally envisaged by Beveridge: a "contributory" system, where those who paid in during their working lives could count on financial help from the government when in need.
It expired peacefully on Monday, 7 January, just weeks after marking its 70th birthday.
The system had suffered many attacks over the years, from politicians talking of a "welfare trap", government means-testing, and frothy-mouthed journalists reporting isolated cases of benefit fraud.
For many would-be claimants, Welfare had become a ragged system where, however deserving or needy, they weren't poor enough to qualify for benefits, or the cash involved was too small to bother claiming.
Though David Cameron spoke of a "something for nothing" culture, the opposite was closer to the truth: Welfare had become a "nothing for something" system where taxpayers chipped in but got very little back.
This was very different from the scenes that greeted Welfare's birth in 1942. Then, the BBC broadcast in 22 different languages the details of Beveridge's social insurance scheme and the Manchester Guardian repeatedly acclaimed it as a "great plan" and a "big and fine thing". The public was enthusiastic, buying more than 635,000 copies of what was formally titled the "Report of the Inter-Departmental Committee on Social Insurance and Allied Services".
Yet the golden period of Welfare really came in the 60s and 70s as, thanks to the work of Barbara Castle, Jeff Rooker, Audrey Wise and others, pensions and allowances were made more generous and tied to typical earnings.
"If you were poor, you were far less behind than at any other time in contemporary British history," according to Richard Exell, a senior policy officer at the TUC and a campaigner on welfare issues for more than 30 years. "It produced a Britain that was one of the most equal societies in western Europe."
Just before Margaret Thatcher came to power, a single person out of work would get unemployment benefit worth almost 21% of average earnings; last year, jobseeker's allowance was nearly half that, amounting to just over 11%.
Welfare's big decline came in the 1980s, as the Conservatives moved more benefits from available to all to on offer only to the poor. This was justified as making public spending more efficient.
But, according to a famous and much quoted study by Walter Korpi and Joakim Palme, such means-testing is far less effective and more expensive than universal benefits. In a study of 18 rich countries, the academics found that targetting benefits at the poorest usually generated resentment among those just above – and led to smaller entitlements.
This "paradox of redistribution" was certainly observable in Britain, where Welfare retained its status as one of the 20th century's most exalted creations, even while those claiming benefits were treated with ever greater contempt.
"If you look at unemployment and sickness benefit as a proportion of average earnings, then Britain has one of the meanest welfare systems in Europe," says Palme. "Worse than Greece, Bulgaria or Romania."
Some of that same meanness can be seen in the way Welfare was discussed as it moved into its sixth and seventh decades. It was no longer about social security but benefits. Those who received them were no longer unfortunate but "slackers", as Iain Duncan Smith referred to them. A recent study by Declan Gaffney, Ben Baumberg and Kate Bell of 6,600 national newspaper articles on Welfare published between 1995 and 2011 found 29% referred to benefit fraud. The government's own estimate of fraud is that it is less than 1% across all benefit cases.
The death of Welfare does not mean an end to all benefit spending. Instead, it is outlived by its predecessor, Poor Relief, in which only the very poorest will receive government cash. Analysts are unsure about the repercussions.
"I'm not aware of any country that's ever had a combination of Victorian-style poor laws and parliamentary democracy," says Gaffney.
Instead of a book of condolences, there will be a special edition of the Guardian's letters page. In separate tributes, BBC4 will air some respectful but little-watched documentaries; there will also be a truly unbearable edition of The Moral Maze.
Saturday, 29 September 2012
The root of Europe's riots
No wonder the protesters are back. They are angry at the backdoor rewriting of the social contract
Throughout the 1980s and 90s, when many developing countries were in crisis and borrowing money from the International Monetary Fund, waves of protests in those countries became known as the "IMF riots". They were so called because they were sparked by the fund's structural adjustment programmes, which imposed austerity, privatisation and deregulation.
The IMF complained that calling these riots thus was unfair, as it had not caused the crises and was only prescribing a medicine, but this was largely self-serving. Many of the crises had actually been caused by the asset bubbles built up following IMF-recommended financial deregulation. Moreover, those rioters were not just expressing general discontent but reacting against the austerity measures that directly threatened their livelihoods, such as cuts in subsidies to basic commodities such as food and water, and cuts in already meagre welfare payments.
The IMF programme, in other words, met such resistance because its designers had forgotten that behind the numbers they were crunching were real people. These criticisms, as well as the ineffectiveness of its economic programme, became so damaging that the IMF has made a lot of changes in the past decade or so. It has become more cautious in pushing for financial deregulation and austerity programmes, renamed its structural adjustment programmes as poverty reduction programmes, and has even (marginally) increased the voting shares of the developing countries in its decision-making.
Given these recent changes in the IMF, it is ironic to see the European governments inflicting an old-IMF-style programme on their own populations. It is one thing to tell the citizens of some faraway country to go to hell but it is another to do the same to your own citizens, who are supposedly your ultimate sovereigns. Indeed, the European governments are out-IMF-ing the IMF in its austerity drive so much that now the fund itself frequently issues the warning that Europe is going too far, too fast.
The threat to livelihoods has reached such a dimension that renewed bouts of rioting are now rocking Greece, Spain and even the usually quieter Portugal. In the case of Spain, its national integrity is threatened by the separatist demand made by the Catalannationalists, who think the austerity policy is unfairly reducing the region's autonomy.
Even if these and other European countries (for other countries have not been free of protests against austerity programmes, such as Britain's university fees riot and the protests by Italy's "recession widows") survive this social unrest through a mixture of heavy-handed policing and political delaying tactics, recent events raise a very serious question about the nature of European politics.
What has been happening in Europe – and indeed the US in a more muted and dispersed form – is nothing short of a complete rewriting of the implicit social contracts that have existed since the end of the second world war. In these contracts, renewed legitimacy was bestowed on the capitalist system, once totally discredited following the great depression. In return it provided a welfare state that guarantees minimum provision for all those burdens that most citizens have to contend with throughout their lives – childcare, education, health, unemployment, disability and old age.
Of course there is nothing sacrosanct about any of the details of these social contracts. Indeed, the contracts have been modified on the margins all the time. However, the rewriting in many European countries is an unprecedented one. It is not simply that the scope and the speed of the cuts are unusually large. It is more that the rewriting is being done through the back door.
Instead of it being explicitly cast as a rewriting of the social contract, changing people's entitlements and changing the way the society establishes its legitimacy, the dismembering of the welfare state is presented as a technocratic exercise of "balancing the books". Democracy is neutered in the process and the protests against the cuts are dismissed. The description of the externally imposed Greek and Italian governments as "technocratic" is the ultimate proof of the attempt to make the radical rewriting of the social contract more acceptable by pretending that it isn't really a political change.
The danger is not only that these austerity measures are killing the European economies but also that they threaten the very legitimacy of European democracies – not just directly by threatening the livelihoods of so many people and pushing the economy into a downward spiral, but also indirectly by undermining the legitimacy of the political system through this backdoor rewriting of the social contract. Especially if they are going to have to go through long tunnels of economic difficulties in coming years, and in the context of global shifts in economic power balance and of severe environmental challenges, European countries can ill afford to have the legitimacy of their political systems damaged in this way.
Wednesday, 7 December 2011
NIMBY - the death of altruism
With little but economic gloom on the horizon, David Cameron likes to
appeal to Britain's better instincts, insisting: "We're all in this
together." Whether the average citizen is listening to the Prime
Minister's entreaties is open to doubt: Britons appear to be more
selfish and less interested in the common good than ever before.
The latest British Social Attitudes report suggests that levels of
altruism are falling in these straitened times. People are hostile to
housebuilding in their neighbourhoods, less likely to make personal
sacrifices to protect the environment and increasingly resistant to
paying more for hospitals and schools.
They are also sceptical about the Government's ability to change things for the better, with a growing belief that is down to individuals to sort out their problems for themselves. Support for tax rises to boost spending on services such as health and education has fallen to 31 per cent – half of the 63 per cent of people in favour just nine years ago.
The number willing to pay higher prices to safeguard the environment, such as by buying Fair Trade goods, has fallen from 43 per cent in 2001 to 26 per cent today, while the proportion prepared to pay more tax for the same reason is down from 31 per cent to 22 per cent.
Researchers also uncovered evidence of an entrenched "not in my backyard" mentality over housebuilding, with 45 per cent of people opposing any new development near them, compared with 30 per cent in favour. Opposition is strongest in areas where property is in shortest supply – 58 per cent in outer London and 50 per cent in the South-east of England.
The survey, now in its 29th year, acknowledged that three-quarters of the public believe the income gap between rich and poor is too large. Yet only 35 per cent believe the Coalition should redistribute more to lessen the disparity.
Paradoxically, 54 per cent of the public believe jobless benefits are too high and discourage the unemployed from finding work, up from 35 per cent in 1983, the first year of the survey. And although people were concerned about child poverty levels, 63 per cent pinned some of the blame for the problem on parents who "don't want to work".
The survey, by the independent social research institute NatCen, found Britons increasingly relaxed about private healthcare. In 1999, 38 per cent said it was wrong; today the figure has fallen to 24 per cent.
45 Percentage of Britons who oppose any new development near their homes. In outer London the figure is 58 per cent.
26 Percentage of people willing to pay more for ethical goods to save the environment – down from 43 per cent 10 years ago.
They are also sceptical about the Government's ability to change things for the better, with a growing belief that is down to individuals to sort out their problems for themselves. Support for tax rises to boost spending on services such as health and education has fallen to 31 per cent – half of the 63 per cent of people in favour just nine years ago.
The number willing to pay higher prices to safeguard the environment, such as by buying Fair Trade goods, has fallen from 43 per cent in 2001 to 26 per cent today, while the proportion prepared to pay more tax for the same reason is down from 31 per cent to 22 per cent.
Researchers also uncovered evidence of an entrenched "not in my backyard" mentality over housebuilding, with 45 per cent of people opposing any new development near them, compared with 30 per cent in favour. Opposition is strongest in areas where property is in shortest supply – 58 per cent in outer London and 50 per cent in the South-east of England.
The survey, now in its 29th year, acknowledged that three-quarters of the public believe the income gap between rich and poor is too large. Yet only 35 per cent believe the Coalition should redistribute more to lessen the disparity.
Paradoxically, 54 per cent of the public believe jobless benefits are too high and discourage the unemployed from finding work, up from 35 per cent in 1983, the first year of the survey. And although people were concerned about child poverty levels, 63 per cent pinned some of the blame for the problem on parents who "don't want to work".
The survey, by the independent social research institute NatCen, found Britons increasingly relaxed about private healthcare. In 1999, 38 per cent said it was wrong; today the figure has fallen to 24 per cent.
45 Percentage of Britons who oppose any new development near their homes. In outer London the figure is 58 per cent.
26 Percentage of people willing to pay more for ethical goods to save the environment – down from 43 per cent 10 years ago.
Friday, 28 October 2011
Consumption is the real problem, not population growth.
Beyond the headlines from the UN population report lies a clear message: consumption is still a far bigger threat to the planet
By George Monbiot
It must rank among the most remarkable events in recent human
history. In just 60 years, the global average number of children each
woman bears has fallen from 6 to 2.5. This is an astonishing triumph for women's empowerment, and whatever your position on population growth, it is something we should celebrate.
But this decline in fertility, according to the United Natinos report published on Wednesday, is not the end of the story. It has also raised its estimate of global population growth. Rather than peaking at about 9 billion in the middle of this century, the UN says that human numbers will reach some 10 billion by 2100, and continue growing beyond that point.
That's the middle scenario. The highest of its range of estimates is an astonishing 15.8 billion by 2100. If this were correct, population would be a much greater problem – for both the environment and human development – than we had assumed. It would oblige me to change my views on yet another subject. But fortunately for my peace of mind, and, rather more importantly, for the prospects of everyone on earth, it is almost certainly baloney.
Writing in the journal Nature in May, Fred Pearce pointed out that the UN's revision arose not from any scientific research or analysis, but from what appeared to be an arbitrary decision to change one of the inputs it fed into its model. Its previous analysis was based on the assumption that the average number of children per woman would fall to 1.85 worldwide by 2100. But this year it changed the assumption to 2.1. This happens to be the population replacement rate: the point at which reproduction contributes to neither a fall nor a rise in the number of people.
The UN failed to explain this changed assumption, which appears to fly in the face of current trends, or to show why fertility decline should suddenly stop when it hit replacement level, rather than continuing beyond that point, as has happened to date in all such populations. I expected yesterday's report to contain the explanation, but I was wrong: it appears to have plucked its fertility figure out of the air.
Even so, even if we're to assume that the old figures are more realistic than the new ones, there's a problem. As the new report points out, "the escape from poverty and hunger is made more difficult by rapid population growth". It also adds to the pressure on the biosphere. But how big a problem is it?
If you believe the rich, elderly white men who dominate the population debate, it is the biggest one of all. In 2009 for example, a group of US billionaires met to decide which threat to the planet most urgently required their attention. Who'd have guessed? These men, who probably each consume as many of the world's resources in half an hour as the average African consumes in a lifetime, decided that it was population.
Population is the issue you blame if you can't admit to your own impacts: it's not us consuming, it's those brown people reproducing. It seems to be a reliable rule of environmental politics that the richer you are, the more likely you are to place population growth close to the top of the list of crimes against the planet.
The new report, inflated though its figures seem to be, will gravely disappoint the population obsessives. It cites Paul Murtaugh of Oregon State University, whose research shows that:
This should not prevent us from strongly supporting the policies which will cause population to peak sooner rather than later. Sex education, the report shows, is crucial, as is access to contraception and the recognition of women's rights and improvement in their social status. All these have been important factors in the demographic transition the world has seen so far. We should also press for a better distribution of wealth: escaping from grinding poverty is another of the factors which have allowed women to have fewer children. The highly unequal system sustained by the rich white men who fulminate about population is one of the major reasons for population growth.
All this puts conservatives in a difficult position. They want to blame the poor for the environmental crisis by attributing it to population growth. Yet some of them oppose all the measures – better and earlier sex education, universal access to contraception (for teenagers among others), stronger rights for women, the redistribution of wealth – that are likely to reduce it.
And beyond these interventions, what do they intend to do about population growth? As the UN report points out:
What this means is that even if all the measures I've mentioned here – education, contraception, rights, redistribution – were widely deployed today, there will still be a population bulge, as a result of the momentum generated 60 years ago. So what do they propose? Compulsory sterilisation? Mass killing? If not, they had better explain their programme.
Yes, population growth contributes to environmental problems. No, it is not the decisive factor. Even the availability of grain is affected more by rising livestock numbers and the use of biofuels – driven, again by consumption – than by human population growth.
Of course we should demand that governments help women regain control over their bodies. But beyond that there's little that can be done. We must instead decide how best to accommodate human numbers which will, at least for the next four decades, continue to rise.
www.monbiot.com
But this decline in fertility, according to the United Natinos report published on Wednesday, is not the end of the story. It has also raised its estimate of global population growth. Rather than peaking at about 9 billion in the middle of this century, the UN says that human numbers will reach some 10 billion by 2100, and continue growing beyond that point.
That's the middle scenario. The highest of its range of estimates is an astonishing 15.8 billion by 2100. If this were correct, population would be a much greater problem – for both the environment and human development – than we had assumed. It would oblige me to change my views on yet another subject. But fortunately for my peace of mind, and, rather more importantly, for the prospects of everyone on earth, it is almost certainly baloney.
Writing in the journal Nature in May, Fred Pearce pointed out that the UN's revision arose not from any scientific research or analysis, but from what appeared to be an arbitrary decision to change one of the inputs it fed into its model. Its previous analysis was based on the assumption that the average number of children per woman would fall to 1.85 worldwide by 2100. But this year it changed the assumption to 2.1. This happens to be the population replacement rate: the point at which reproduction contributes to neither a fall nor a rise in the number of people.
The UN failed to explain this changed assumption, which appears to fly in the face of current trends, or to show why fertility decline should suddenly stop when it hit replacement level, rather than continuing beyond that point, as has happened to date in all such populations. I expected yesterday's report to contain the explanation, but I was wrong: it appears to have plucked its fertility figure out of the air.
Even so, even if we're to assume that the old figures are more realistic than the new ones, there's a problem. As the new report points out, "the escape from poverty and hunger is made more difficult by rapid population growth". It also adds to the pressure on the biosphere. But how big a problem is it?
If you believe the rich, elderly white men who dominate the population debate, it is the biggest one of all. In 2009 for example, a group of US billionaires met to decide which threat to the planet most urgently required their attention. Who'd have guessed? These men, who probably each consume as many of the world's resources in half an hour as the average African consumes in a lifetime, decided that it was population.
Population is the issue you blame if you can't admit to your own impacts: it's not us consuming, it's those brown people reproducing. It seems to be a reliable rule of environmental politics that the richer you are, the more likely you are to place population growth close to the top of the list of crimes against the planet.
The new report, inflated though its figures seem to be, will gravely disappoint the population obsessives. It cites Paul Murtaugh of Oregon State University, whose research shows that:
"An extra child born today in the United States, would, down the generations, produce an eventual carbon footprint seven times that of an extra child in China, 55 times that of an Indian child or 86 times that of a Nigerian child."And it draws on a paper published in the Proceedings of the National Academy of Sciences, which makes the first comprehensive assessment of how changes in population affect carbon dioxide emissions. It concludes:
"Slowing population growth could provide 16-19% of the emissions reductions suggested to be necessary by 2050 to avoid dangerous climate change."In other words, it can make a contribution. But the other 81-84% will have to come from reducing consumption and changing technologies. The UN report concludes that "even if zero population growth were achieved, that would barely touch the climate problem".
This should not prevent us from strongly supporting the policies which will cause population to peak sooner rather than later. Sex education, the report shows, is crucial, as is access to contraception and the recognition of women's rights and improvement in their social status. All these have been important factors in the demographic transition the world has seen so far. We should also press for a better distribution of wealth: escaping from grinding poverty is another of the factors which have allowed women to have fewer children. The highly unequal system sustained by the rich white men who fulminate about population is one of the major reasons for population growth.
All this puts conservatives in a difficult position. They want to blame the poor for the environmental crisis by attributing it to population growth. Yet some of them oppose all the measures – better and earlier sex education, universal access to contraception (for teenagers among others), stronger rights for women, the redistribution of wealth – that are likely to reduce it.
And beyond these interventions, what do they intend to do about population growth? As the UN report points out:
"Considerable population growth continues today because of the high numbers of births in the 1950s and 1960s, which have resulted in larger base populations with millions of young people reaching their reproductive years over succeeding generations."In other words, it's a hangover from an earlier period. It has been compounded by another astonishing transformation: since the 1950s, global life expectancy has risen from 48 to 68.
What this means is that even if all the measures I've mentioned here – education, contraception, rights, redistribution – were widely deployed today, there will still be a population bulge, as a result of the momentum generated 60 years ago. So what do they propose? Compulsory sterilisation? Mass killing? If not, they had better explain their programme.
Yes, population growth contributes to environmental problems. No, it is not the decisive factor. Even the availability of grain is affected more by rising livestock numbers and the use of biofuels – driven, again by consumption – than by human population growth.
Of course we should demand that governments help women regain control over their bodies. But beyond that there's little that can be done. We must instead decide how best to accommodate human numbers which will, at least for the next four decades, continue to rise.
www.monbiot.com
Life Among the 1%
By Michael Moore, Open Mike Blog
27 October 11
wenty-two years ago this coming Tuesday, I stood with a group of factory workers, students and the unemployed in the middle of the downtown of my birthplace, Flint, Michigan, to announce that the Hollywood studio, Warner Bros., had purchased the world rights to distribute my first movie, 'Roger & Me.' A reporter asked me, "How much did you sell it for?"
"Three million dollars!" I proudly exclaimed. A cheer
went up from the union guys surrounding me. It was absolutely unheard of
for one of us in the working class of Flint (or anywhere) to receive
such a sum of money unless one of us had either robbed a bank or, by
luck, won the Michigan lottery. On that sunny November day in 1989, it
was like I had won the lottery - and the people I had lived and struggled with in Michigan were thrilled with my success. It was like, one of us had made it,
one of us finally had good fortune smile upon us. The day was filled
with high-fives and "Way-ta-go Mike!"s. When you are from the working
class you root for each other, and when one of you does well, the others
are beaming with pride - not just for that one person's success, but
for the fact that the team had somehow won, beating the system
that was brutal and unforgiving and which ran a game that was rigged
against us. We knew the rules, and those rules said that we factory town
rats do not get to make movies or be on TV talk shows or have our voice
heard on any national stage. We were to shut up, keep our heads down,
and get back to work. If by some miracle one of us escaped and
commandeered a mass audience and some loot to boot - well, holy mother
of God, watch out! A bully pulpit and enough cash to raise a ruckus -
that was an incendiary combination, and it only spelled trouble for
those at the top.
Until that point I had been barely getting by on
unemployment, collecting $98 a week. Welfare. The dole. My car had died
back in April so I had gone seven months with no vehicle. Friends would
take me out to dinner, always coming up with an excuse to celebrate or
commemorate something and then picking up the check so I would not have
to feel the shame of not being able to afford it.
And now, all of a sudden, I had three million bucks!
What would I do with it? There were men in suits making many suggestions
to me, and I could see how those without a strong moral sense of social
responsibility could be easily lead down the "ME" path and quickly
forget about the "WE."
So I made some easy decisions back in 1989:
- I would first pay all my taxes. I told the guy who did my 1040 not to declare any deductions other than the mortgage and to pay the full federal, state and city tax rate. I proudly contributed nearly 1 million dollars for the privilege of being a citizen of this great country.
- Of the remaining $2 million, I decided to divide it up the way I once heard the folksinger/activist Harry Chapin tell me how he lived: "One for me, one for the other guy." So I took half the money - $1 million - and established a foundation to give it all away.
- The remaining million went like this: I paid off all my debts, paid off the debts of some friends and family members, bought my parents a new refrigerator, set up college funds for our nieces and nephews, helped rebuild a black church that had been burned down in Flint, gave out a thousand turkeys at Thanksgiving, bought filmmaking equipment to send to the Vietnamese (my own personal reparations for a country we had ravaged), annually bought 10,000 toys to give to Toys for Tots at Christmas, got myself a new American-made Honda, and took out a mortgage on an apartment above a Baby Gap in New York City.
- What remained went into a simple, low-interest savings account. I made the decision that I would never buy a share of stock (I didn't understand the casino known as the New York Stock Exchange and I did not believe in investing in a system I did not agree with).
- Finally, I believed the concept of making money off your money had created a greedy, lazy class who didn't produce any product, just misery and fear among the populace. They invented ways to buy out companies and then shut them down. They dreamed up schemes to play with people's pension funds as if it were their own money. They demanded companies keep posting record profits (which was accomplished by firing thousands and eliminating health benefits for those who remained). I made the decision that if I was going to earn a living, it would be done from my own sweat and ideas and creativity. I would produce something tangible, something others could own or be entertained by or learn from. My work would create employment for others, good employment with middle class wages and full health benefits.
I went on to make more movies, produce TV series and
write books. I never started a project with the thought, "I wonder how
much money I can make at this?" And by never letting money be the
motivating force for anything, I simply did exactly what I wanted to do.
That attitude kept the work honest and unflinching - and that, in turn I
believe, resulted in millions of people buying tickets to these films,
tuning in to my TV shows, and buying my books.
Which is exactly what has driven the Right crazy when it comes to me. How did
someone from the left get such a wide mainstream audience?! This just
isn't supposed to happen (Noam Chomsky, sadly, will not be booked on The View today,
and Howard Zinn, shockingly, didn't make the New York Times bestseller
list until after he died). That's how the media machine is rigged - you
are not supposed to hear from those who would completely change the
system to something much better. Only wimpy liberals who urge caution
and compromise and mild reforms get to have their say on the op-ed pages
or Sunday morning chat shows.
Somehow, I found a crack through the wall and made it
through. I feel very blessed that I have this life - and I take none of
it for granted. I believe in the lessons I was taught back in Catholic
school - that if you end up doing well, you have an even greater
responsibility to those who don't fare the same. "The last shall be
first and the first shall be last." Kinda commie, I know, but the idea
was that the human family was supposed to divide up the earth's riches
in a fair manner so that all of God's children would have a life with
less suffering.
I do very well - and for a documentary filmmaker, I do extremely well. That, too, drives conservatives bonkers. "You're rich because of capitalism!"
they scream at me. Um, no. Didn't you take Econ 101?
Capitalism is a
system, a pyramid scheme of sorts, that exploits the vast majority so
that the few at the top can enrich themselves more. I make my money the
old school, honest way by making things. Some years I earn a
boatload of cash. Other years, like last year, I don't have a job (no
movie, no book) and so I make a lot less. "How can you claim to be for the poor when you are the opposite of poor?!" It's like asking: "You've never had sex with another man - how can you be for gay marriage?!"
I guess the same way that an all-male Congress voted to give women the
vote, or scores of white people marched with Martin Luther Ling, Jr. (I
can hear these righties yelling back through history: "Hey! You're not black! You're not being lynched! Why are you with the blacks?!").
It is precisely this disconnect that prevents Republicans from
understanding why anyone would give of their time or money to help out
those less fortunate. It is simply something their brain cannot process.
"Kanye West makes millions! What's he doing at Occupy Wall Street?!"
Exactly - he's down there demanding that his taxes be raised. That, to a
right-winger, is the definition of insanity. To everyone else, we are
grateful that people like him stand up, even if and especially because
it is against his own personal financial interest. It is specifically
what that Bible those conservatives wave around demands of those who are
well off.
Back on that November day in 1989 when I sold my first
film, a good friend of mine said this to me: "They have made a huge
mistake giving someone like you a big check. This will make you a very
dangerous man. And it proves that old saying right: 'The capitalist will
sell you the rope to hang himself with if he thinks he can make a buck
off it.'"
P.S. I will go to Oakland tomorrow afternoon to stand with Occupy Oakland against the out-of-control police.
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