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‘Thou shalt not’ to an economy of exclusion and inequality

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"Those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the 'exploited' but the outcast, the 'leftovers'." - Pope Francis. Image: L'Osservatore Romano

“Those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the ‘exploited’ but the outcast, the ‘leftovers’.” – Pope Francis. Image: L’Osservatore Romano

Pope Francis has issued, a month before Christmas, a blunt and plain message to the political and financial masters of our societies. That message is: the economics of exclusion and inequality must stop.

The message comes early in his ‘exhortation’ (called ‘Evangelii Gaudium’) and which has just been released by the Vatican. You will find it in Chapter 2 which is titled ‘Amid the crisis of communal commitment’. The main body of the exhortation has a lot of the usual evangelical language that such messages from the Vatican typically contain, but this chapter rings stark and true.

Francis has begun this section with: “It is not the task of the Pope to offer a detailed and complete analysis of contemporary reality, but I do exhort all the communities to an ‘ever watchful scrutiny of the signs of the times’. This is in fact a grave responsibility, since certain present realities, unless effectively dealt with, are capable of setting off processes of dehumanisation which would then be hard to reverse.”

Vatican_Francis_evangelii_gaudiumHe gives a nod to the proponents of technological remedies to many of our contemporary problems: “We can only praise the steps being taken to improve people’s welfare in areas such as health care, education and communications.” And then gets to the root of the issue with “at the same time we have to remember that the majority of our contemporaries are barely living from day to day, with dire consequences. A number of diseases are spreading. The hearts of many people are gripped by fear and desperation, even in the so-called rich countries. The joy of living frequently fades, lack of respect for others and violence are on the rise, and inequality is increasingly evident”.

“It is a struggle to live and, often, to live with precious little dignity. This epochal change has been set in motion by the enormous qualitative, quantitative, rapid and cumulative advances occurring in the sciences and in technology, and by their instant application in different areas of nature and of life. We are in an age of knowledge and information, which has led to new and often anonymous kinds of power.” This is a complaint as plain as any we have seen from those suffering from the effects of climate change, from the forced economics of austerity, from the land grabs and the perversions of democracy. It is possible that in the last sentence, Francis has also warned against the global spying (by the USA and its feckless allies) which included the Vatican too.

In the sub-section titled ‘No to an economy of exclusion’ Francis has made plain his opposition [get the English pdf here] to the current systems of power and control:
“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality. Such an economy kills.”
“How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalised: without work, without possibilities, without any means of escape.”

Vatican_Francis_main“Human beings are themselves considered consumer goods to be used and then discarded. We have created a ‘throw away’ culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the ‘exploited’ but the outcast, the ‘leftovers’.”

And in one angry paragraph, Francis effectively sends packing the army of macro-economists and financial manipulators who continue to claim that constant growth (GDP, economy, consuming, and so on) brings people out of poverty thanks to the ‘free market’.

“In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralised workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”
“To sustain a lifestyle which excludes others, or to sustain enthusiasm for that selfish ideal, a globalisation of indifference has developed. Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase. In the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”

This is indeed revolutionary material from the Vatican. Now let’s see what effect it has on the suits in the G20, the banking parasites, the stock marketeers, the land grabbers, the ecological criminals in all our countries.

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An inequality chasm is fracturing Europe, warns the OECD

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April in Berlin, Germany. A homeless man sat begging for euros or food in the entrance of an S-Bahn station.

April in Berlin, Germany. A homeless man sat begging for euros or food in the entrance of an S-Bahn station.

Deepening inequalities in income between the richer and poorer families, greater relative income poverty in recent years compared with earlier, a greater burden borne by children and young people than before because of their being relatively poor – these are some of the stark conclusions contained in the OECD briefing, ‘New Results from the OECD Income Distribution Database’.

This is the picture of Europe today (and of the non-European members of the OECD). “Looking at the 17 OECD countries for which data are available over a long time period, market income inequality increased by more over the last three years than what was observed in the previous 12 years,” observed the new briefing, which is sub-titled ‘Crisis squeezes income and puts pressure on inequality and poverty’.

Annual percentage changes in household market income between 2007 and 2010, by income component. Chart: OECD

Annual percentage changes in household market income between 2007 and 2010, by income component. Chart: OECD

The figures and data show that many of the countries recording the most dramatic increases in inequality are European countries which have been subjected to punitive austerity measures by the European Union and International Monetary Fund. The OECD report singles out Spain and Italy, where the income of “the poorest 10 percent was much lower in 2010 than in 2007”.

Five percent falls in income (per year) amongst the poorest 10 percent were also recorded in Greece, Ireland, Estonia, and Iceland. The only non-European nation with a comparable level of income decline was Mexico. The report also stated that over the same period, poor families in the United States, Italy, France, Austria and Sweden all recorded income losses in excess of the OECD average.

Indeed the ‘New Results’ briefing has showed that across OECD countries, real household disposable income stagnated. Likewise, the average income of the top 10% in 2010 was similar to that in 2007. Meanwhile, the income of the bottom 10% in 2010 was lower than that in 2007 by 2% per year. Out of the 33 countries where data are available, the top 10% has done better than the poorest 10% in 21 countries.

This is the OECD picture till 2010. Since then, recession has been the companion of inequality. With an average growth of -0.2 per cent in the first quarter (against -0.1 per cent in the EU as a whole) and hardly better prospects for the whole rest of the year (-0.7 per cent), according to Eurostat, the dreaded “double dip” has become a reality. The press attributes the result largely to the austerity policies.

Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010: Chart: OECD

Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010: Chart: OECD

“Eurozone sets bleak record of longest term in recession,” reported the Financial Times. The daily noted that “this latest dismal record came after unemployment hit 12.1 per cent in the bloc, its highest level,” and that this data “is likely to add to pressure on the European Central Bank to take further action after cutting interest rates this month, and to revise down its economic forecast predicting a recovery later in the year.”

Moreover, relative income poverty – the share of people having less income than half the national median income – affects around 11% of the population on average across OECD countries. Poverty rates range between 6% of the population in Denmark and the Czech Republic to between 18% and 21% in Chile, Turkey, Mexico and Israel. Over the two decades up to 2007, relative income poverty increased in most OECD countries, particularly in countries that had low levels of income poverty in the mid-1990s.

In Sweden, Finland, Luxembourg and the Czech Republic, the income poverty rate increased by 2 percentage points or more. In Sweden, the poverty rate in 2010 (9%) was more than twice what it was in 1995 (4%). Relative poverty also increased in some countries, such as Australia, Japan, Turkey and Israel, with middle and high levels of poverty.

The OECD briefing has stated bluntly: “Households with children were hit hard during the crisis. Since 2007, child poverty increased in 16 OECD countries, with increases exceeding 2 points in Turkey, Spain, Belgium, Slovenia and Hungary.” The ‘New Results’ briefing added: “Since 2007, youth poverty increased considerably in 19 OECD countries. In Estonia, Spain and Turkey, an additional 5% of young adults fell into poverty between 2007 and 2010. In the United Kingdom and Ireland, the increase was 4%, and in the Netherlands 3%.”

Annual percentage changes in household disposable income between 2007 and 2010, by income group. Chart: OECD

Annual percentage changes in household disposable income between 2007 and 2010, by income group. Chart: OECD

Between 2007 and 2010, average relative income poverty in the OECD countries rose from 12.8 to 13.4% among children and from 12.2 to 13.8% among youth. Meanwhile, relative income poverty fell from 15.1 to 12.5% among the elderly. This pattern confirms the trends described in previous OECD studies, with youth and children replacing the elderly as the group at greater risk of income poverty across the OECD countries.

These results only tell the beginning of the story about the consequences of austerity, growing unemployment, the burden on children and youth, and burden on immigrant wage labour. The OECD data describes the evolution of income inequality and relative poverty up to 2010. But “the economic recovery has been anaemic in a number of OECD countries and some have recently moved back into recession”, said the briefing.

Worse, since 2010, many people exhausted their rights to unemployment benefits. In such a situation, the briefing has warned, “the ability of the tax-benefit system to alleviate the high (and potentially increasing) levels of inequality and poverty of income from work and capital might be challenged”. These are unusually blunt words from the OECD and their use reflects the depth and persistence of the crisis of modern, reckless, destructive capitalism in Europe.

Hu Jintao on 90 years of the Communist Party of China

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Here follow extracts from the keynote speech made by Hu Jintao, general secretary of the Central Committee of the Communist Party of China (CPC), at a grand gathering marking the 90th founding anniversary of the CPC at the Great Hall of the People. This speech is an important document for not only Asians but also for those who follow socialism in all its variety in various parts of the world.

Facts have shown that neither the mission of striving for national survival nor the historic task of fighting imperialism and feudalism could be accomplished by reformist self-improvement movements which did not touch the foundation of feudal rule, old-style peasant wars, revolutions led by bourgeois revolutionaries, or other attempts to copy Western capitalism. To find a way of achieving China’s development and progress, one must, first of all, find an advanced theory that can guide the Chinese people in their revolution against imperialism and feudalism, and an advanced social force must rise that can lead social changes in China.

[You can get the full text in this document.]

With the founding of New China, the Chinese people became masters of their country and society and determined their own destiny. China achieved a great transition from a feudal autocracy that was several thousand years old to a people’s democracy. Great unity and unprecedented solidarity of all ethnic groups were realized in China. The history of old China being a semi-colonial and semi-feudal society which was like a heap of loose sand was brought to an end once and for all. The unequal treaties imposed on China by imperialist powers and all the privileges they had in China were abolished. The Chinese people stood up, and the Chinese nation entered a new era of development and progress.

[More on the 90th anniversary of the CPC from China Daily.]

Comrades and Friends, we owe all our achievements over the past 90 years to the tenacious struggles waged by Chinese Communists and the people of several generations. The Party’s first generation of central collective leadership with Comrade Mao Zedong at the core united with and led the entire Party and the people of all ethnic groups in achieving the great victory of the new-democratic revolution, establishing the basic socialist system and creating the fundamental political prerequisite and institutional foundation for all development and progress in contemporary China.

The Party’s second generation of central collective leadership with Comrade Deng Xiaoping at the core united with and led the entire Party and the people of all ethnic groups in starting the great march toward reform and opening up, sounding the bugle of the times for building socialism with Chinese characteristics and ushering in a new period of socialist development. The Party’s third generation of central collective leadership with Comrade Jiang Zemin at the core united with and led the entire Party and the people of all ethnic groups in steadfastly carrying out reform and opening up, advancing with the times, guiding reform and opening up to move in the right direction, and successfully ushering the great cause of socialism with Chinese characteristics into the 21st century.

A review of its 90 years of development shows that the following are essential for our Party to preserve and develop its advanced nature as a Marxist political party: The Party should free up the mind, seek truth from facts, advance with the times, take a scientific approach toward Marxism, use Marxism as an evolving theory to guide practice in new realities, uphold truth, correct mistakes, blaze new trails, and maintain the motivation that enables the Party to forge ahead in a pioneering spirit. It should serve the people, rely on them, work for their benefit with heart and soul, draw on their wisdom and strength, and always maintain close ties with them. The Party should appoint officials on their merits, attract as many talents as possible, use our cause to inspire, train, and cultivate high-caliber personnel, constantly absorb new blood, and maintain its vitality at all times.

The Party’s growth over the past 90 years shows that theoretical maturity is the basis for political conviction, advancing with the times theoretically is a prerequisite for forging ahead in action, and unity of thinking is an important guarantee for the whole Party to march in step. We Chinese Communists believe that the basic tenets of Marxism are an irrefutable truth and that Marxism must be constantly enriched and developed as practice changes, and we never take Marxism as an empty, rigid, and stereotyped dogma. For Marxism, practice is the source of its theory, the basis for its development, and the criterion for testing its truth. Any actions that stick to dogma, ignore practice, or overstep or lag behind real life will not succeed.

[More on the 90th anniversary of the CPC from China Daily.]

Nato’s fascist war and the Black Code of the West

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There are two recent articles that point out, with great clarity, the inter-connectedness of crises like the USA-led invasion of Libya and of the nuclear power emergency in north-eastern Japan. The writers are Fidel Castro Ruz and Jacques Depelchin.

Fidel Castro Ruz: First Secretary of the Communist Party of Cuba (3 October 1965 – 31 July 2006) and President of Cuba (2 December 1976 – 24 February 2008)

In his article, titled ‘NATO’S Fascist War’, Castro has said: “You didn´t have to be clairvoyant to foresee what I wrote with great detail in three Reflection Articles I published on the CubaDebate website between February 21 and March 3: “The NATO Plan Is to Occupy Libya,” “The Cynical Danse Macabre,” and “NATO´s Inevitable War.” Not even the fascist leaders of Germany and Italy were so blatantly shameless regarding the Spanish Civil War unleashed in 1936, an event that maybe a lot of people have been recalling over these past days.”

“Almost 75 years to the day have passed since then, but nothing that has happened over the last 75 centuries, or even 75 millenniums of human life on our planet can compare. Sometimes it seems that those of us who serenely voice our opinions on these issues are exaggerating. I dare say that we have actually been naive to assume that we all should be aware of the deception or colossal ignorance that humanity has been dragged into. In 1936 there was an intense clash between two systems and ideologies of more or less equal military power.”

“Cuba stated its position regarding the internal situation in Libya at the meeting in Geneva. Without hesitating, Cuba defended the idea of a political solution to the conflict in Libya and was categorically opposed to any foreign military intervention. In a world where the alliance between the United States and the developed capitalist powers of Europe increasingly take hold of the people´s resources and fruits of their labor, any honest citizen, whatever their standpoint to the government, would be opposed to a foreign military intervention in their country. Now, however, the criminal and discredited NATO will write a “beautiful” little story about its “humanitarian” bombing.”

Ota Benga, by Mumia Abu Jamal. Who was Ota Benga? A Congolese man, brought to the USA to be exhibited at the 1904 St. Louis World’s Fair. He was an Mbuti (a pygmy), about 4 feet 8 inches tall, put on display at the Fair’s Hall of Man along with an exotic collection of indigenous peoples from all over the world. Ota Benga was exhibited next to a group of Native Americans that included Geronimo.

“If Gaddafi honors the traditions of his people and decides to fight to the last breath, as he has promised, together with the Libyans who are facing the worst bombing a country has ever suffered, NATO and its criminal projects will sink into the mire of shame.”

The full article is available on the Monthly Review website.

In ‘It’s All Interconnected, Why Pretend Otherwise?’ Jacques Depelchin has said: “The tragedy that is unfolding in front of our eyes is not just about the excesses of one industry, be it financial, nuclear, oil, etc. It is about the continued and deliberate silencing/sidelining of the majority of humanity by a tiny dictatorial fraction that, for centuries and generations has always gotten away, literally with murder.”

“What has struck me the most about all of the articles I have read about the nuclear/environmental crisis in Japan is how shallow and selective the history is. Invariably they all start with the atom, even though the mind set that has pushed through the informal, full of secrecy, nuclear code can easily be said to have been inspired by Le Code Noir [the Black Code] decreed by Louis XIV in 1685 (in place till 1848) to make sure that the slave industry served its profiteers without any moral and/or ethical preoccupation.” Jacques Depelchin is executive director of the Ota Benga Alliance, and is a committed intellectual, academic, and activist for peace, democracy, transparency and pro-people politics in the Democratic Republic of Congo.

The full article is available on the Ota Benga Alliance website and on Pambazuka.

The world according to philanthrocapitalism

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The philanthrocapitalist solution. If it doesn't deliver shareholder value, zap it.

The always eminently readable From Poverty To Power blog (by Duncan Green of Oxfam) has an entry about ‘philanthrocapitalsm‘. a neologism that sounds like a disastrous mash-up packaged as a convincing oxymoron. After all, philanthropy and capitalism are two quite different things, arn’t they. Yes and no, although my own view is, mostly yes.

Green writes: “I spoke earlier this week at an annual retreat of a very different kind of charity – ARK. Set up by a bunch of hedge fund managers (it prefers the term ‘alternative investment industry’), ARK raises a pile of money from glitzy gala dinners, and uses it to do what it calls ‘venture philanthropy‘. It focuses on education, child health (especially HIV and AIDS) and child protection and, like better known ‘philanthrocapitalists’ like Bill Gates, is fixated on measuring impact, hence the name, which stands for ‘absolute return for kids’.”

The usual approach, as Green says, is that when they enter the aid business, captains of industry and finance often act as if they regard all existing aid workers as utter imbeciles, who could easily achieve their small-time aims if only they adopted private sector practices.

Very true. For reasons that are obvious to us utter imbeciles but which mysteriously escape these captains of industry, this is staggering hubris. When they’re done savaging the NGOs and penniless do-gooders, and when they finally get to grips with some of the basic issues on the street (hunger, water, education, health) they face a learning curve that’s as good as vertical. It’s not the typical business school curve, and it’s infinitely more demanding. That’s when the captains (those of them who descended to the street) begin, dimly and fuzzily, to understand that the world is not made up of supply chains and shareholder value. The world’s ‘best’ companies are admired (in culturally bankrupt circles) for their skills at project management and prioritisation. The world’s ‘best’ companies have obviously never met the world’s best home-makers (women), who outnumber them by about a million to one.

When all you use is a mech-shovel, every problem looks like mud.

Put the captains and their bonus-driven crews into the development world, which has no clear bottom line of profit and loss, and they stumble around lost. Here, in the real world on the street with no name, process matters much more – it’s not just about the destination, but how you get there. Is it inclusive? Who’s shut out of the decision making? Development is about recognising the importance of power, and the way it is endlessly renegotiated and redistributed within society.

But still they try, and perhaps some get it. For those who do get it, they should steer clear of sanctimonious claptrap of the sort dished out by something called the Philanthrocapitalist Manifesto. Here’s a ripe sampling: “Thirty years of market reform has been good for Britain’s rich and our society has become more unequal. Yet populist bashing of the rich is a blind alley. Instead we need to rewrite the social contract between the rich and the rest. The winners of capitalism have a responsibility to the rest of society, not just to pay their taxes but to give back with their money and their skills. By doing so, they can be a dynamic, entrepreneurial source of innovation in our society and so build a more sustainable environment for wealth creation.”

In tones dripping with aspartame, this misbegotten manifesto continues: “The corporate world, too, is starting to realise that business can ‘do well by doing good’. The financial crisis has demonstrated that narrow-minded focus on short-term profits is bad for shareholders as well as society. Business needs to take a longer-term perspective on success, recognising that capitalism will only thrive if it sustains the society and the environment in which it operates. Before the crisis, some corporate leaders had started to lead the way towards a more responsible capitalism. After the crisis, the need is more pressing than ever.” Oh for heaven’s sake.

The philanthrocapitalist SUV, for getaways from tricky development questions.

One of the new purveyors of this oxymoron is Matthew Bishop, US business editor and New York bureau chief of The Economist, and co-author of a book named ‘Philanthrocapitalism: How Giving Can Save the World’. The Economist is a weekly compilation of jumbled opinion and pedantic misbelief masquerading as a journal, and survives only because of clever marketing and the abysmal ignorance of its corporate subscribers. My advice to you is, never waste money on a subscription, read it (borrow, don’t pay) only to understand what the more foolish captains are plotting next.

Why am I saying so? This starry-eyed account in one of the business degree shops will explain. “Now you see a company like Wal-Mart embracing green products, working with vast numbers of non-profits to change the whole product range that it is offering to the American people and other parts of the world where it operates. And this is, in turn, changing the supply chains, changing the companies all around the world, particularly in China, that it works with. It is by no means creating perfection, but it’s substantially different to what we saw before. And you hear more and more companies starting to explore this, starting to work with the non-profit world to actually improve their game.” That’s an author yodelling on about philanthrocapitalism. Wal-Mart and green?? Sad but true.