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Sunday, 22 November 2009

John Pilger’s 2009 Sydney Peace Award speech: Breaking the Australian silence


18 November 2009


The following speech by renowned journalist and film-maker John Pilger was delivered on November 5 as he accepted the 2009 Sydney Peace Prize. To read more of John Pilger's work, visit www.johnpilger.com

* * *

Thank you all for coming tonight, and my thanks to the City of Sydney and especially to the Sydney Peace Foundation for awarding me the Peace Prize. It's an honour I cherish, because it comes from where I come from.

I am a seventh generation Australian. My great-great grandfather landed not far from here, on November 8th, 1821. He wore leg irons, each weighing four pounds. His name was Francis McCarty. He was an Irishman, convicted of the crime of insurrection and "uttering unlawful oaths".

In October of the same year, an 18-year-old girl called Mary Palmer stood in the dock at Middlesex Gaol and was sentenced to be transported to New South Wales for the term of her natural life. Her crime was stealing in order to live. Only the fact that she was pregnant saved her from the gallows.

She was my great-great grandmother. She was sent from the ship to the Female Factory at Parramatta, a notorious prison where every third Monday, male convicts were brought for a "courting day" — a rather desperate measure of social engineering.

Mary and Francis met that way and were married on October 21, 1823.

Growing up in Sydney, I knew nothing about this. My mother's eight siblings used the word "stock" a great deal. You either came from "good stock" or "bad stock". It was unmentionable that we came from bad stock — that we had what was called "the stain".

One Christmas Day, with all of her family assembled, my mother broached the subject of our criminal origins, and one of my aunts almost swallowed her teeth. "Leave them dead and buried, Elsie!" she said. And we did — until many years later and my own research in Dublin and London led to a television film that revealed the full horror of our "bad stock".

There was outrage.

"Your son", my aunt Vera wrote to Elsie, "is no better than a damn communist". She promised never to speak to us again.

The Australian silence has unique features.

Growing up, I would make illicit trips to La Perouse and stand on the sandhills and look at people who were said to have died off. I would gape at the children of my age, who were said to be dirty, and feckless.

At high school, I read a textbook by the celebrated historian, Russel Ward, who wrote: "We are civilized today and they are not." "They", of course, were the Aboriginal people.

My real Australian education began at the end of the 1960s when Charlie Perkins and his mother, Hetti, took me to the Aboriginal compound at Jay Creek in the Northern Territory. We had to smash down the gate to get in.

The shock at what I saw is unforgettable. The poverty. The sickness. The despair. The quiet anger. I began to recognise and understand the Australian silence.

Tonight, I would like to talk about this silence: about how it affects our national life, the way we see the world, and the way we are manipulated by great power, which speaks through an invisible government of propaganda that subdues and limits our political imagination and ensures we are always at war — against our own first people and those seeking refuge, or in someone else's country.

Last July, Prime Minister Kevin Rudd said this, and I quote: "It's important for us all to remember here in Australia that Afghanistan has been a training ground for terrorists worldwide, a training ground also for terrorists in South-East-Asia, reminding us of the reasons that we are in the field of combat and reaffirming our resolve to remain committed to that cause."

There is no truth in this statement. It is the equivalent of his predecessor John Howard's lie that Saddam Hussein had weapons of mass destruction.

Bombing Afghanistan

Shortly before Kevin Rudd made that statement, American planes bombed a wedding party in Afghanistan. At least 60 people were blown to bits, including the bride and groom and many children. That was the fifth wedding party attacked, in our name.

The prime minister was standing outside a church on a Sunday morning when he made his statement. No reporter challenged him. No one said the war was a fraud: that it began as an American vendetta following 9/11, in which not a single Afghan was involved.

No one put it to Kevin Rudd that our perceived enemy in Afghanistan were introverted tribesmen who had no quarrel with Australia and didn't give a damn about south-east Asia and just wanted the foreign soldiers out of their country.

Above all, no one said: "Prime Minister, there is no war on terror. It's a hoax. But there is a war of terror waged by governments, including the Australian government, in our name."

That wedding party, prime minister, was blown to bits by one of the latest smart weapons, such as the Hellfire bomb that sucks the air out of the lungs. In our name.

During the First World War, the British prime minister David Lloyd George confided to the editor of the Manchester Guardian: "If people really knew [the truth], the war would be stopped tomorrow. But of course they don't know and they can't know."

What has changed? Quite a lot actually. As people have become more aware, propaganda has become more sophisticated.

One of the founders of modern propaganda was Edward Bernays, an American who believed that people in free societies could be lied to and regimented without them realising. He invented a euphemism for propaganda — "public relations", or PR.

"What matters", he said, "is the illusion." Like Kevin Rudd's stage-managed press conferences outside his church, what matters is the illusion. The symbols of Anzac are constantly manipulated in this way. Marches. Medals. Flags. The pain of a fallen soldier's family.

Serving in the military, says the prime minister, is Australia's highest calling. The squalor of war, the killing of civilians has no reference. What matters is the illusion.

Ensuring complicity

The aim is to ensure our silent complicity in a war of terror and in a massive increase in Australia's military arsenal. Long-range cruise missiles are to be targeted at our neighbours. The Rudd government and the Pentagon have launched a competition to build military robots which, it is said, will do the "army's dirty work" in "urban combat zones".

What urban combat zones? What dirty work?

Silence.

"I confess", wrote Lord Curzon, viceroy of India, over a century ago, "that countries are pieces on a chessboard upon which is being played out a great game for the domination of the world."

We Australians have been in the service of the Great Game for a very long time. Do the young people who wrap themselves in the flag at Gallipoli every April understand that only the lies have changed — that sanctifying bloody sacrifice in colonial invasions is meant to prepare us for the next one?

When [former] prime minister Robert Menzies sent Australian soldiers to Vietnam in the 1960s, he described them as a "training team", requested by a beleaguered government in Saigon. It was a lie.

A senior official of the Department of External Affairs wrote this secret truth: "Although we have stressed the fact publicly that our assistance was given in response to an invitation by the government of South Vietnam, our offer was in fact made following a request from the United States government."

Two versions. One for us, one for them.

Menzies spoke incessantly about "the downward thrust of Chinese communism". What has changed? Outside the church, Kevin Rudd said we were in Afghanistan to stop another downward thrust. Both were lies.

During the Vietnam War, the Department of Foreign Affairs made a rare complaint to Washington. They complained that the British knew more about America's objectives than its committed Australian ally. An assistant secretary of state replied. "We have to inform the British to keep them on side", he said. "You are with us, come what may."

How many more wars are we to be suckered into before we break our silence?

How many more distractions must we, as a people, endure before we begin the job of righting the wrongs in our own country?

"It's time we sang from the world's rooftops", said Kevin Rudd in opposition, "[that] despite Iraq, America is an overwhelming force for good in the world [and] I look forward to working with the great American democracy, the arsenal of freedom."

Since the Second World War, the arsenal of freedom has overthrown 50 governments, including democracies, and crushed some 30 liberation movements. Millions of people all over the world have been driven out of their homes and subjected to crippling embargos. Bombing is as American as apple pie.

In his acceptance of the 2005 Nobel Prize for Literature, Harold Pinter asked this question: "Why is the systematic brutality, the widespread atrocities, the ruthless suppression of independent thought of Stalinist Russia well known in the West while American criminal actions never happened.

"Nothing ever happened. Even while it was happening it never happened. It didn't matter. It was of no interest."

In Australia, we are trained to respect this censorship by omission. An invasion is not an invasion if "we" do it. Terror is not terror if "we" do it. A crime is not a crime if "we" commit it. It didn't happen. Even while it was happening it didn't happen. It didn't matter. It was of no interest.

In the arsenal of freedom, we have two categories of victims. The innocent people killed in the Twin Towers were worthy victims. The innocent people killed by NATO bombers in Afghanistan are unworthy victims.

Israelis are worthy. Palestinians are unworthy. It gets complicated. Kurds who rose against Saddam Hussein were worthy. But Kurds who rise against the Turkish regime are unworthy. Turkey is a member of NATO. They're in the arsenal of freedom.

The Rudd government justifies its proposals to spend billions on weapons by referring to what the Pentagon calls an "arc of instability" that stretches across the world. Our enemies are apparently everywhere — from China to the Horn of Africa.

In fact, an arc of instability does indeed stretch across the world and is maintained by the United States. The US Air Force calls this "full spectrum dominance". More than 800 American bases are ready for war.

These bases protect a system that allows 1% of humanity to control 40% of wealth: a system that bails out just one bank with $180 billion — that's enough to eliminate malnutrition in the world, and provide education for every child, and water and sanitation for all, and to reverse the spread of malaria.

On September 11, 2001, the United Nations reported that, on that day, 36,615 children had died from poverty. But that was not news.

Journalists and politicians like to say the world changed as a result of the September 11 attacks. In fact, for those countries under attack by the arsenal of freedom, nothing has changed.

What has changed is not news.

According to the great whistleblower Daniel Ellsberg, a military coup has taken place in the United States, with the Pentagon now ascendant in every aspect of foreign policy.

It doesn't matter who is president — George Bush or Barack Obama. Indeed, Obama has stepped up Bush's wars and started his own war in Pakistan. Like Bush, he is threatening Iran, a country Hillary Clinton said she was prepared to "annihilate".

Iran's crime is its independence. Having thrown out America's favourite dictator, the Shah, Iran is the only resource-rich Muslim country beyond American control.

It doesn't occupy anyone else's land and hasn't attacked any country — unlike Israel, which is nuclear-armed and dominates and divides the Middle East on America's behalf.

In Australia, we are not told this. It's taboo. Instead, we dutifully celebrate the illusion of Obama, the global celebrity, the marketing dream. Like Calvin Klein, brand Obama offers the thrill of a new image attractive to liberal sensibilities, if not to the Afghan children he bombs.

This is modern propaganda in action, using a kind of reverse racism — the same way it deploys gender and class as seductive tools. In Barack Obama's case, what matters is not his race or his fine words, but the power he serves.

In an essay for The Monthly entitled "Faith in Politics", Kevin Rudd wrote this about refugees: "The biblical injunction to care for the stranger in our midst is clear. The parable of the Good Samaritan is but one of many which deal with the matter of how we should respond to a vulnerable stranger in our midst.

"We should never forget that the reason we have a UN convention on the protection of refugees is in large part because of the horror of the Holocaust when the West (including Australia) turned its back on the Jewish people of occupied Europe who sought asylum."

Compare that with Rudd's words the other day. "I make absolutely no apology whatsoever", he said, "for taking a hard line on illegal immigration to Australia … a tough line on asylum seekers."

Are we not fed up with this kind of hypocrisy? The use of the term "illegal immigrants" is both false and cowardly. The few people struggling to reach our shores are not illegal. International law is clear — they are legal.

And yet Rudd, like Howard, sends the navy against them and runs what is effectively a concentration camp on Christmas Island. How shaming. Imagine a shipload of white people fleeing a catastrophe being treated like this.

The people in those leaking boats demonstrate the kind of guts Australians are said to admire. But that's not enough for the Good Samaritan in Canberra, as he plays to the same bigotry which, as he wrote in his essay, "turned its back on the Jewish people of occupied Europe".

Why isn't this spelled out? Why have weasel words like "border protection" become the currency of a media crusade against fellow human beings we are told to fear, mostly Muslim people? Why have journalists, whose job is to keep the record straight, become complicit in this campaign?

After all, Australia has had some of the most outspoken and courageous newspapers in the world. Their editors were agents of people, not power. The Sydney Monitor under Edward Smith Hall exposed the dictatorial rule of Governor Darling and helped bring freedom of speech to the colony.

Today, most of the Australian media speaks for power, not people. Turn the pages of the major newspapers; look at the news on TV. Like border protection, we have mind protection.

There's a consensus on what we read, see and hear — on how we should define our politics and view the rest of the world. Invisible boundaries keep out facts and opinions that are unacceptable.

This is actually a brilliant system, requiring no instructions, no self-censorship. Journalists know not what to do. Of course, now and then the censorship is direct and crude.

SBS has banned its journalists from using the phrase "Palestinian land" to describe illegally occupied Palestine. They must describe these territories as "the subject of negotiation". That is the equivalent of somebody taking over your home at the point of a gun and the SBS newsreader describing it as "the subject of negotiation".

In no other democratic country is public discussion of the brutal occupation of Palestine as limited as in Australia. Are we aware of the sheer scale of the crime against humanity in Gaza? Twenty-nine members of one family — babies, grannies — are gunned down, blown up, buried alive, their home bulldozed. Read the United Nations report, written by an eminent Jewish judge, Richard Goldstone.

Those who speak for the arsenal of freedom are working hard to bury the UN report. For only one nation, Israel, has a "right to exist" in the Middle East — only one nation has a right to attack others.

Only one nation has the impunity to run a racist apartheid regime with the approval of the Western world, and with the prime minister and the deputy prime minister of Australia fawning over its leaders.

In Australia, any diversion from this unspoken impunity attracts a campaign of craven personal abuse and intimidation usually associated with dictatorships. But we are not a dictatorship. We are a democracy.

Are we? Or are we a Murdochracy?

Rupert Murdoch set the media war agenda shortly before the invasion of Iraq when he said, "There's going to be collateral damage. And if you really want to be brutal about it, better get it done now."

More than a million people have been killed in Iraq as a result of that invasion — "an episode", according to one study, "more deadly than the Rwandan genocide". In our name.
Are we aware of this in Australia?

I once walked along Mutanabi Street in Baghdad. The atmosphere was wonderful. People sat in cafes, reading. Musicians played. Poets recited. Painters painted. This was the cultural heart of Mesopotamia, the great civilisation to which we in the West owe a great deal, including the written word.

The people I spoke to were both Sunni and Shia, but they called themselves Iraqis. They were cultured and proud.

Today, they are fled or dead. Mutanabi Street has been blown to bits. In Baghdad, the great museums and libraries are looted. The universities are sacked. And people who once took coffee with each other, and married each other, have been turned into enemies.

"Building democracy", said Howard and Bush and Blair.

One of my favourite Harold Pinter plays is Party Time. It's set in an apartment in a city like Sydney. A party is in progress. People are drinking good wine and eating canapes. They seem happy. They are chatting and affirming and smiling. They are stylish and very self aware.

But something is happening outside in the street, something terrible and oppressive and unjust, for which the people at the party share responsibility.

There's a fleeting sense of discomfort, a silence, before the chatting and laughing resumes.

How many of us live in that apartment?

Let me put it another way. I know a very fine Israeli journalist called Amira Hass. She went to live in and report from Gaza. I asked her why she did that.

She explained how her mother, Hannah, was being marched from a cattle train to the Nazi concentration camp at Bergen-Belsen when she saw a group of German women looking at the prisoners, just looking, saying nothing, silent. Her mother never forgot what she called this despicable "looking from the side".

I believe that if we apply justice and courage to human affairs, we begin to make sense of our world. Then, and only then, can we make progress.

However, if we apply justice in Australia, it's tricky, isn't it? Because we are then obliged to break our greatest silence — to no longer "look from the side" in our own country.

In the 1960s, when I first went to South Africa to report apartheid, I was welcomed by decent, liberal people whose complicit silence was the underpinning of that tyranny. They told me that Australians and white South Africans had much in common, and they were right.

The good people of Johannesburg could live within a few kilometres of a community called Alexandra, which lacked the most basic services, the children stricken with disease. But they looked from the side and did nothing.

In Australia, our indifference is different. We have become highly competent at divide and rule: at promoting those black Australians who tell us what we want to hear. At professional conferences their keynote speeches are applauded, especially when they blame their own people and provide the excuses we need.

We create boards and commissions on which sit nice, decent liberal people like the prime minister's wife. And nothing changes.

We certainly don't like comparisons with apartheid South Africa. That breaks the Australian silence.

Near the end of apartheid, black South Africans were being jailed at the rate of 851 per 100,000 of the population. Today, black Australians are being jailed at a national rate that is more than five times higher.

Western Australia jails Aboriginal men at eight times the apartheid figure.

In 1983, Eddie Murray was killed in a police cell in Wee Waa in New South Wales by "a person or persons unknown". That's how the coroner described it. Eddie was a rising rugby league star. But he was black and had to be cut down to size.

Eddie's parents, Arthur and Leila Murray, launched one of the most tenacious and courageous campaigns for justice I've known anywhere. They stood up to authority. They showed grace and patience and knowledge. And they never gave in.

When Leila died in 2003, I wrote a tribute for her funeral. I described her as an Australian hero. Arthur is still fighting for justice. He's in his 60s. He's a respected elder, a hero.

A few months ago, the police in Narrabri offered Arthur a lift home and instead took him for a violent ride in their bullwagon. He ended up in hospital, bruised and battered. That is how Australian heroes are treated.

In the same week the police did this — as they do to black Australians, almost every day — Kevin Rudd said that his government, and I quote, "doesn't have a clear idea of what's happening on the ground" in Aboriginal Australia.

How much information does the prime minister need? How many ideas? How many reports? How many royal commissions? How many inquests? How many funerals? Is he not aware that Australia appears on an international "shame list" for having failed to eradicate trachoma, a preventable disease of poverty that blinds Aboriginal children?

In August this year, the United Nations once again distinguished Australia with the kind of shaming once associated with South Africa. We discriminate on the basis of race. That's it in a nutshell.

This time the UN blew a whistle on the so-called intervention, which began with the Howard government smearing Aboriginal communities in the Northern Territory with allegations of sex slavery and paedophile rings in "unthinkable numbers", according to the minister for indigenous affairs.

In May last year, official figures were released and barely reported.

Out of 7433 Aboriginal children examined by doctors, 39 had been referred to the authorities for suspected abuse. Of those, a maximum of four possible cases were identified. So much for the "unthinkable numbers".

Of course, child abuse does exist, in black Australia and white Australia. The difference is that no soldiers invaded the North Shore; no white parents were swept aside; no white welfare has been "quarantined".

What the doctors found they already knew: that Aboriginal children are at risk — from the effects of extreme poverty and the denial of resources in one of the world's richest countries.

Billions of dollars have been spent — not on paving roads and building houses, but on a war of legal attrition waged against black communities.

I interviewed an Aboriginal leader called Puggy Hunter. He carried a bulging briefcase and he sat in the West Australian heat with his head in his hands.
I said, "You're exhausted".

He replied, "Look, I spend most of my life in meetings, fighting lawyers, pleading for our birthright. I'm just tired to death, mate." He died soon afterwards, in his 40s.

Kevin Rudd has made a formal apology to the First Australians. He spoke fine words. For many Aboriginal people, who value healing, the apology was very important.

However, the Sydney Morning Herald published a remarkably honest editorial. It described the apology as "a piece of political wreckage" that "the Rudd government has moved quickly to clear away … in a way that responds to some of its supporters' emotional needs".

Since the apology, Aboriginal poverty has got worse. The promised housing program is a grim joke. No gap has even begun to be bridged. Instead, the federal government has threatened communities in the Northern Territory that if they don't hand over their precious freehold leases, they will be denied the basic services that we, in white Australia, take for granted.

In the 1970s, Aboriginal communities were granted comprehensive land rights in the Northern Territory, and John Howard set about clawing back these rights with bribery and bullying.

The Labor government is doing the same. You see, there are deals to be done. The Territory contains extraordinary mineral wealth, especially uranium. And Aboriginal land is wanted as a radioactive waste dump. This is very big business, and foreign companies want a piece of the action.

It is a continuation of the darkest side of our colonial history: a land grab.

Where are the influential voices raised against this? Where are the peak legal bodies? Where are those in the media who tell us endlessly how fair-minded we are? Silence.

But let us not listen to their silence. Let us pay tribute to those Australians who are not silent, who don't look from the side — those like Barbara Shaw and Larissa Behrendt, and the Mutitjulu community leaders and their tenacious lawyer George Newhouse, and Chris Graham, the fearless editor of the National Indigenous Times.

And Michael Mansell, Lyle Munro, Gary Foley, Vince Forrester and Pat Dodson, and Arthur Murray.

And let us celebrate Australia's historian of courage and truth, Henry Reynolds, who stood against white supremacists posing as academics and journalists.

And the young people who closed down Woomera detention camp, then stood up to the political thugs who took over Sydney during APEC two years ago.

And good for Ian Thorpe, the great swimmer, whose voice raised against the intervention has yet to find an echo among the pampered sporting heroes in a country where the gap between white and black sporting facilities and opportunity has closed hardly at all.

Silences can be broken, if we will it. In one of the greatest poems of the English language, Percy Shelley wrote this:

"Rise like lions after slumber
In unvanquishable number.
Shake your chains to earth like dew.
Which in sleep has fallen on you.
Ye are many – they are few."

But we need to make haste. An historic shift is taking place. The major Western democracies are moving towards a corporatism.

Democracy has become a business plan, with a bottom line for every human activity, every dream, every decency, every hope. The main parliamentary parties are now devoted to the same economic policies — socialism for the rich, capitalism for the poor — and the same foreign policy of servility to endless war.

This is not democracy. It is to politics what McDonalds is to food.

How do we change this? We start by looking beyond the stereotypes and cliches that are fed to us as news. Tom Paine warned long ago that if we were denied critical knowledge, we should storm what he called the Bastille of words. Tom Paine did not have the internet, but the internet on its own is not enough.

We need an Australian glasnost, the Russian word from the Gorbachev era, which broadly means awakening, transparency, diversity, justice, disobedience. It was Edmund Burke who spoke of the press as a Fourth Estate.

I propose a people's Fifth Estate that monitors, deconstructs and counters the official news. In every news room, in every media college, teachers of journalism and journalists themselves need to be challenged about the part they play in the bloodshed, inequity and silence that is so often presented as normal.

The public are not the problem. It's true some people don't give a damn — but millions do, as I know from the responses to my own films. What people want is to be engaged — a sense that things matter, that nothing is immutable, that unemployment among the young and poverty among the old are both uncivilised and wrong.

What terrifies the agents of power is the awakening of people — of public consciousness.
This is already happening in countries in Latin America, where ordinary people have discovered a confidence in themselves they did not know existed. We should join them before our own freedom of speech is quietly withdrawn and real dissent is outlawed as the powers of the police are expanded.

"The struggle of people against power", wrote Milan Kundera, "is the struggle of memory against forgetting."

In Australia, we have much to be proud of — if only we knew about it and celebrated it.

Since Francis McCarty and Mary Palmer landed here, we've progressed only because people have spoken out, only because the suffragettes stood up, only because the miners of Broken Hill won the world's first 35-hour week, only because pensions and a basic wage and child endowment were pioneered in New South Wales.

In my lifetime, we have become one of the most culturally diverse places on Earth, and it has happened peacefully, by and large. That is a remarkable achievement — until we look for those whose Australian civilisation has seldom been acknowledged, whose genius for survival and generosity and forgiving have rarely been a source of pride.

And yet, they remain, as Henry Reynolds wrote, the whispering in our hearts. For they are what is unique about us.

I believe the key to our self-respect — and our legacy to the next generation — is the inclusion and reparation of the First Australians. In other words, justice.

There's no mystery about what has to be done. The first step is a treaty that guarantees universal land rights and a proper share of the resources of this country.

Only then can we solve, together, issues of health, poverty, housing, education, employment. Only then can we feel a pride that comes not from flags and war. Only then can we become a truly independent nation able to speak out for sanity and justice in the world, and be heard.


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Wednesday, 18 November 2009

Climate Rage


 

By Naomi Klein

17 November, 2009
Rolling Stone


 

One last chance to save the world — for months, that's how the United Nations summit on climate change in Copenhagen, which starts in early December, was being hyped. Officials from 192 countries were finally going to make a deal to keep global temperatures below catastrophic levels. The summit called for "that old comic-book sensibility of uniting in the face of a common danger threatening the Earth," said Todd Stern, President Obama's chief envoy on climate issues. "It's not a meteor or a space invader, but the damage to our planet, to our community, to our children and their children will be just as great."

 

That was back in March. Since then, the endless battle over health care reform has robbed much of the president's momentum on climate change. With Copenhagen now likely to begin before Congress has passed even a weak-ass climate bill co-authored by the coal lobby, U.S. politicians have dropped the superhero metaphors and are scrambling to lower expectations for achieving a serious deal at the climate summit. It's just one meeting, says U.S. Energy Secretary Steven Chu, not "the be-all and end-all."

As faith in government action dwindles, however, climate activists are treating Copenhagen as an opportunity of a different kind. On track to be the largest environmental gathering in history, the summit represents a chance to seize the political terrain back from business-friendly half-measures, such as carbon offsets and emissions trading, and introduce some effective, common-sense proposals — ideas that have less to do with creating complex new markets for pollution and more to do with keeping coal and oil in the ground.

 

Among the smartest and most promising — not to mention controversial — proposals is "climate debt," the idea that rich countries should pay reparations to poor countries for the climate crisis. In the world of climate-change activism, this marks a dramatic shift in both tone and content. American environmentalism tends to treat global warming as a force that transcends difference: We all share this fragile blue planet, so we all need to work together to save it. But the coalition of Latin American and African governments making the case for climate debt actually stresses difference, zeroing in on the cruel contrast between those who caused the climate crisis (the developed world) and those who are suffering its worst effects (the developing world). Justin Lin, chief economist at the World Bank, puts the equation bluntly: "About 75 to 80 percent" of the damages caused by global warming "will be suffered by developing countries, although they only contribute about one-third of greenhouse gases."

 

Climate debt is about who will pick up the bill. The grass-roots movement behind the proposal argues that all the costs associated with adapting to a more hostile ecology — everything from building stronger sea walls to switching to cleaner, more expensive technologies — are the responsibility of the countries that created the crisis. "What we need is not something we should be begging for but something that is owed to us, because we are dealing with a crisis not of our making," says Lidy Nacpil, one of the coordinators of Jubilee South, an international organization that has staged demonstrations to promote climate reparations. "Climate debt is not a matter of charity."

 

Sharon Looremeta, an advocate for Maasai tribespeople in Kenya who have lost at least 5 million cattle to drought in recent years, puts it in even sharper terms. "The Maasai community does not drive 4x4s or fly off on holidays in airplanes," she says. "We have not caused climate change, yet we are the ones suffering. This is an injustice and should be stopped right now."

The case for climate debt begins like most discussions of climate change: with the science. Before the Industrial Revolution, the density of carbon dioxide in the atmosphere — the key cause of global warming — was about 280 parts per million. Today, it has reached 387 ppm — far above safe limits — and it's still rising. Developed countries, which represent less than 20 percent of the world's population, have emitted almost 75 percent of all greenhouse-gas pollution that is now destabilizing the climate. (The U.S. alone, which comprises barely five percent of the global population, contributes 25 percent of all carbon emissions.) And while developing countries like China and India have also begun to spew large amounts of carbon dioxide, the reasoning goes, they are not equally responsible for the cost of the cleanup, because they have contributed only a small fraction of the 200 years of cumulative pollution that has caused the crisis.

 

In Latin America, left-wing economists have long argued that Western powers owe a vaguely defined "ecological debt" to the continent for centuries of colonial land-grabs and resource extraction. But the emerging argument for climate debt is far more concrete, thanks to a relatively new body of research putting precise figures on who emitted what and when. "What is exciting," says Antonio Hill, senior climate adviser at Oxfam, "is you can really put numbers on it. We can measure it in tons of CO₂ and come up with a cost."

 

Equally important, the idea is supported by the United Nations Framework Convention on Climate Change — ratified by 192 countries, including the United States. The framework not only asserts that "the largest share of historical and current global emissions of greenhouse gases has originated in developed countries," it clearly states that actions taken to fix the problem should be made "on the basis of equity and in accordance with their common but differentiated responsibilities."

 

The reparations movement has brought together a diverse coalition of big international organizations, from Friends of the Earth to the World Council of Churches, that have joined up with climate scientists and political economists, many of them linked to the influential Third World Network, which has been leading the call. Until recently, however, there was no government pushing for climate debt to be included in the Copenhagen agreement. That changed in June, when Angelica Navarro, the chief climate negotiator for Bolivia, took the podium at a U.N. climate negotiation in Bonn, Germany. Only 36 and dressed casually in a black sweater, Navarro looked more like the hippies outside than the bureaucrats and civil servants inside the session. Mixing the latest emissions science with accounts of how melting glaciers were threatening the water supply in two major Bolivian cities, Navarro made the case for why developing countries are owed massive compensation for the climate crisis.

 

"Millions of people — in small islands, least-developed countries, landlocked countries as well as vulnerable communities in Brazil, India and China, and all around the world — are suffering from the effects of a problem to which they did not contribute," Navarro told the packed room. In addition to facing an increasingly hostile climate, she added, countries like Bolivia cannot fuel economic growth with cheap and dirty energy, as the rich countries did, since that would only add to the climate crisis — yet they cannot afford the heavy upfront costs of switching to renewable energies like wind and solar.

 

The solution, Navarro argued, is three-fold. Rich countries need to pay the costs associated with adapting to a changing climate, make deep cuts to their own emission levels "to make atmospheric space available" for the developing world, and pay Third World countries to leapfrog over fossil fuels and go straight to cleaner alternatives. "We cannot and will not give up our rightful claim to a fair share of atmospheric space on the promise that, at some future stage, technology will be provided to us," she said.

The speech galvanized activists across the world. In recent months, the governments of Sri Lanka, Venezuela, Paraguay and Malaysia have endorsed the concept of climate debt. More than 240 environmental and development organizations have signed a statement calling for wealthy nations to pay their climate debt, and 49 of the world's least-developed countries will take the demand to Copenhagen as a negotiating bloc.

 

"If we are to curb emissions in the next decade, we need a massive mobilization larger than any in history," Navarro declared at the end of her talk. "We need a Marshall Plan for the Earth. This plan must mobilize financing and technology transfer on scales never seen before. It must get technology onto the ground in every country to ensure we reduce emissions while raising people's quality of life. We have only a decade."

 

A very expensive decade. The World Bank puts the cost that developing countries face from climate change — everything from crops destroyed by drought and floods to malaria spread by mosquito-infested waters — as high as $100 billion a year. And shifting to renewable energy, according to a team of United Nations researchers, will raise the cost far more: to as much as $600 billion a year over the next decade.

 

Unlike the recent bank bailouts, however, which simply transferred public wealth to the world's richest financial institutions, the money spent on climate debt would fuel a global environmental transformation essential to saving the entire planet. The most exciting example of what could be accomplished is the ongoing effort to protect Ecuador's Yasuní National Park. This extraordinary swath of Amazonian rainforest, which is home to several indigenous tribes and a surreal number of rare and exotic animals, contains nearly as many species of trees in 2.5 acres as exist in all of North America. The catch is that underneath that riot of life sits an estimated 850 million barrels of crude oil, worth about $7 billion. Burning that oil — and logging the rainforest to get it — would add another 547 million tons of carbon dioxide to the atmosphere.

 

Two years ago, Ecuador's center-left president, Rafael Correa, said something very rare for the leader of an oil-exporting nation: He wanted to leave the oil in the ground. But, he argued, wealthy countries should pay Ecuador — where half the population lives in poverty — not to release that carbon into the atmosphere, as "compensation for the damages caused by the out-of-proportion amount of historical and current emissions of greenhouse gases." He didn't ask for the entire amount; just half. And he committed to spending much of the money to move Ecuador to alternative energy sources like solar and geothermal.

Largely because of the beauty of the Yasuní, the plan has generated widespread international support. Germany has already offered $70 million a year for 13 years, and several other European governments have expressed interest in participating. If Yasuní is saved, it will demonstrate that climate debt isn't just a disguised ploy for more aid — it's a far more credible solution to the climate crisis than the ones we have now. "This initiative needs to succeed," says Atossa Soltani, executive director of Amazon Watch. "I think we can set a model for other countries."

 

Activists point to a huge range of other green initiatives that would become possible if wealthy countries paid their climate debts. In India, mini power plants that run on biomass and solar power could bring low-carbon electricity to many of the 400 million Indians currently living without a light bulb. In cities from Cairo to Manila, financial support could be given to the armies of impoverished "trash pickers" who save as much as 80 percent of municipal waste in some areas from winding up in garbage dumps and trash incinerators that release planet-warming pollution. And on a much larger scale, coal-fired power plants across the developing world could be converted into more efficient facilities using existing technology, cutting their emissions by more than a third.

But to ensure that climate reparations are real, advocates insist, they must be independent of the current system of international aid. Climate money cannot simply be diverted from existing aid programs, such as primary education or HIV prevention. What's more, the funds must be provided as grants, not loans, since the last thing developing countries need is more debt. Furthermore, the money should not be administered by the usual suspects like the World Bank and USAID, which too often push pet projects based on Western agendas, but must be controlled by the United Nations climate convention, where developing countries would have a direct say in how the money is spent.

 

Without such guarantees, reparations will be meaningless — and without reparations, the climate talks in Copenhagen will likely collapse. As it stands, the U.S. and other Western nations are engaged in a lose-lose game of chicken with developing nations like India and China: We refuse to lower our emissions unless they cut theirs and submit to international monitoring, and they refuse to budge unless wealthy nations cut first and cough up serious funding to help them adapt to climate change and switch to clean energy. "No money, no deal," is how one of South Africa's top environmental officials put it. "If need be," says Ethiopian Prime Minister Meles Zenawi, speaking on behalf of the African Union, "we are prepared to walk out."

 

In the past, President Obama has recognized the principle on which climate debt rests. "Yes, the developed nations that caused much of the damage to our climate over the last century still have a responsibility to lead," he acknowledged in his September speech at the United Nations. "We have a responsibility to provide the financial and technical assistance needed to help these [developing] nations adapt to the impacts of climate change and pursue low-carbon development."

 

Yet as Copenhagen draws near, the U.S. negotiating position appears to be to pretend that 200 years of over-emissions never happened. Todd Stern, the chief U.S. climate negotiator, has scoffed at a Chinese and African proposal that developed countries pay as much as $400 billion a year in climate financing as "wildly unrealistic" and "untethered to reality." Yet he put no alternative number on the table — unlike the European Union, which has offered to kick in up to $22 billion. U.S. negotiators have even suggested that countries could fund climate debt by holding periodic "pledge parties," making it clear that they see covering the costs of climate change as a matter of whimsy, not duty.

 

But shunning the high price of climate change carries a cost of its own. U.S. military and intelligence agencies now consider global warming a leading threat to national security. As sea levels rise and droughts spread, competition for food and water will only increase in many of the world's poorest nations. These regions will become "breeding grounds for instability, for insurgencies, for warlords," according to a 2007 study for the Center for Naval Analyses led by Gen. Anthony Zinni, the former Centcom commander. To keep out millions of climate refugees fleeing hunger and conflict, a report commissioned by the Pentagon in 2003 predicted that the U.S. and other rich nations would likely decide to "build defensive fortresses around their countries."

 

Setting aside the morality of building high-tech fortresses to protect ourselves from a crisis we inflicted on the world, those enclaves and resource wars won't come cheap. And unless we pay our climate debt, and quickly, we may well find ourselves living in a world of climate rage. "Privately, we already hear the simmering resentment of diplomats whose countries bear the costs of our emissions," Sen. John Kerry observed recently. "I can tell you from my own experience: It is real, and it is prevalent. It's not hard to see how this could crystallize into a virulent, dangerous, public anti-Americanism. That's a threat too. Remember: The very places least responsible for climate change — and least equipped to deal with its impacts — will be among the very worst affected."

 

That, in a nutshell, is the argument for climate debt. The developing world has always had plenty of reasons to be pissed off with their northern neighbors, with our tendency to overthrow their governments, invade their countries and pillage their natural resources. But never before has there been an issue so politically inflammatory as the refusal of people living in the rich world to make even small sacrifices to avert a potential climate catastrophe. In Bangladesh, the Maldives, Bolivia, the Arctic, our climate pollution is directly responsible for destroying entire ways of life — yet we keep doing it.

 

From outside our borders, the climate crisis doesn't look anything like the meteors or space invaders that Todd Stern imagined hurtling toward Earth. It looks, instead, like a long and silent war waged by the rich against the poor. And for that, regardless of what happens in Copenhagen, the poor will continue to demand their rightful reparations. "This is about the rich world taking responsibility for the damage done," says Ilana Solomon, policy analyst for ActionAid USA, one of the groups recently converted to the cause. "This money belongs to poor communities affected by climate change. It is their compensation."



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Tuesday, 17 November 2009

You can put a price on happiness, and new study says it's a bargain


 
November 17, 2009
 
By Peter Popham
 
Money can't buy me love, The Beatles sang, and the best things in life are free - but according to new research, they couldn't have been more wrong. Not only is the happiness of falling in love indistinguishable from that of winning the pools but, says a leading Australian economist, it's worth a lot less.
 
In exhaustive research involving nearly 10,000 people and taking eight years to complete, Professor Paul Frijters claims to have established that happiness is really quite cheap. And the monetary value of events such as marriage, moving house and bereavement is dramatically different depending on whether you are a man or a woman.
 
Men, his research finds, are both far more exalted and more depressed by changes in their lives. To an Australian man marriage is worth about £17,000, but to a woman it is worth only half that. Likewise, men are far more affected by divorce.
 
Mr Frijters' team tracked the major life events of his subjects over a period of years and asked them to assign a number between 0 and 10 to their state of mind after important life events and sudden changes in income. This enabled him to put a money value on what he called the "psychic costs" and "psychic benefits" of these changes.
 
Sad events have a much bigger impact than happy ones, Professor Frijters says, dramatically so for men: the death of a partner or a child is like the loss of £350,000 to a man, but only £73,000 to a woman.
 
"Losing a loved one has a much bigger effect than gaining a loved one," Professor Frijters told the Sydney Morning Herald. "There's a real asymmetry between life and death. This shouldn't surprise us. Human beings seem primed to notice losses more than gains."
And some events are experienced as gains by one sex but losses by the other: moving house, for example, which is the equivalent of losing around £9,000 to a man; for a woman it's like a present of about £1,500.
 
The cost of living: How emotions add up
 
*Marriage
Women: +£8,726 Men: +£17,675
 
*Birth of child
Women: +£4,867 Men: +£18,236
 
*Divorce
Women: -£4,977 Men: -£61,116
 
*Death of loved one
women: -£73,205 Men: -£350,830
 
*Moving house
Women: +£1,454 Men: -£8,947
 
Source: Paul Frijters' study



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Saturday, 14 November 2009

The "Gusher Up" Theory Of Economics


 
By Jeff Berg
13 November, 2009
Countercurrents.org

During the Reagan era the government put in place policies that guaranteed that the wealth that naturally accumulates at the top end of the income ladder stayed there. In order to accomplish this bit of social engineering the top taxation bracket was significantly reduced. The policies of this time succeeded to the extent that the wealthy did in fact get much wealthier.

Where they failed was in the second part of the "trickle down" theories that justified this policy to the public. The theory such as it was stated that if the rich were allowed to get richer this would allow the society at large to become wealthier as a whole. This extra wealth would then "trickle down" thereby resulting in everyone become wealthier than they had been previously and would have been otherwise. To no great surprise to the critics of this policy what happened instead is exactly what the critics projected. I.e. The gap between the rich and everyone else increased dramatically.

Simultaneously the Reaganites embarked on a massive increase in military spending which resulted in two major economic effects. First it massively accelerated America's debt and deficits. Second it acted as a further transfer of wealth from the middle class to the wealthiest classes. An aspect of military spending that is seldom publicly discussed but has been fully understood for centuries if not millennia.

Today we have a new variant on this economic theory that I would like to call the "Gusher Up" theory. In this economic model the government sprays massive amounts of money directly upwards into the pockets of the investor class. This is justified by declaring that a state of emergency exists and to do anything else would result in a complete collapse of the entire financial system. It is further justified by claiming that the end result of this massive geyser of money will be - in the long run - to make everyone wealthier. (As many of you know Keynes had a different view of this long run) This time around no one is saying out loud that this wealth will then "trickle down". No doubt afraid that the terminology might create negative associations for what is already a hard sell. It is nonetheless relentlessly implied.

Once again the critics of this policy have a different take. They are projecting that the net result of this policy will instead be a monumental transfer of money to the richest classes while leaving the entire country burdened with an unprecedented level of debt. The effects of massive debt on a county's economy and its citizens standard of living being at least as well understood as the effects of massive military spending on the pockets of the rich.

This debate could not be said to be raging in the mainstream media as the only critics of the current policies of the U.S. Federal Reserve given major media attention come from the deranged end of the "laissez-faire" libertarian fringe. Folks who would have had all governments do nothing after the collapse of Bear Sterns and Lehman. These "invisible handers" insist that the market like mother knows best. It is now clear in retrospect that what would have happened instead is a cascading failure of all derivative bets that would have taken down the entire economy. A situation that would have led to most of us being unable to access our funds from our banks and a subsequent run on the banks. The resulting panic, pandemonium and street level unrest would have led to an international credit seizure that would have stopped the global economy in its tracks. The net effect may well have put 1929 in the shade. This would have been to no one's advantage.

Those making an informed and balanced critique of these policies are as usual shunted off to the margins. Though they did have a few moments in the sun when it turned out that their projections about the housing bubble were exactly right. Dean Baker comes to mind.

Another critic whose projections have been exceptionally accurate for the last four years is Mike Whitney. In his latest article he refers to a recent study that shows that the critics of the "Gusher Up" theory are proving to be as prescient as those that predicted the effects of the earlier "Trickle down" variant.

"The Fed's meddlesome interventions (now in-excess of $11.4 trillion) represent the largest transfer of wealth in history.

Berkeley economics professor Emmanuel Saez, recently released a report which just confirms that income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression. The report shows that
1--Income inequality is worse than it has been since at least 1917
2--"The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007"
3--"In the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth." ~ http://www.informationclearinghouse.info/article23947.htm

Along with these facts are the current facts about the productive economy in the U.S. today. The true jobless rate is at 17.5% and shows every sign of increasing. The number of people "upside down" on their mortgages and being tossed out of their home continues to grow at an alarming rate. Worse yet there is another round of resetting beginning in the Adjustable Rate Mortgage market which will only exacerbate this already drastic situation. Simultaneously commercial real estate is giving off every sign that it too is a bubble ready to burst. This is the picture for the working and non-working stiff for the next few years at least. To call this a depression for the non-investor class is no exaggeration.

Meanwhile the asset and equities bubbles are being reflated with the Fed's money. It's as if the Fed has decided that the only way markets will be allowed to go is up. No matter how much public money this takes. What Whitney and people like Marc Faber, Peter Schiff and Jim Rogers rightly call "lunacy".

When we finally get around to tabulating the numbers for the period of 2008 to 2010; the gap between those few at the top and what is now being referred to as the "bottom 90%" will have become the widest chasm ever seen in the U.S. What this will mean for the social fabric of the country is not hard to guess. The only upside that I can glean is that this time, surely, the U.S. will not turn to a massive increase in military spending to pump-prime its economy. If only because they have no foreign creditors to bankroll the effort.

Who knows maybe this will leave the energy, transportation and housing retrofit sectors as the only places large enough to turn to in order to kick-start the U.S. and global economy. If this turns out to be the case, and the U.S. meets its domestic challenges and international obligations in these areas, then there is a good chance that all else will be pretty much forgotten if not forgiven. "The War on Terror" like the "Domino Theory" fading into well deserved obscurity. Horrific episodes that ultimately meant little to those not directly affected and not permanently fatal to the human project. Meaning there is at least something to be hoped for if not to be counted on.

Ton confrere,
Jeff Berg
Jeff is a founding member of Post Carbon Toronto. His writing focuses on Energy & Emissions and their micro and macro implications ecologically, economically and socially. He can be reached at jeffberg@rogers.com
 



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Private supply of a 'Public Good'

 
 
Private 'police' provoke concern
 

The growing number of private security companies policing UK streets is a worrying development, senior police figures say.

The Police Federation of England and Wales said there is "huge concern" over their powers and accountability.

Former Metropolitan Police Commissioner Sir Ian Blair has also said there should be no role for the private sector in Britain's law enforcement.

The firms typically charge residents to patrol streets and deter troublemakers.

 

Regular patrols

The growth in private security firms taking on policing work comes despite an increase in police numbers.

A record 141,252 police officers are available for duty in England and Wales, although there have been reductions in 16 police areas.

Private security firms have no powers, although chief constables may award some limited ones such as allowing them to move people on.


 
 
" It's the police who patrol public space and we should be very wary about giving those powers to private security companies "
Simon Reed, Police Federation
 

BBC correspondent Keith Doyle joined one private security company who began patrolling the streets of Darlington this week.

He said residents there pay between £2 and £4 a week to have their homes included in regular patrols and to receive an instant response if they need help.

"These guards know they have no powers but they say simply by being here it prevents trouble and that's something local residents agree with and have signed up for," he said.

Francis Jones of Sparta Security told our correspondent the patrols provided a visual deterrent to potential criminals.

He said: "We are giving a deterrent to them and also raising the confidence of the public who have taken us on board and there are quite a lot of people coming forward, ringing us up, wanting our service."

 

'Fear of crime'

But the vice chairman of the Police Federation, which represents officers, said such firms could cause problems.

Simon Reed said: "We have got people who have certain powers, we are going to see them in uniform. Potentially there is confusion there for the public and who are they actually accountable to?

"I understand the public's fear of crime but actually it's the police who patrol public space and we should be very wary about giving those powers to private security companies."

Sir Ian Blair said more use should be made of community officers and civilians working within the police, otherwise there could be more private police patrols.

He said: "I do not see community safety as a commodity to be bought and sold and therefore we shouldn't be having the private sector in policing.

"Unless we get this right, we will end up with private security coming in and they will work for the rich and the poor will go without."




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Friday, 13 November 2009

Non-Europeans shut out from another 250,000 skilled jobs

 

Non-Europeans shut out from another 250,000 skilled jobs

Brown to clamp down on student visa abuses
Home Office plans big asylum system changes

More than 250,000 skilled engineering, care and catering jobs are to be closed to non-European overseas workers next year as a result of Gordon Brown's immigration speech today.

 
The prime minister promised that these sectors would be taken off the official list of shortage occupations as soon as employers and training bodies can provide sufficient qualified recruits.
 
In his first major speech on immigration for 18 months, he also promised to clamp down on widespread abuse of the student visa system.
 
An official review will look at raising the minimum level of course for which foreign students can get a visa, introducing mandatory English language tests and blocking overseas students from working part-time in temporary jobs that could be filled by young Britons.

 

After the speech the Home Office published a draft immigration bill which is designed to be enacted after the general election. The 243-page bill – which would be the eighth major piece of immigration and asylum legislation since Labour came to power in 1997 – is designed to "simplify and consolidate" the baffling jigsaw of bills and rule changes introduced since the bedrock 1971 Immigration Act.

 
The bill also proposes sweeping changes in immigration procedures, including the replacement of the deportation process with a general power to expel failed asylum seekers and illegal migrants. They would also be banned from returning to Britain for a fixed period or indefinitely.
 
A Home Office consultation paper on welfare support for asylum seekers also published today underpins these proposals with plans to limit housing and benefit payments to three months for those told to leave the country. Families who have been told to leave would have to live in "full-board" Borders Agency accommodation and replacing all cash payments with a plastic pre-paid card.
 
The further changes to the points-based immigration system outlined by Brown involve implementing recommendations from the government's migration advisory committee. From this autumn, shortage occupation jobs will have to advertised for four weeks rather than the current two before they can be filled by non-European skilled workers.
 
The previous work permit regime covered about 700,000 jobs in shortage occupations. Since the migration committee was set up last year, it has recommended a cut to about 500,000. The latest recommendations covering engineering roles, skilled chefs and care workers would remove a further 290,000 British jobs.
 
The number of these jobs filled by non-European workers, however, is very much smaller, with only 30,000 coming to work in Britain between November 2008 and August 2009. The door was closed to unskilled workers from outside the European Economic area when the points-based system was introduced. Now, step by step, the door is also being closed to skilled workers from outside Europe.
 
The prime minister said realistic timetables needed to be developed for adequate training to take place before these jobs could be taken off the shortage lists.
 
"As growth returns I want to see rising levels of skills, wages and employment among those resident here – rather than employers having to resort to recruiting people from abroad," said Brown.
 
The Conservatives said that the PM's speech had a hollow ring to it. "This is the Government that tried to cover up a deliberate
policy of increasing immigration and the prime minister's comments show that he has no idea about how to deal with the whole question of immigration now," said the shadow home secretary, Chris Grayling.
 
The Liberal Democrats' Chris Huhne said Brown was trying to shut the stable door long after the horse had bolted and argued that the government's mismanagement of the immigration system had long ago undermined the country's liberal attitude to the issue.
The Refugee Council said the consultation on asylum support showed the government was determined to make life as miserable as it could for those who got to Britain. Jonathan Ellis, the organisation's head of policy, said: "It has proposed to re-enact the widely condemned section 55, making refugees homeless and destitute, that was ruled illegal by the courts four years ago. Not only that, the government proposes that families who are unable to return home will be refused cash support, and forced to rely on a payment card.
 
"This makes a mockery of the government's claim to be safeguarding and promoting the welfare of children seeking asylum as it announced last week."
 
The Home Office denied any change of policy on section 55, insisting it would not be used to make anybody destitute in the way condemned by the law lords.
 
Refuge and Migrant Justice said that buried in the bill was provision to give ministers the power to overrule bail decisions made by judges in immigration and asylum cases.



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Wednesday, 11 November 2009

Powerful interests are trying to control the market


 

 

By John Kay
Published: November 10 2009 20:34 | Last updated: November 10 2009 20:34
John Kay, columist
You can become wealthy by creating wealth or by appropriating wealth created by other people. When the appropriation of the wealth of others is illegal it is called theft or fraud. When it is legal, economists call it rent-seeking.
 
Rent-seeking takes many forms. On Europe's oldest highway, the Rhine river, the castles on rocky outcrops date from the time when bandits with aristocratic titles extracted tolls from passing traffic. In poor countries the focus of political and business life is often rent-seeking rather than wealth creation. That helps explain why some countries are rich and others poor.
 
Rent-seeking drives the paradoxical resource curse. Oil or mineral wealth mostly reduces the population's standard of living because it diverts effort and talent from wealth creation to rent-seeking. Sadly, foreign aid often has a similar effect.
Rent-seeking can be effected through rake-offs on government contracts, or the appropriation of state assets by oligarchs and the relatives of politicians.
 
But in more advanced economies, rent-seeking takes more sophisticated forms. Instead of 10 per cent on arms sales, we have 7 per cent on new issues. Rents are often extracted indirectly from consumers rather than directly from government: as in protection from competition from foreign goods and new entrants, and the clamour for the extension of intellectual property rights. Rents can also be secured through overpaid employment in overmanned government activities.
 
Rent-seeking is found whenever economic power is concentrated – in the state, in large private business, in groups of co-operating and colluding firms. Private concentrations of economic power tend to be self-reinforcing. This problem was widely recognised in America's gilded age. The well-founded fear was that the new mega-rich – the Rockefellers, Carnegies, Vanderbilts – would use their wealth to enhance their political influence and grow their economic power, subverting both the market and democracy. Today it is Russia that exemplifies this problem.
 
But America has a new generation of rent-seekers. The modern equivalents of castles on the Rhine are first-class lounges and corporate jets. Their occupants are investment bankers and corporate executives.
 
Control of rent-seeking requires decentralisation of economic power. These policies involve limits on the economic role of the state; constraints on the concentration of economic power in large business; constant vigilance at the boundaries between government and industry; and a mixture of external supervision and internal norms to limit the capacity of greedy individuals in large organisations to grab corporate rents for themselves. Vigorous pursuit of these is the difference between a competitive market economy and a laisser-faire regime, and it is a large difference.
 
Privatisation and the breaking up of statutory monopolies has reduced rent-seeking by organised groups of public employees. But the scale of corporate rent-seeking activities by business and personal rent-seeking by senior individuals in business and finance has increased sharply.
 
The outcomes can be seen in the growth of Capitol Hill lobbying and the crowded restaurants of Brussels; in the structure of industries such as pharmaceuticals, media, defence equipment and, of course, financial services; and in the explosion of executive remuneration.
 
Because innovation is dependent on new entry it is essential to resist concentration of economic power. A stance which is pro-business must be distinguished from a stance which is pro-market. In the two decades since the fall of the Berlin Wall, that distinction has not been appreciated well enough.
 
The story is told of the Russian policymaker, visiting the US after the Soviet Union collapsed, who asked: "Who is in charge of the supply of bread to New York?" The bureaucrat had not learnt how markets work, and we are in danger of forgetting it. The essence of a free market economy is not that the government does not control it. It is that nobody does.
 
johnkay@johnkay.com



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