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Posts Tagged ‘market

Occupying Wall Street

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The immediate area around the New York Stock Exchange, “Wall Street,” has been closed to the public and protestors who are encamped at a nearby park, chanting, singing and dancing along with marching and bugling on surrounding streets accompanied by phalanxes of cops and motor scooters, to cheers and thumbs-up from tour buses and hand shakes from passersby and street workers.

There has been no sign of the commercial media. Mainstream media in the Asia-Pacific region have ignored the historic occupation entirely, not because of their failure to see the beginning of an American democratic awakening, but because the channels of cross-holding and control are now well-established.

These mercantile cables are tightly wound around the “emerging economies” and their growing middle class populations whose consumption patterns are seen as replacing those to be lost by social movements such as this in the West.

“On the 17th of September, we want to see 20,000 people to flood into lower Manhattan, set up beds, kitchens, peaceful barricades and occupy Wall Street for a few months. Like our brothers and sisters in Egypt, Greece, Spain, and Iceland, we plan to use the revolutionary Arab Spring tactic of mass occupation to restore democracy in America. We also encourage the use of nonviolence to achieve our ends and maximize the safety of all participants.”

According to their website, the mission of the leaderless resistance movement is to flood thousands of people into lower Manhattan, set up beds, kitchens, peaceful barricades and occupy Wall Street for a few months in order to persuade President Barack Obama to establish a commission to end “the influence money has over representatives in Washington.” Demonstrators gathered to call for the occupation of Wall Street, Saturday, Sept. 17, 2011, in New York.

Occupy Wall Street is a leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. The original call for this occupation was published by Adbusters in July; since then, many individuals across the country have stepped up to organize this event, such as the people of the NYC General Assembly and US Day of Rage. There’ll also be similar occupations in the near future such as October2011 in Freedom Plaza, Washington D.C.

This is from their statement:
“We agree that we need to see election reform. However, the election reform proposed ignores the causes which allowed such a system to happen. Some will readily blame the federal reserve, but the political system has been beholden to political machinations of the wealthy well before its founding. We need to address the core facts: these corporations, even if they were unable to compete in the electoral arena, would still remain control of society. They would retain economic control, which would allow them to retain political control. Term limits would, again, not solve this, as many in the political class already leave politics to find themselves as part of the corporate elites. We need to retake the freedom that has been stolen from the people, altogether.”

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How the OECD dislikes poor Indians but covets their economy

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No you don't. Get your destructive sophistry away from my village and my community.

The OECD (Organisation for Economic Cooperation and Development) has just released its Survey of India, and has said that “India now has the opportunity to move towards sustained and socially inclusive double-digit growth if the right policies are put in place”. The OCED survey said India’s economy has ranked among the best performers over the past decade, and poverty has been falling faster than in many other emerging economies. Pending a detailed reading of the report I can’t see how “best performer” and “falling poverty” can be applied to India, but the social and environmental dimensions of India’s so-called eocnomic growth may not be within the OECD’s scope in such a survey.

OECD Secretary-General Angel Gurría presented the Economic Survey of India in New Delhi and there said: “Policymakers are to be commended on the remarkable catch-up achieved in recent years, making India one of main driving forces of the global economy. The priority given to more socially inclusive economic growth is appropriate and further reforms are needed to achieve it.” There are more such conceptual conundrums here – catch up with who? And for what? What “socially inclusive” growth is Gurria talking about – India has the world’s largest population of malnourished children and the world’s largest population of hungry people. This has been so for the entire period that the OCED said India was “catching up”.

To ensure strong growth continues and is sufficiently inclusive, the government needs to target public expenditure better on the poor, the OECD has said. “Although high growth has reduced poverty, progress could have been faster. Hundreds of millions of people still live below the official poverty line. Malnutrition and poor health are still widespread.” Evidently the OECD India Survey 2011 team saw no contradiction between what they have praised and what exists. Against this backdrop, the report advocates a strengthened welfare system and improved access to health care. “Government spending on health is only around 1% of GDP – among the lowest rates in the world. Private health care provision is increasing but quality is highly variable. Better regulation and oversight is needed.” This is true, but the Survey’s objectives lead all solutions away from more and better public healthcare.

The irrelevance of the GDP squiggle to most Indians goes unnoticed by the OECD

The report said that around 9% of GDP is spent on energy and other subsidies, most of which fails to reach the poor, and that diesel subsidies should be phased out. For other energy products, such as kerosene and LPG, susbidies should be transformed into cash payments targeted to the poorest people in society. The government needs to ensure that its plan to shift kerosene and fertiliser subsidies into direct cash transfers is implemented quickly. Here the roll-out of a Universal Identity Number will help ensure payments go to the right people.

The recommendations in this para are full of threat. A quick look at the full Survey itself shows that there is special mention made of the fuel subsidy and the targeted public distribution of foodgrain. If the free marketeer reformists were to have their way, these would both be scrapped overnight, to be replaced by a weekly or monthly dole, transferred electronically and validated by a new national identification number which is in theory supposed to prevent fraud and exclusion. This is dangerous for the poor, because it makes them directly vulnerable to the worst symptoms of profiteering and corruption – already rampant despite safeguards – and because it removes the responsibility from the state for providing good quality and cheap social services and provisions of daily living. In this, the OECD Survey sounds exactly like the IMF.

So tell me, OECD boys and girls, what do you know about guavas and cane?

The OCED report has otherwise welcomed the planned introduction of a nationwide goods and services tax and suggested that in order to keep the overall rate low, the base should be as wide as possible (there go more paisas from the cash transfer to the poor). “Further fiscal consolidation is also called for, making more funds available for private investment” – which means more cutting of the health, education and rural development programmes. “Cutting red tape for businesses and further lowering barriers to trade and investment will help both companies and households. The report also notes that while progress has been made to improve infrastructure, even greater investment in this area is necessary to boost growth.”

The Survey has said that strengthening the financial system and promoting access to financial services is essential for strong and inclusive growth. (We’re quite sick and tired of hearing about ‘inclusive growth’ when the Indian government and its foreign advisers do all they can every single day to prevent it.) The report noted that many Indians still lack access to bank accounts although microfinance is improving opportunities in many communities. “The financial sector proved resilient during the global downturn but there remains scope for greater competition.” Hear, hear.

The Survey has said that education has been given high priority by India’s central and state governments and enrolment continues to grow fast – we call them degree factories for the globalisation mill. The report recommends more effective government regulation and funding. Incentives and professional development opportunities for teachers need to be strengthened while student loans for higher education should be more widely available.

Now I expect the usual round of endorsement, referencing and studious quoting to begin. Within a few months, the recommendations of the OCED India Survey 2011 will assume an oracular hue, never mind the reactionary and anti-poor real nature of its advice. The multilateral lending institutions – the World Bank, the IMF and the Asian Development Bank – will cite the Survey repeatedly. So will state governments in India and the central government. The armoury of those who assault the poor and the marginalised of India has been strengthened by a new weapon – this is the OECD contribution to the people of India.

The stranglehold of finance capital over the state

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Women collect coal scraps from an overburden dump for a nearby open pit coal mine. Overburden is the fertile soil (formerly used for agriculture) that has to be removed to get at the coal underneath. In the process small pieces of coal are also picked up which are scavenged by local villagers to be sold for cash. Photo: Panos Pictures/Robert Wallis

Is ours the age of the struggle between the state and the market? Or is it the age in which the state bowed to financial control over it? From a perspective which integrates labour, environmental stewardship, cultural safeguarding and a just human development, the state is firmly in the grip of finance and its liberalisers.

What has come to be called neo-liberalism is in short the expression used to describe the relentless and growing control of resources of every sort, be they mineral, human or environmental. If there has been a problem of neoliberalism it is that it failed to increase the rate of profit consistently and never achieved levels comparable to those of the ‘Golden Age’ between 1948 and 1973. The series of ‘booms’ of various kinds, which caught the attention of investors, bankers and speculators, have had much to do with the seeking to replicate the conditions of those years (in Deutschland they called the period ‘die Fette Jahre’, the fat years).

Boys carry large lumps of coal that they have scavenged from an open pit mine near Dhanbhad. They will carry this coal several kilometres to sell in a local market. As mining has displaced agriculture, scavenging for coal on the edge of mines has become one of the means of survival for those who have been displaced from an agricultural life by mining. Photo: Panos Pictures/Robert Wallis

The essence of financial liberalisation, seen in its totality, is to ensure the stranglehold of finance capital over the State, Prabhat Patnaik has explained in a commentary in People’s Democracy (the weekly organ of the Communist Party of India Marxist). This may appear paradoxical at first sight: as the term ‘liberalisation’ appended to ‘financial’ suggests, the basic aim of the process is to liberate finance from the shackles of the State, ie, to ensure not the control of finance over the State but the negation of the control of the State over finance. But the remarkable aspect of financial liberalisation consists precisely in this: what appears at first sight as the liberation of finance from the shackles of the State is nothing else but the acquisition by finance of control over the State.

In his short essay, ‘Neoliberalism: From One Crisis to Another, 1973-2008’, Neil Davidson has explained that these booms were the result of the following factors which he enumerates as under:

The first and most fundamental was simply greater exploitation of the workforce, by increasing productivity on the one hand (making fewer workers work harder and longer) and decreasing the share of income going to labour on the other (paying workers less in real terms).

The second was the expansion of private capital into two new areas: first through the expropriation of the remaining ‘commons’ in the Global South, releasing value which had previously been embedded in nature and hence unavailable for the purposes of accumulation; then through privatising state-owned industries and public services, providing resources which-potentially at least-could be used directly for production rather than in the process of realisation or as part of the social wage.

The third was the emergence of new centres of capital accumulation outside the established core of the world system in East Asia and above all, in China, which contributed to a partial restoration of profitability as a manufacturer of cheap consumer goods for Western and, above all, US import markets, and as the source of loans to the US through Treasury Bonds, which are then loaned again to American companies and consumers.

The fourth, itself a result of profit rates failing to consistently reach what capitalists considered acceptable levels, was a fall in the proportion of surplus value being invested in production and the rise in the proportion being saved, to the point where the latter became greater than the former. The need to find profitable uses for surplus capital, where productive investment was insufficiently attractive, tended to draw industrial capitalists towards financial speculation. This did not mean that industrial capital became subordinated to financial capital – rather, their interests converged.

A series of murals painted by the Tribal Women's Artist Collective from Hazaribagh. The collective attempts to keep tribal artistic traditions alive in the face of population displacement from tribal areas due to the spread of mining and the conflict between the India army and Maoist guerillas. The designs and styles are unique to each individual artist and were traditionally passed down from mothers to daughters through the generations. Photo: Panos Pictures/Robert Wallis

The turn to finance had implications beyond a shifting focus of investment, which tends to be compressed into the term ‘financialisation’. But among all the complexities of arbitrage, derivatives, hedge funds and the rest, there are two essential points about financialisation which need to be understood. One is that, financial speculation, like several of the factors discussed here, can increase the profits of individual capitalists at the expense of others, but cannot create new value for the system as a whole. The other is that, in so far as profits were raised, one aspect of financialisation became more important than any other and consequently needs to be considered as a factor in its own right.

This, the fifth and final factor, was a massive increase in consumer debt. Credit became crucially important in preventing the return to crisis only after the post-1982 recovery had exhausted itself. In so far as better-off working class people have spent borrowed money on commodities which are above the minimum needed to reproduce their labour, it is a response to their situation under neoliberalism. But the main reason for increased debt has been the need to maintain personal or familial income levels.

Men transporting baskets of coal onto railway carriages at Sauanda railway yard. Most of the workers have migrated to work in the area having been displaced from their traditional livelihoods in the countryside. Lacking title deeds for land on which they have farmed and hunted for millennia, the rural adivasi communities are being displaced to make way for new industrial developments planned to capitalise on the land's mineral wealth. Photo: Panos Pictures/Robert Wallis

The points that Patnaik, Davidson and several others have been making, with increasing urgency in recent years, is that the freeing of finance capital from all social obligations like priority sector lending targets and differential interest rates, not only increases its profitability, even while pushing petty producers and small capitalists deeper into crisis, but also allows it to pursue its own profit-seeking ways over a global terrain, which has the effect of subjugating the State to the thralldom of internationalised finance capital.

In short, financial liberalisation is the process through which a fundamental change is enforced on the bourgeois State: from being an entity apparently standing above society and intervening for the ‘social good’, which means keeping in check to some extent the rapacity of big capital, even while promoting it and defending its monopoly privileges, the State becomes exclusively dominated by financial interests (with which big corporate interests are closely enmeshed) and loses its relative autonomy vis-a-vis such interests. We have not the ‘rolling back’ of the State as neo-liberal ideologues suggest, but State intervention in the exclusive interests of finance capital.

[‘Neoliberalism: From One Crisis to Another, 1973-2008’, Neil Davidson, Senior Research Fellow at the University of Strathclyde and a member of the Editorial Board of the journal International Socialism.]