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What Else is Wrong with Globalization

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Globalization: Global Agribusiness Hammering Away At The Foundations Of Indian Society


RINF, Countercurrents, Global Research

https://twitter.com/colin_todhunter

According to the World Bank in the nineties, it was expected (and hoped) that some 400 million people in Indian agriculture would be moving out of the sector by 2015. To help them on their way, farming had to be made financially non-viable and policies formulated to facilitate the process.

Food and trade policy analyst Devinder Sharma describes the situation: 

“India is on fast track to bring agriculture under corporate control... Amending the existing laws on land acquisition, water resources, seed, fertilizer, pesticides and food processing, the government is in overdrive to usher in contract farming and encourage organized retail. This is exactly as per the advice of the World Bank and the International Monetary Fund as well as the international financial institutes.” 

He notes that in its 2008 World Development Report, the World Bank wanted India to hasten the process by accelerating land acquisitions and launching a network of training institutes to train younger people in rural areas so as to make them eligible for industrial work. This is now happening, especially the highly contentious push to facilitate private corporations' access to land, which has been sparking mass protests across the country. 

Sharma describes how US subsidies and global trade policies work to benefit hugely wealthy agribusiness corporations, while serving to cripple the agricultural sectors of poorer countries. The massive subsidies doled out by the US to its giant agribusiness companies lower global produce prices and buck markets in favour of Washington. The US has also included non-trade barriers (such as various health standards and regulations) to keep agricultural imports out. At the same time, India has opened its markets and support for its own farmers is being cut. Farmers are thus being left to the vagaries of a global market slanted in favour of US interests.

As India's farmers face increasing financial distress and foreign private players try to move in to secure land and the seed, food processing and food retail sectors, what is happening courtesy of compliant politicians is tantamount to cannibalizing the country at the behest of foreign interests. 

Western agribusiness has already gained an influential foothold in India and many of the country’s national public bodies. Along with US food processing giants Cargill and Archer Daniels Midland, agribusiness aims to recast the rural economy (and thus Indian society, given that hundreds of millions depend on it for a living) according to its own needs. This would mean eventually moving over 600 million (never mind the previously mentioned figure of 400 million) who depend on agriculture and local food processing activities into urban areas.

Monsanto already dominates the cotton industry in the country and is increasingly shaping agri-policy and the knowledge paradigm by funding agricultural research in public universities and institutes (see here). Moreover, public regulatory bodies are now severely compromised and riddled with conflicts ofinterest where decision-making over GMOs are concerned. 

But this is the nature of the 'globalization' agenda: the goal is to ‘capture’ and ‘exploit’ foreign markets and their policy/regulatory bodies. The culture of neoliberalism is exemplified by APCO Worldwide, a major ‘global communications, stakeholder engagement and business strategy’ company that Narendra Modi has been associated with in the past. In APCO’s India Brochure, there is the claim that India’s resilience in weathering the global downturn and financial crisis has made governments, policy-makers, economists, corporate houses and fund managers believe that India can play a significant role in the recovery of the global economy in the months and years ahead. APCO describes India as a trillion dollar market.

No mention of ordinary people or poor farmers. The focus is on profit, funds and money because for the readers of such documents all of this constitutes ‘growth’ – a positive sounding notion sold to the masses that in reality means corporate profit. It forms part of an ideology that attempts to disguise the nature of a system that has produced austerity, disempowerment and increasing hardship for the bulk of the population and the concentration of ever more wealth and power in the hands of the few who now dictate policies to nation states.

Take a brief look at what happened in Britain when the neoliberal globalization strategy took hold there. As with Modi, Margaret Thatcher was a handmaiden to rich interests.

During the eighties, the Thatcher government set the wheels in motion to shut down the coal mining industry. The outcome destroyed communities across the country, and they have never recovered. Crime-ridden, drug-ridden and shells of their former selves, these towns and villages and the people in them were thrown onto the scrapheap. The industry was killed because it was deemed ‘uneconomical'. And yet it now costs more to keep a person on the dole than it would to employ them at the minimum wage, the country imports coal at a higher cost than it would to have kept the pits open and Britain has to engage in costly illegal wars to secure its oil and gas energy needs, which coal could largely provide (Britain has over 1,000 years of coal supply in the ground). In fact, before 1970, Britain got all its gas from its own coal.

The economics just do not add up. Former miners’ leader Arthur Scargill fought to save the mining industry and now asks where is the sense in all of this (see thisthis and this).   

The same happened across the manufacturing sector, from steel to engineering to shipbuilding. And a similar process occurred in the fishery and agriculture sectors. In 2010, there were over eight million unemployed (over 21 percent of the workforce), despite what the official figures said.

Britain decided to financialize its economy and move people out of manufacturing to integrate with a neoliberal globalized world order. Ordinary people’s livelihoods were sacrificed and sold to the lowest bidder abroad and the real economy was hollowed out for the benefit of giant corporations who now have near-monopolies in their respective sectors and record massive profits. People were promised a new service-based economy. Not enough jobs materialized or when they did many soon moved to cheap labour economies or they were automated. 

Although it’s a vastly different country, if we look at agriculture in India, a similar trend is seen. Almost 300,000 farmers have taken their lives in India since 1997 and many more are experiencing economic distress or have left farming as a result of debt, a shift to cash crops and economic ‘liberalization’.

In a recent TV interview, Devinder Sharma highlighted the plight of agriculture:

“Agriculture has been systematically killed over the last few decades… the World Bank and big business have given the message that this is the only way to grow economically… Sixty percent of the population lives in the villages or in the rural areas and is involved in agriculture, and less than two percent of the annual budget goes to agriculture… When you are not investing in agriculture, you think it is... not performing. You are not wanting it to perform... Leave it to the vagaries or the tyranny of the markets… agriculture has disappeared from the economic radar screen of the country… 70 percent of the population is being completely ignored…”

As policy makers glorify ‘business entrepreneurship’ and ‘wealth creation’ and acquiesce to hugely wealthy individuals and their corporations, it largely goes unrecognized that farmers have always been imbued with the spirit of entrepreneurship and have been creating food wealth for centuries. They have been innovators, natural resource stewards, seed savers and hybridization experts. But they are now fodder to be sacrificed on the altar of US petro-chemical agribusiness interests.

In his interview, Devinder Sharma went on to state that despite the tax breaks and the raft of policies that favour industry over agriculture, industry has failed to deliver; but despite the gross under-investment in agriculture, it still manages to deliver bumper harvests year after year:

“In the last 10 years, we had 36 lakh crore going to the corporates by way of tax exemptions... They just created 1.5 crore jobs in the last ten years. Where are the exports? … The only sector that has performed very well in this country is agriculture... Why do you want to move the population... Why can’t India have its own thinking? Why do we have to go with Harvard or Oxford economists who tell us this?” (36 lakh crore is 36 trillion; 1.5 crore is 15 million)

It all begs the question: where are the jobs going to come from to cater for hundreds of millions of former agricultural workers or those whose livelihoods will be destroyed as transnational corporations move in and seek to capitalize industries that currently employ tens of millions (if not hundreds of millions)?

The genuine wealth creators, the farmers, are being sold out to corporate interests whose only concern is to how best loot the economy. As they do so, they churn out in unison with their politician puppets the mantra of it all being in the ‘national interest’ and constituting some kind of ‘economic miracle’. And those who protest are attacked and marginalised. In Britain during the eighties, it was a similar situation. Workers' representatives portrayed as the 'enemy within'. 

Through various policies, underinvestment and general neglect, farmers are being set up to financially fail. However, it is corporate-industrial India which has failed to deliver in terms of boosting exports or creating jobs, despite the massive hand outs and tax exemptions given to it (see this and this). The number of jobs created in India between 2005 and 2010 was 2.7 million (the years of high GDP growth). According to International Business Times, 15 million enter the workforce every year (see here).

Again, this too is a global phenomenon.

Corporate-industrial India is the beneficiary of a huge global con-trick: subsidies to the public sector or to the poor are portrayed as a drain on the economy, while the genuinely massive drain of taxpayer-funded corporate dole, tax breaks, bail outs and tax avoidance/evasion are afforded scant attention. Through slick doublespeak, all of this becomes redefined necessary for creating jobs or fueling ‘growth’. The only growth is in massive profits and inequalities, coupled with unemployment, low pay, the erosion of welfare and a further race to the bottom as a result of secretive trade agreements like the TTIP.

India is still a nation of farmers. Around two thirds of the population in some way rely on agriculture for a living. Despite the sector’s woeful neglect in favour of a heavily subsidized and government-supported but poorly performing industrial sector, agriculture remains the backbone of Indian society.

Notwithstanding the threat to food security, livelihoods and well-being, the type of unsustainable corporate-controlled globalized industrial agriculture being pushed through in India leads to bad food, bad soil, bad or no waterbad health, stagnant or falling yields and ultimately an agrarian crisis. It involves the liberal use of cancer-causing pesticides and the possible introduction of health-damaging but highly profitable GMOs.

There was a famous phrase used in the eighties in Britain by the former Prime Minister Harold McMillan. He accused the Thatcher administration of 'selling the family silver' with its privatization policies and the auction of public assets that ordinary people had strived to build over many decades of dedicated labour. 

As Modi presses through with his strident neoliberal agenda and seeks to further privatize India's agricultural heritage, it begs the question: is it not tantamount to turning in on yourself and destroying the home in which you live? 

Globalization – Global Agribusiness Hammering Away At The Foundations Of Indian Society 

According to the World Bank in the nineties, it was expected (and hoped) that some 400 million people in Indian agriculture would be moving...

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Globalization: The Fast Track To Nowhere

Modern culture is an advocate of speed. From urban planning and transport systems, to the food industry and beyond, ‘fast living' cuts deep and...

Globalization: Fast Track To Nowhere

Modern culture is an advocate of speed. From urban planning and transport systems, to the food industry and beyond, ‘fast living’ cuts deep and affects almost every aspect of life.

In terms of distances, things today are more spread out yet are more interconnected than in the past. This interconnectedness has had the effect of shrinking even the largest of distances and is ably assisted by digital communications technology and rapid transit systems. Airports and metro transport links are being extended or built, huge concrete flyovers cut through neighbourhoods and separate communities from one another and employment is being centralised in out of town business parks or city centre office blocks. Speed of communications and transport narrows the distances.


Encouraging further urban sprawl is of course highly profitable for the real estate, construction, automobile and various other industries (1). It is not that we need this type of urban planning and development, but powerful economic interests and their influence in/over governments dictate it’s the type we get.


Speed and high-energy living have become an essential fact of life. In the process, our communities have become disjointed and dispersed. We have sacrificed intimacy, friendship or neighbourliness for a more impersonal way of accelerated living. And the process continues as rural communities are uprooted and hundreds of millions are forced into cities of ever-increasing sizes to indulge in the fast life.   


In the virtual world, friends possibly half the world away are made and ‘defriended’ at the click of an icon. Likes and dislikes are but passing fads. Meaningful social activism has been trivialised and reduced to the almost meaningless clicking of an online petition. It’s more convenient and quicker than taking to the street. After the near destruction of working class movements in many countries, this is what ‘protest’ has too often become.


In the ‘real’ world, where ‘clicking’ just doesn’t cut it, how to physically move from A to B as quickly as possible dominates the modern mindset - how to get to work, the airport, to your kids’ schools, the hospital or the shopping mall, which are increasingly further away from home. Many now appear to spend half their lives in transit in order to do what was once achievable by foot or by bicycle.  


It’s all become a case of how to eat fast, live fast, consume fast, text message fast, Facebook fast and purchase fast. Speed is of the essence. And it seems that the faster we live, the greater our appetites have become. The mantra seems to be faster, quicker, better, more. In a quick-paced, use-and-throw world, speed is addictive.


But there is a heavy price to pay. We are using up the world’s resources at an ever greater pace: the materials to make the cell phone or flat screen TVs; the water to irrigate the massive amounts of grain and land required to feed the animals that end up on the dinner plate as the world increasingly turns towards diets that are more meat based; the oil that fuels the transport to get from here to there, to ship the food over huge distances, to fuel the type of petrochemical agriculture we have come to rely on, or the minerals which form a constituent part of the endless stream of consumer products on the shelves. Greed and the grab for resources not only fuels conflict, structural violence imposed on nations via Wall Street backed economic policies and death and war, but high energy, accelerated living takes a heavy toll on the environment and, if we are honest, on ourselves, in terms of our health and our relationships.


If the type of high energy living outlined above continues, we are heading for a crunching slowdown much sooner than we think. It will be catastrophic as current conflicts intensify and new ones emerge over diminishing resources, whether water, oil, minerals, fertile land or food.

  

The term ‘slow living’ was popularized when Carlo Petrini protested against the opening of a McDonald's restaurant in Piazza di Spagna inRome in 1986. This reaction against fast food sparked the creation of the Slow Food movement. Over time, this developed into other areas, such as Cittaslow (Slow Cities)Slow Living, Slow Travel, and Slow Design. 


What was Carlo Petrini actually originally arguing against? Fast food is food that is grown quickly, eaten quickly and prepared quickly. It is convenience food of dubious nutritional quality that fits in with the belief that the ‘good life’ equates with fast living. It is food that tends to rely on petrochemical pesticides, fertilizers and transport across huge distances. Food that is chemically processed and which relies on hormones, steroids and other similar inputs in order to ‘speed things up’ in terms of crop or animal growth and delivery to plates that may be half a world away from where it is produced by agricultural workers who themselves are undernourished or malnourished (2). It is nature speeded up, but also nature that has been contaminated and distorted and pressed into the service of big oil and agribusiness interests.


On the other hand, slow food tends to imply food that is grown or produced locally and with minimal bio-chemical inputs. It tends to rest on the sourcing of local foods and centuries’ old traditions and ideally sold by neighbourhood farms and stores, not by giant monopolistic retailers that are integral to the fast food industry. Slow food also implies more nourishing and healthy food and agriculture that places less strain on water resources and soil to produce better yields (3) and which does not pollute either body or environment as a result of chemical residues (4) or uproot communities or destroy biodiversity (5). 


Slow food is associated with lower energy inputs. It is less reliant on oil-based factory-processed fertilizers/pesticides and oil-based transportation across lengthy distances, not least because it is organically produced and locally sourced. In their ultimate forms, slow food and living slow can arguably best be achieved via decentralization and through communities that are more self-sustaining in terms of food production/consumption as well as in terms of other activities, including localized energy production via renewables or industrial outputs such as garment making or eco-friendly house building. In this respect, slow living extends to remaking the communities and relearning the crafts and artisan skills we have often lost or had stolen from us.


Ultimately, urban planning and the ‘local’ are key to living slow. No need for the automobile if work, school or healthcare facilities are close by. Less need for ugly flyovers or six lane highways that rip up communities in their path. Getting from A to B would not require a race against the clock on the highway that cuts through a series of localities that are never to be visited, never to be regarded as anything but an inconvenience to be passed through en route to big-mac nirvana, multiplex overload or shopping mall hedonism.
Instead, how about a leisurely, even enjoyable walk or cycle ride through an environment free from traffic pollution or noise, where the pedestrian is not regarded as an obstacle to be honked at with horn, where the cyclist is not a damned inconvenience to be driven off the road or where ‘neighbourhood’ has been stripped of its intimacy, of its local ‘mom and pop’ stores, of its local theatres?
Having jettisoned the slow life for a life of fast living, we are now encouraged to seek out the slow life, not least for example through tourism. The trouble is that with more and more people seeking out the slow life for two weeks of respite, destination slow suddenly became a complete mess. Instead of genteel locals, pristine forests and refreshing air, what you experience is sprawling hotel complexes, endless buses and taxis clogging up the place along with thousands of other tourists.

And the locals – they abandoned the slow life once mass tourism arrived and jumped on the bandwagon of fastness to rent out their rooms at inflated prices, to open restaurants serving fast food that caters to fast tourism. The slow mindset suddenly became abandoned in the quest to make a fast buck from the tourists, and before you knew it, six lane highways arrived, water was gobbled up by tourist complexes and urban sprawl sprawled even further across the once pristine hillsides or beaches.

But that’s what fast living or, to be precise, the system that creates it does. It corrupts and destroys most things that get in its way. It recasts everything in its own image. Even ‘slowness’ has become a bogus, debased commodity sold to the fast living, fast consuming masses.   
What can we do on a practical level that does not result in the debasement of the slow life? Is living slow nothing more than the dreamers mandate for taking us all back a century or two?

For some advocates of slow living, it is about trying to live better in a fast world, perhaps making space to enjoy ‘quality time’. For others, however, it comprises a wide ranging cultural and economic revolution that challenges many of the notions that underpin current consumption patterns and ‘globalization’.

Loosely defined, slow living is nothing new. From Buddha to the social philosopher Ivan Illich in the 1960s and 70s, the philosophy has always been around in different guises and has been accorded many labels. Whether it is anti-globalization, environmentalism, post-modernism, the organic movement, ‘green’ energy, localization or decentralization, these concepts and the movements that sprang up around them have embraced some notion of slowness in one form or another.

In India, the Navdanya organization is wholeheartedly against the destruction of biodiversity and traditional farming practices and communities and presents a radical critique of consumerism, petro-chemical farming and Western agribusiness (6). The views of Vandana Shiva, Navdanya’s founder, are well documented. Shiva advocates a radical shift of course from the one the world (and India) is currently on. Navdanya has even opened a Slow Food Café in Delhi.   

On a general level, again taken loosely, slow living might involve improving the quality of life by merely slowing down the pace of living. In urban planning, for example, it may mean pedestrianising urban spaces and restricting motorized traffic, especially car use. In many European cities cycling is encouraged by offering the public the free use of bicycles. Visit any Dutch city to see that cycling is a predominant mode of transport, which certainly makes a positive contribution to the easy going ambiance.

In the UK, in part as a response to traffic congestion and the negative impacts of motorized transport on communities, a movement emerged in the early nineties to ‘reclaim the streets’, to hand them back to local residents who felt a need to claim ownership of their communities and public spaces, which had essentially been hijacked by commuters or large corporations.   

Living slow may entail slowing down in order to develop some kind of spiritual connection with one’s inner self. It might also involve opting for more environmentally friendly products while shopping, living in more eco-sensitive housing, developing small cottage industries or just generally leading a ‘greener’ lifestyle as a consumer.

But it’s no good adopting a piecemeal, watered-down approach. The root of the problem needs to be addressed. The slow life, whether slow food or slow urban environments, is impossible if we fail to realize that decisions about urban planning, economic activity, investment, products and services, etc, are made through the capture of governments, regulatory agencies and courts by corporations adamant on expanding and perpetuating their dominance (8,9).

In order to achieve any semblance of genuine, lasting change towards a better, slower world, we must eradicate the material conditions that produce and perpetuate class-based exploitation and divisions on an increasingly global level. These conditions stem from patterns of capital ownership and the consequent flow of wealth from bottom to top that occurs by various means of ‘accumulation by dispossession’ (corruption, tax evasion/avoidance, bail outs, ‘austerity’,  ‘free trade’ agreements, corporate taxpayer subsidies, capital market liberalization, etc).

What we need is proper democracy achieved through, for example, common ownership of banks and key industries and a commitment to ‘green’ policies and renewable energy. This entails challenging the oligarchs and their corporations that have colonized almost every aspect of modern living, from healthcare, urban planning, food and agriculture to education and development, in order to effect change that is beneficial to their interests and thereby enslaving us all in the process.



Take action and be informed:

Notes
1)      Vidyadhar Date, 13 December, 2013, Politicians And Bureaucrats Need To Learn Basics About Urban Transport, Countercurrents: http://www.countercurrents.org/date141213.htm
2)      Vandana Shiva, 28 August, 2012, Our Hunger Games, Common Dreams: https://www.commondreams.org/view/2012/08/28-1

3)      Arun Shrivastava, 24 March, 2012, India: Genetically Modified Seeds, Agricultural Productivity and Political Fraud, Global Research: http://www.globalresearch.ca/india-genetically-modified-seeds-agricultural-productivity-and-political-fraud/5328227

4)      Gautam Dheer, 3 Febrary, 2013, Punjab: Transformation of a food bowl into a cancer epicenter, Deccan Herald: http://www.deccanherald.com/content/309654/punjab-transformation-food-bowl-cancer.html
5)      Krishan Kir Chaudhary, July, 2012, Seed Sector in India, Ki Kisan Awaaz: http://www.kisankiawaaz.org/magazine_data/magazine_data_pdf/JULY_2012.pdf

6)      Navdanya, Food Sovereignty , Navdanya.com: http://www.navdanya.org/earth-democracy/food-sovereignty

7)      Corporate Europe Observatory, 23 October, 2013, Unhappy Meal: The European Food Safety Agency’s independence problem, CEO: http://corporateeurope.org/efsa/2013/10/unhappy-meal-european-food-safety-authoritys-independence-problem

8)      Corporate Europe Observatory, 17 December, 2013, Civil society groups say no to investor-state dispute settlement in EU-US trade deal, CEO: http://corporateeurope.org/trade/2013/12/civil-society-groups-say-no-investor-state-dispute-settlement-eu-us-trade-deal



Pope Francis & the globalization of indifference

In the midst of massive global inequality and economic austerity, Pope Francis’ embrace of frugality has fundamentally changed the Vatican’s narrative and breathed new life into the religious institution.

Against the backdrop of his damning critique of economic disparity, many can agree that the images of Pope Francis embracing the disfigured and washing the feet of convicts radiate the kind of humility that has been undermined by the singular dominance of capitalism and its self-centered value system.

Regardless of what faith or philosophy one subscribes to, the relevance of the Pope’s message – that capitalism has grown unmanageably reckless and tyrannical – cannot be shied away from.

The pontiff’s concept of the ‘idolatry of money’ has touched every facet of modern society. It is present in neoliberal leaders who slash social services and practice an unrestrained brand of capitalism. It’s in lobby groups and the corporate CEOs, bankers, and hedge fund managers that pull the strings of‘democracy’ from behind the scenes. It’s in environmental degradation stemming from the mass production of consumer goods under the wasteful planned obsolescence model.

It’s also in the immoral hegemony of the military-industrial-complex; in the drive to patent organisms, plants, and animals; and in the pop-culture circus that incentivizes the unchecked dominance of consumerism, self-absorption and narcissism.

Former leaders of the Catholic Church have made similar criticisms, but it is Francis’ ability to communicate to laymen and his willingness to embrace those on the margins of society that set him apart from the gold, scandal and pomp that the Vatican has become known for.

The Pope’s reformist activism, his frugality, and his economic and political views can shape the thinking of world’s billion-strong community of Catholics, but can also create social rifts generated by those opposed to his populist philosophy.

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Towards the Globalization of CIA Torture and Rendition

cia

by Jeff Lincoln

A report released in early February by the Open Society Justice Initiative titled “Globalizing Torture: CIA Secret Detention and Extraordinary Rendition” establishes that the Central Intelligence Agency, acting under the direction of the highest levels of the US government, has utilized a global network of secret prisons, foreign intelligence agents, and interrogation and torture centers to send detainees to without any legal protections.

This arrangement is worldwide and includes the involvement of at least 54 different countries touching almost every continent.

There is enormous diversity among the countries involved. They include Middle Eastern countries such as Egypt, Pakistan, Syria and Jordan, which carried out the torture on suspects that the CIA rendered to them. Poland, Lithuania, Romania and Thailand hosted secret prisons operated by the CIA where detainees could be held clandestinely and have interrogations or torture conducted directly by American intelligence operatives.

European nations such as Macedonia, Georgia, and Sweden detained and delivered suspects to the CIA to be tortured. Larger countries such as Britain or Germany conducted some of the interrogations themselves while smaller countries such as Iceland, Denmark, Belgium, or Greece provided intelligence, logistical support, use of airspace, etc.

On the whole, the report stands as an indictment against all of Washington’s allies and client states in its self-proclaimed “war on terror.”

The Australian government stands implicated in the rendition of Mamdouh Habib, an Australian national, to Egypt where he was tortured and then later transferred to Guantanamo Bay where he was detained until he was released without charge in 2005.

Egypt stands as the country that has interrogated, tortured and abused the most people subject to extraordinary rendition. The relationship between the US and Egypt dates back to the Clinton administration that used the country almost exclusively for its rendition program, which was dramatically ramped up after September 11, 2001.

Italy’s secret services played a role in the abduction of Abu Omar, an Egyptian cleric who was previously given asylum in Italy but was abducted in Milan in 2003; he was then placed on a flight to Egypt. Italian authorities authorized some 46 stopovers by CIA operated aircraft at Italian airports.

The United Kingdom, the country that enjoys the closest relationship with US imperialism, has extensive involvement with America’s rendition program. In addition to providing airspace, MI6 and other British intelligence worked hand in glove with the CIA to abduct and interrogate suspects. Omar Deghayes, a Libyan national but a British resident was arrested in 2002 and transported by US and British intelligence agents to Bagram, where he was subjected to abuse. After interrogation by MI5 agents, he was sent to Guantanamo where he underwent further physical abuse, suffering a broken finger, a broken nose, and damage to his right eye.

In 2004, the British government arranged to have a former member of the Libyan Islamic Fighting Group, Sami al-Saadi, rendered into Libyan custody by approaching him in China and convincing him to fly to the British embassy in Hong Kong where he would be allowed to return to the UK. Instead, his whole family was taken into custody in Hong Kong and flown over to Libya where Mr. al-Saadi remained for six years and was subjected to torture by physical beatings and electric shocks.

While the report sheds some light on what countries are involved, the numbers of individuals subjected to rendition remains unknown. By 2005, it is estimated that about 150 persons were rendered to foreign countries according to admissions made by then-president George W. Bush. The real number is likely much higher, as Egypt alone has had to acknowledge that it received sixty to seventy terror suspects since September 11, 2001. Human Rights Watch has attempted to compile a list of persons who have been held in CIA prisons, and they have identified almost forty people who have either gone missing or whose whereabouts are unknown.

There are dozens more countries detailed in the report than just the ones mentioned above. Still, the report is extremely limited in scope in that it does not document transfers or detentions by any agency other than the CIA. It does not include the detention practices of the Defense Department, for example, and its notorious facilities in Guantanamo Bay or Afghanistan. Moreover, what is known is only based on the experiences of 139 individuals who have been released from custody. Nevertheless, it is now clear that the US government has been running a detention and “enhanced interrogation” operation with tentacles that span the globe.

It appears likely that the United States intentionally sought out the widespread involvement of so many countries to ensure that those who might later nominally reject these practices would themselves be so implicated that they would be unwilling to publicly expose the details of Washington’s dirty deeds.

Indeed, none of the countries mentioned in the report, save one, has even admitted any culpability for their participation in gross human rights violations. The lone exception is Canada, which assisted in the rendition of Canadian citizen Maher Arar in 2002 to Syria where he was tortured. A hastily conducted commission placed blame on the Royal Mounted Police but absolved those higher up in government of any responsibility. Other nations, such as Britain, Sweden and Australia have quietly settled lawsuits alleging their participation but have made no admission of liability.

As a matter of fact, far from acknowledging their complicity in abduction, rendition, and torture, many of the countries in the report were publicly denouncing these practices by the US government at the same time they were secretly abetting them.

A number of liberal and human rights organizations have reacted to the revelations in the Open Society Justice Initiative report by calling for and supporting the efforts of international tribunals to hear cases brought against officials of some of the countries complicit in assisting in the rendition of persons by the US Government.

While there are some actions pending in the European Court of Human Rights and other high courts against some of the countries named in the report for their role in assisting in rendition, the cases will have no impact on the operations of the CIA.

Setting aside the obvious fact that cases can only be brought by individuals whom the CIA has already decided to release, the outcome of these actions hinge on the narrow issue of the extent to which the participating countries knew or should have known torture was likely to occur. This glosses over the more fundamental issue that, unlike extradition, extraordinary rendition is, by definition, a transfer without legal process. In fact, the whole CIA program is designed to place detainee interrogations completely beyond the reach of law. Moreover, the US government has refused to recognize the jurisdiction of international courts of human rights.

President Barack Obama for his part, despite making claims of reversing the Bush-era CIA policies, has further escalated the crimes committed by his predecessor.

In January 2009, Obama issued a series of executive orders that purported to close down then existing CIA detention facilities and also created a task force to examine rendition practices and make recommendations to ensure humane treatment. These orders were nothing more than a sham to conceal the fact that, rather than restricting the ability of the CIA to conduct extraordinary renditions, the orders were purposely crafted to preserve it.

While Obama has ordered the CIA to shut down certain detention facilities, the directive specifically exempts facilities designed to hold people on a temporary or transitory basis. In other words, the executive order essentially codifies the CIA’s authority to detain suspects and then to render them to other countries to face interrogation, trial, or worse. Furthermore, if the CIA wanted the detainees to remain in the custody of the United States, they could be sent to a facility operated by the Department of Defense or kept offshore on a Navy vessel.

The task force created by Obama’s order functions merely as a fig leaf for the continuation of Bush-era policies. The report, which was completed in 2009, has not been made public and is not binding on any agency. However, as an example of its toothlessness, a Justice Department press release disclosed that one of the recommended safeguards was relying on assurances from the receiving country that the detainees would be treated humanely.

The Justice Department under Obama appointee Eric Holder has closed inquiries into the treatment of over 100 detainees who were in CIA custody overseas, including several who died while in custody, stating that no criminal charges would be pursued.

The Globalization of “Fast Food”. Behind the Brand: McDonald’s

The Globalization of "Fast Food". Behind the Brand: McDonald’s

The Above image of the McDonald label, Copyright McDonald’s 2011

This article was first published in The Ecologist

In the first of a major new series following on from the ground breaking Behind the Label, Peter Salisbury takes a look at one of the biggest brands in the world – McDonald’s – and asks: has the burger giant done enough to clean-up its act?

Chances are that you have had a McDonald’s meal in the past or if not, you certainly know a lot of people who have. It’s the biggest fast food chain in the world, with 32,000 outlets in 117 countries. The clown-fronted burger outfit employs a staggering 1.7 million people, and in the first three months of 2011 alone it made $1.2bn in profits on the back of revenues of $6.1bn. The company has come in for huge amounts of criticism over the past 20 years, for the impact it has on the diets of people worldwide, its labour practices and the impact its business has had on the environment. From Fast Food Nation to Supersize Me by the way of the McLibel trials of the 1990s, plenty has been written and broadcast to tarnish the golden arches’ shine.

Declining sales in the early 2000s, which saw franchises being shut for the first time in the company’s history, caused a major rethink of the way McDonald’s operates, and its recent rhetoric has been that of a firm with a newly discovered zeal for ethical end eco-friendly practices, garnering praise from champions as unlikely as Greenpeace and the Carbon Trust. But is this just marketing hype or has McDonald’s had a genuine change of heart?

The answer is yes and no. First of all, because of the way the company is run, it’s hard to generalise. Around 80 per cent of McDonald’s outlets are run by franchisees who have to meet standards set by the company, but who can – and do – go above and beyond them. Further, McDonald’s branches are run by country and regional offices, each of which are subject to domestic standards. The production of much of the raw products which go into McDonald’s meals, from burger patties to sauces, is subcontracted to different suppliers, making it impossible to assess the company in terms of a single golden standard. Its sole global supplier (for soft drinks) is Coca-Cola.

The UK branch of the company has certainly made great strides since the 1990s, when it became embroiled in the 1997 McLibel court case, in which McDonald’s Corporation and McDonald’s Restaurants Limited sued Helen Steel and Dave Morris, a former gardener and a postman, for libel after they published a series of leaflets denouncing the company.

Exploitation

The judge overseeing the case decided that, although the pair could not prove some of their accusations – that McDonald’s destroyed rainforests, caused starvation in the third world or disease and cancer in developed countries – it could be agreed that the company exploited children, falsely advertised their food as nutritious, indirectly sponsored cruelty to animals and paid their workers low wages: a major blow to the brand in an age of increasing consumer-consciousness.

Since then, the UK branch has committed to a number of initiatives to improve its image, running an aggressive marketing campaign at the same time to portray itself as an ethical employer which is both farmer and eco-friendly. It has also moved to become more transparent, putting ingredients lists for all of its products on its website and setting up another website, Make Up Your Own Mind, inviting customers to voice concerns and publishing accounts of critics’ visits to its production sites.

All of this should be taken with a grain of salt however. It’s not surprising that a multibillion-dollar corporation, which has been hurt in the past by concerns over its practices, will do its utmost to sell itself as a reformed character. And it’s suspicious that any web search of the company brings up a hit list of sites almost exclusively maintained by the company.

Yet research conducted by the Ecologist shows that in many areas the company has improved its record of ethical and environmental awareness over the last decade. The company’s burgers, for example, are now 100 per cent beef, and contain no preservatives or added flavours whatsoever. All of McDonald’s UK’s burgers are provided by Germany’s Esca Food Solutions, which claims to maintain rigorous standards at its abattoirs and production plants, and which works closely with 16,000 independent farmers in the UK and Ireland to maintain high standards.

‘No GM’

Since the early 2000s, McDonald’s UK has maintained that none of its beef, bacon or chicken is fed genetically modified grain. Farmers working for McDonald’s have independently confirmed to the Ecologist and Esca that they have a ‘decent’ working relationship with the company.

In 2007, Esca won the UK Food Manufacturing Excellence Awards for its burgers, and in 2010 McDonald’s announced that it was launching a three-year study into reducing the carbon emissions caused by the cattle used in its burgers (cattle account for four per cent of the UK’s emissions). Meanwhile, all of the fish used in Filet-O-Fish and Fish Finger meals in Europe are sourced from sustainable fisheries certified by the Marine Stewardship Council. Fries are largely sourced from McCain’s, the world’s biggest potato supplier, and McDonald’s claims that the vast majority are produced in the UK, again by independent farmers. The fries are prepared in-store and are cooked in vegetable oil containing no hydrogenated fats. At the beginning of the potato-growing season, dextrose – a form of glucose – is added as a sweetener, and salt is added after cooking (the company claims to have reduced the amount of salt used by 23 per cent since 2008).

The bread for McDonald’s buns and muffins is sourced from a single unnamed supplier based in Heywood, Manchester, and Banbury, Oxfordshire. McDonald’s would not comment on where it sources the grain for the bakeries but says once more that it does not buy genetically modified crops. Meanwhile, the company has been working with its suppliers and franchise-holders to make sure that they are as energy efficient as possible. In 2010, The Carbon Trust awarded McDonald’s its Carbon Trust Standard for reducing its overall carbon emissions by 4.5 per cent between 2007 and 2009. The company is currently experimenting with a series of energy initiatives based around turning its waste, from packaging – which is 80 per cent recycled – to vegetable oil into energy.

Certification

Since 2007, the company – which is one of the world’s biggest coffee retailers – has committed to selling only Rainforest Alliance certified coffee. Although the certification body has certainly been responsible for improving conditions and practices in many farming operations worldwide, it has been the subject of controversy – most recently after an undercover investigation by the Ecologist revealed allegations of sexual harassment and poor conditions for some workers at its certified Kericho tea plantation in Kenya which supplies the PG Tips brand.

Certification issues aside, McDonald’s has undoubtedly become considerably better at taking criticism. In 2006, Greenpeace activists stormed McDonald’s restaurants across the world dressed in chicken suits in protest at the destruction of the Amazon rainforest, which they attributed to greedy soy producers – who in turn were selling their produce to chicken farms, of whom McDonald’s was a major customer. They subsequently praised the fast food chain for leading a unified response among soy buyers, pressuring producers to adopt a ‘zero destruction’ approach to growing their crops. Despite praise from Greenpeace, the Carbon Trust and personalities such as Jamie Oliver who have praised the company for its ethical stance on meat and buying its produce locally, the firm is by no means perfect.

One of the biggest incongruencies in its newly discovered zeal for ethical practices comes from its seemingly differing approaches to the conditions chickens live in depending on whether they produce eggs or are used as meat in Chicken McNuggets and similar meals. The firm proudly trumpets that its UK branch only buys eggs from Lion-certified free-range producers, a laudable effort from a huge buyer of eggs, and that the meat in each nugget is 100 per cent chicken breast (the final product is around 65:35 meat and batter).

Factory farming

Yet by the same token, the company buys most of its chicken from two suppliers, Sun Valley in the UK and Moy Park in Northern Ireland, who are in turn owned by the controversial American firm, Cargill, and Brazil’s Marfrig. Sun Valley has been accused of using intensive chicken farming methods to produce their meat, which campaigners say can typically involve birds being cooped up in giant warehouses for much of their natural lives with barely any space to move. Sun Valley was embroiled in a scandal in 2008 when the activist group Compassion in World Farming secretly filmed poor conditions at its supplier Uphampton Farm near Leominster.

Furthermore, although McDonald’s is happy to advertise the provenance of its beef, dairy products and eggs, it is more circumspect about chicken meat. This may be because up to 90 per cent of the meat it uses in the UK is sourced from Cargill and Marfrag facilities in Thailand and Brazil, where regulations in the farming sector are perhaps less stringent than in the UK.

Meanwhile, the fact remains that despite attempts in recent years to cultivate a more healthy image, McDonald’s primary sales come from fast food in a time when there is increasing recognition that obesity has reached epidemic proportions in the UK and the US. Although the European, and in particular the UK arm of the company, have become increasingly ethically aware, the same cannot be said for the US arm, which uses livestock farmed using intensive methods and fed in some cases on GM crops. And by buying McDonald’s in the UK, you are still buying from the same clown.

Useful links:

McDonalds: www.mcdonalds.co.uk

Greenpeace: www.greenpeace.org.uk

Compassion in World Farming: www.ciwf.org.uk

The Carbon Trust: www.carbontrust.co.uk

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Iranian Foreign Minister Proposes Regional Peace and Cooperation

Iranian Foreign Minister Proposes Regional Peace and Cooperation

by Stephen Lendman

Times editors are so consistently hostile to Iran in their one-sided support for Israel's worst crimes it's surprising they gave Iranian Foreign Minister Javad Zarif op-ed space.

He sent a responsible message from Iran everyone needs to read. He indicated important progress in Lausanne in trying to resolve issues over Tehran's well-known peaceful nuclear program.

Suggesting otherwise is red herring cover for Washington's real objectives: 

  • toppling Iran's government;

  • replacing it pro-Western stooges subservient to US and Israeli interests;

  • giving America another client state;

  • eliminating Israel's main regional rival;

  • controlling Iran's vast oil and gas resources;

  • exploiting its people; and

  • marginalizing and weakening Iran - defying it the right to self-defense.

Iranians aren't about to surrender their sovereign rights. Nor should they. Nor should any nation for any reason.

It's high time the world community no longer tolerates fabricated claims about Tehran's nuclear and other activities. 

It's time to normalize relations responsibly. It's time to break free from hostile US/Israeli policies. 

It's time to realize mutual cooperation matters more than confrontation and destabilizing maliciousness.

Iran is the region's leading proponent of peace, stability and mutual cooperation among all nations.

America, rogue NATO partners, Israel, Saudi Arabia, other Gulf states, and allied despots threaten world peace and security.

Zarif said Iran and P5+1 countries "agreed on parameters to remove any doubt about the exclusively peaceful nature of Iran’s nuclear program and to lift international sanctions against Iran."

"But to seal the anticipated nuclear deal, more political will is required. The Iranian people have shown their resolve by choosing to engage with dignity." 

"It is time for the United States and its Western allies to make the choice between cooperation and confrontation, between negotiations and grandstanding, and between agreement and coercion."

Vital issues affecting all regional nations need addressing responsibly. Iran is a key Middle East player.

It needs to be part of resolving ongoing wars, chaos and turmoil. "(E)ntire countries are being torn to shreds," Zarif stressed.

"…Iran has weathered the storms of instability caused by this mayhem. But we cannot be indifferent to the unfathomable destruction around us, because chaos does not recognize borders."

Iranian interests and concerns go way beyond nuclear issues, Zarif explained. Good relations with all its neighbors is its top priority, he stressed.

He calls Iranian foreign policy "holistic." Destructive "globalization has rendered all alternatives obsolete," he said.

One nation's interests can't be pursued at the expense of others. 
We're all part of the same human race. Ongoing events affect everyone - for better or worse.

"Nowhere are these dynamics more evident that in the wider Persian Gulf region," Zarif explained.

World leaders need to address them responsibly - most of all waging peace, not war.

Iran needs to be included as part "of a collective forum" established to help resolve vexing regional issues.

Ending Yemen's conflict "would be a good place to start," Zarif said. Iran offered a responsible peace plan. It can work if implemented.

It calls for "an immediate cease-fire, humanitarian assistance and facilitation of intra-Yemeni dialogue, leading to the formation of an inclusive, broad-based national unity government," Zarif explained.

More broadly, regional dialogue and engagement "should be based on recognized principles for shared objectives; notably respect for sovereignty, territorial integrity and political independence of all states; inviolability of international boundaries; noninterference in internal affairs; peaceful settlement of disputes; impermissibility of threat or use of force; and promotion of peace, stability, progress and prosperity in the region."

Mutual cooperation can benefit all regional nations hugely - far more then endless conflicts against one nation after another without end.

"The world cannot afford to continue to avoid addressing the roots of the turmoil in the wider Persian Gulf region," Zarif stressed. 

"This unique opportunity for engagement must not be squandered."

Imagine if US officials, EU ones  and Israelis felt the same way. Imagine peace instead of endless wars.

Stephen Lendman lives in Chicago. He can be reached at [email protected] 

His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III."

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.


It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 

US Agribusiness, GMOs And The Plundering Of The Planet

RINF, Counterpunch, Countercurrents, Global Research

Small family/peasant farms produce most of the world’s food. They form the bedrock of global food production. Yet they are being squeezed onto less than a quarter of the planet's farmland. The world is fast losing farms and farmers through the concentration of land into the hands of rich and powerful land speculators and agribusiness corporations.

By definition, peasant agriculture prioritises food production for local and national markets as well as for farmers’ own families. Big agritech corporations on the other hand take over scarce fertile land and prioritise commodities or export crops for profit and foreign markets that tend to cater for the needs of the urban affluent. This process displaces farmers from their land and brings about food insecurity, poverty and hunger.

What big agribusiness with its industrial model of globalised agriculture claims to be doing - addressing global hunger and food shortages - is doing nothing of the sort. There is enough evidence to show that its activities actually lead to hunger and poverty - something that the likes of GMO-agribusiness-neoliberal apoligists might like to consider when they propagandize about choice, democracy and hunger: issues that they seem unable to grasp, at least beyond a self-serving superficial level.

Small farmers are being criminalised, taken to court and even made to disappear when it comes to the struggle for land. They are constantly exposed to systematic expulsion from their land by foreign corporations. The Oakland Institute has stated that now a new generation of institutional investors, including hedge funds, private equity and pension funds, is eager to capitalise on global farmland as a new and highly desirable asset class. Financial returns are what matter to these entities, not ensuring food security.

Consider Ukraine, for example. Small farmers operate 16% of agricultural land, but provide 55% of agricultural output, including: 97% of potatoes, 97% of honey, 88% of vegetables, 83% of fruits and berries and 80% of milk. It is clear that Ukraine’s small farms are delivering impressive outputs.

However, The US-backed toppling of that country’s government seems likely to change this with the installed puppet regime handing over agriculture to US agribusiness. Current ‘aid’ packages are contingent on the plundering of the economy under the guise of ‘austerity’ reforms and will have a devastating impact on Ukrainians’ standard of living and increase poverty in the country.

Reforms mandated by the EU-backed loan include agricultural deregulation that is intended to benefit foreign agribusiness corporations. Natural resource and land policy shifts are intended to facilitate the foreign corporate takeover of enormous tracts of land. (From 2016, foreign private investors will no longer be prohibited from buying land.) Moreover, the EU Association Agreement includes a clause requiring both parties to cooperate to extend the use of biotechnology, including GMOs.

In other words, events in Ukraine are helping (and were designed to help) the likes of Monsanto to gain a firm hold over the country’s agriculture.

Frederic Mousseau, Policy Director of the Oakland Institute last year stated that the World Bank and IMF are intent on opening up foreign markets to Western corporations and that the high stakes around control of Ukraine’s vast agricultural sector, the world’s third largest exporter of corn and fifth largest exporter of wheat, constitute an oft-overlooked critical factor. He added that in recent years, foreign corporations have acquired more than 1.6 million hectares of Ukrainian land.

Western agribusiness had been coveting Ukraine’s agriculture sector for quite some time, long before the coup. It after all contains one third of all arable land in Europe.

An article posted on Oriental Review notes that since the mid-90s the Ukrainian-Americans at the helm of the US-Ukraine Business Council had been instrumental in encouraging the foreign control of Ukrainian agriculture.

In November 2013, the Ukrainian Agrarian Confederation drafted a legal amendment that would benefit global agribusiness producers by allowing the widespread use of genetically modified seeds. Oriental Review notes that when GMO crops were legally introduced onto the Ukrainian market in 2013, they were planted in up to 70% of all soybean fields, 10-20% of cornfields, and over 10% of all sunflower fields, according to various estimates (or 3% of the country’s total farmland).

According to Oriental Review, “within two to three years, as the relevant provisions of the Association Agreement between Ukraine and the EU go into effect, Monsanto’s lobbying efforts will transform the Ukrainian market into an oligopoly consisting of American corporations.”

It amounts to little more than the start of the US colonisation of Ukraine’s seed and agriculture sector. This corporate power grab will be assisted by local banks. Oriental Review says they will only offer favourable credit terms to those farmers who agree to use certified herbicides: those that are manufactured by Monsanto.

Interestingly, the investment fund Siguler Guff & Co has recently acquired a 50% stake in the Ukrainian Port of Illichivsk, which specialises in agricultural exports.

We need look no further than to Ukraine's immediate neighbour Poland to see the devastating impact on farmers that Western agribusiness concerns are having there. Land grabs by foreign capital and the threat to traditional (often organic) agriculture have sparked mass protests as big agribusiness seeks to monopolise the food supply from field to plate. The writing is on the wall for Ukraine.

The situation is not unique to Poland, though; the impact of policies that favour big agribusiness and foreign capital are causing hardship, impacting health and destroying traditional agriculture across the world, from India and Argentina to Brazil and Mexico and beyond.

In an article by Christina Sarich, Hilliary Martin, a farmer from Vermont in the US, encapsulates the situation by saying:
"We are here at the [US-Canadian] border to demonstrate the global solidarity of farmers in the face of globalization. The corporate takeover of agriculture has impoverished farmers, starved communities and force-fed us genetically-engineered crops, only to line the pockets of a handful of multinational corporations like Monsanto at the expense of farmers who are struggling for land and livelihood around the world."
The US has since 1945 used agriculture as a tool with which to control countries. And today what is happening in Ukraine is part of the wider US geopolitical plan to drive a wedge between Ukraine and Russia and to subjugate the country.

While the Transatlantic Trade and Investment Partnership (TTIP) is intended to integrate the wider EU region with the US economy (again 'subjugate' may be a more apt word), by introducing GMOs into Ukraine and striving to eventually incorporate the country into the EU the hope is that under the banner of ‘free trade’ Monsanto’s aim of getting this technology into the EU and onto the plates of Europeans will become that much easier.

US Agribusiness, GMOs and the Plundering of the Planet

Small family/peasant farms produce most of the world’s food. They form the bedrock of global food production. Yet they are being squeezed onto less...

German Intransigence Raises Spectre for ‘Grexit’

Greece’s newly elected government, led by the leftist Syriza coalition that swept into power in January on an anti-austerity platform, finds itself in a highly unenviable position. Athens is burdened by colossal debt, imminent liquidity problems and a looming banking collapse. What is at stake for Greece now is its very ability to survive economically within the euro-zone.

The Syriza coalition emerged from various offshoots of the Greek radical left, which set itself apart from the political mainstream by taking an anti-capitalist position emphasizing wealth redistribution and class struggle, while allying itself with alter-globalization movements and trade unions. The ascension of Syriza represents the most leftward shift in European politics in decades.

Once a negligible force at the ballot box, Syriza has gradually succeeded in commanding support among the wage-earning class and the urban unemployed, who view the coalition as the only political force capable of pulling the country off the trajectory of austerity, imposed by Greece’s creditors – primarily Germany.

The new government of Prime Minister Alexis Tsipras has captured the broad popular support of Greek society as the country faces an asymmetric struggle to negotiate a restructuring of Athens’ debts and a reversal of austerity policies attached to a previous €240 billion bailout agreement, which Germany and the European Central Bank (ECB) remain inflexibly opposed to.

Read the full story on New Eastern Outlook

Nile Bowie is a columnist with Russia Today, and a research affiliate with the International Movement for a Just World (JUST), an NGO based in Kuala Lumpur, Malaysia. He can be reached at [email protected].


First appeared:http://journal-neo.org/2015/04/03/german-intransigence-raises-spectre-for-grexit/

Fast Food Nations: Selling Out To Junk Food, Illness Ad Food Insecurity

The 4th Media, Global Research, RINF and Countercurrents

Western agribusiness, food processing companies and retail concerns are gaining wider entry into India and through various strategic trade deals are looking to gain a more significant footprint within the country. The Knowledge Initiative on Agriculture (KIA) and the ongoing India-EU free trade agreement talks have raised serious concerns about the stranglehold that transnational corporations could have on the agriculture and food sectors, including the subsequent impact on the livelihoods of hundreds of millions. For example, see this on the dismantling of Indian agriculture, this on the KIA and the US neoliberal invasion of India and this on the US-Indo free trade deal.

What it all could mean is a trend towards a handful of big companies determining what food is grown, how it is grown, how it is processed, what is in it and who sells it. In other words, a Western model of intensive petro-chemical farming (aka the 'green revolution') and heavily processed grow-fast chemically-tampered-with food passed through a chain that sees it ending up in Western-style convenience supermarkets or fast-food outlets that rely on industrial farms. From seed to field to plate, the entire process would be handed over to a handful of large corporations whose bottom line is not agricultural sustainability, food security, food democracy or healthy nutritious food, but control and fast profit. 

Look no further than the situation in Africa. Daniel Maingi works with small farmers in Kenya and belongs to the organization Growth Partners for Africa. He says here that the ‘green revolution’ approach is based on Western-style agriculture, with its reliance on fertilizer, weed killers and single crops. Maingi was born on a farm in eastern Kenya and studied agriculture from a young age.

He remembers a time when his family would grow and eat a diversity of crops, such as mung beans, green grams, pigeon peas and a variety of fruits now considered ‘wild’. Following the Structural Adjustment Programmes of the 1980s and 1990s and a green revolution meant to boost agricultural efficiency, the foods of his childhood have been replaced with maize, maize, and more maize.

Maingi says here:

“In the morning, you make porridge from maize and send the kids to school. For lunch, boiled maize and a few green beans. In the evening, ugali, [a staple dough-like maize dish, served with meat]… [today] it’s a monoculture diet, being driven by the food system – it’s an injustice.”

In India, farmers are being displaced and policy makers have been facilitating a reliance on corporate seeds and corporate access to the food processing and retail sectors, both of which have traditionally tended to be small scale and key to supporting local (rural) economies and livelihoods. There are of course major implications for food security/sovereignty and the restructuring of society (see this), but what this could mean for the nation’s diet and health is already clear to see.

Although almost half the nation’s under-5s are underweight (the prevalence of underweight children in India is among the highest in the world, see this), rates of obesity in the country have tripled in the last two decades and the nation is fast becoming the diabetes and heart disease capital of the world (see this).  

Western style fast food outlets have been soaring in number throughout the country. Pizza Hut now operates in 46 Indian cities with 181 restaurants and 132 home delivery locations, a 67 percent increase in the last five years). KFC is now in 73 cities with 296 restaurants, a 770 percent increase. McDonalds is in 61 Indian cities with 242 restaurants as compared to 126 restaurants five years back, a 92 percent increase). According to a recent study published in the Indian Journal of Applied Research, the Indian fast food market is growing at the rate of 30-35 percent per annum (see this).

Of course, the dominant paradigm implies such a trend is positive. The commodification of (corporate) seeds, the manufacturing and selling of more and more chemicals to spray on crops or soil, the opening up fast food outlets and the selling of pharmaceuticals or the expansion of private hospitals to address the health impacts of the modern junk food system is ‘good for the economy’. It’s all 'good for business’ as more cash exchanges hands and certain businesses cartels thrive. And what is good for business is good for GDP growth. And what is good GDP growth is good for everyone, or so we are told.

Transnational food companies now see their main growth markets in Asia, Africa and South America, where traditionally (as in India) people have tended to eat food from their own farms or markets that sell locally-produced foods. Taking Mexico as an example, GRAIN describes how agribusiness concerns are infiltrating farming and transnational food retail and processing companies are taking over food distribution channels and replacing local foods with cheap, processed foods, often with the direct support of the government. Free trade and investment agreements have been critical to this process and an alarming picture is set out of the consequences for ordinary people, not least in terms of their diet and health (see GRAIN’s report here). 

In 2012, Mexico’s National Institute for Public Health released the results of a national survey of food security and nutrition. Between 1988 and 2012, the proportion of overweight women between the ages of 20 and 49 increased from 25 to 35 percent and the number of obese women in this age group increased from 9 to 37 percent. Some 29 percent of Mexican children between the ages of 5 and 11 were found to be overweight, as were 35 percent of the youngsters between 11 and 19, while one in ten school age children suffered from anaemia.

The Mexican Diabetes Federation says that more than 7 percent of the Mexican population has diabetes. Diabetes is now the third most common cause of death in Mexico, directly or indirectly. 

The various free trade agreements that Mexico has signed over the past two decades have had a profound impact on the country’s food system. GRAIN explains that after his mission to Mexico in 2012 the then Special Rapporteur on the Right to Food, Olivier De Schutter, concluded that the trade policies currently in place favour greater reliance on heavily processed and refined foods with a long shelf life rather than on the consumption of fresh and more perishable foods, particularly fruit and vegetables. He added that the overweight and obesity emergency that Mexico is facing could have been avoided, or largely mitigated, if the health concerns linked to shifting diets had been integrated into the design of those policies.

The North America Free Trade Agreement (NAFTA) has led to the direct investment in food processing and a change in the retail structure (notably the advent of supermarkets and convenience stores) as well as the emergence of global agribusiness and transnational food companies in Mexico.

NAFTA required Mexico to provide equal treatment to domestic and foreign investors, with the elimination of rules preventing foreign investors from owning more than 49 percent of a company. It also prohibited the application of certain “performance requirements” such as minimum amounts of domestic content in production and increased rights for foreign investors to retain profits and returns from initial investments.

The Agreement triggered an immediate upsurge of direct investment from the US into the Mexican food processing industry. In 1999, US companies invested $5.3 billion in Mexico’s food processing industry, a 25-fold increase from $210 million in 1987.

Another effect of NAFTA on the Mexican food system was an explosive growth of chain supermarkets, discounters and convenience stores. GRAIN highlights how the food corporations began by colonising the existing, dominant food distribution networks of small-scale vendors, known as tiendas (the corner stores). Tiendas have proved critical to the spread of nutritionally poor food as they are the means by which transnationals and domestic food companies sell and promote their foods to poorer populations in small towns and communities.

According to GRAIN, the tiendas are, however, quickly being replaced by corporate retailers that offer the processed food companies even greater opportunities for sales and profits. By 2012, retail chains had displaced tiendas as Mexico’s main source of food sales. For example, Oxxo (owned by Coca-cola subsidiary Femsa) tripled its stores to 3,500 between 1999 and 2004.26 In July 2012, Oxxo was opening its ten thousandth facility, and is aiming to open its 14 thousandth store sometime during 2015.

For De Schutter, a programme that deals effectively with hunger and malnutrition has to focus on Mexico’s small farmers and peasants. They constitute a substantial percentage of the country’s poor and are the ones that can best supply both rural and urban populations with nutritious foods. His view is in line with numerous official reports that emphasise the key role that such farmers have in providing food security and which also stress the importance of agroecological farming (for instance, see this and this). Likewise, GRAIN argues that Mexico could recover its self-sufficiency in food if there were to be official support for peasant agriculture backed with amounts comparable to the support granted to the big corporations. 

In Mexico, the loss of food sovereignty has induced catastrophic changes in the nation's diet. The writing is on the wall for other countries such as India because this scenario is being played out across the world. (Diet aside, there are other severe deleterious health impacts that result from the indiscriminate use of pesticides that have accompanied the 'green revolution', not least in the Indian state of Punjab which has become known as a 'cancer epicentre': see this.) 

The situation is encapsulated by Vandana Shiva who outlines the consequences of opting for a food system that is based on a corporate-controlled, chemical-intensive system based on diminishing variety, fast food and fast profits:

“If we grow millets and pulses, we will have more nutrition per capita. If we grow food by using chemicals, we are growing monocultures — this means that we will have less nutrition per acre, per capita… The agrarian crisis, the food crisis and the nutrition and health crisis are intimately connected. They need to be addressed together. The objective of agriculture policy cannot be based on promoting industrial processing of food. The chemicalisation of agriculture and food are recipes for “denutrification”… The Green Revolution displaced pulses, an important source of proteins, as well as oilseeds, thus reducing nutrition per acre. Monocultures do not produce more food and nutrition. They take up more chemicals and fossil fuels, and hence are profitable for agrochemical companies and oil companies. They produce higher yields of individual commodities but a lower output of food and nutrition.” (See here, ‘The Real Hunger Games’)




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India’s Sham Democracy

India's Sham Democracy

by Stephen Lendman

India is like America. Democracy is fantasy. Two major parties dominate. 

In India most often. Others compete. At most, some become junior coalition partners.

Congress and Bharatiya Janata Party (BJP) governance control things. They take turns. They're largely two sides of the same coin.

Indian elections ran in nine phases. From April 7 to May 12. The longest election in Indian history. Over 800 million were eligible to vote.

Over 8,000 candidates competed. They did so for India's Lok Sabha. It's House of the People. Its lower house. Parliamentarians represent 543 constituencies.

Turnout exceeded 66%. Highest ever for general elections. On May  16, results were announced. 

Ruling Congress party candidates were trounced. They won 44 of 554 seats. BJP aspirants won a majority 282 seats. The BJP National Democratic Alliance (NDA) won 336 seats.

Money power triumphs no matter who wins. Like in America. In Europe. In Israel. Most elsewhere . Democracy is fantasy.

Narendra Modi is India's new prime minister. He's no democrat. Or agent of change. 

He's pro-business writ large. He's notoriously anti-populist. He's neoliberally one-sided. He represents strongman rule. His Gujarat tenure was ruthless. 

He was responsible for its 2002 massacre. Up to 2,000 Muslims were slaughtered. Thousands more were injured. Hundreds went missing.

Children were burned alive. Rape and other atrocities were committed. Widespread looting occurred. Property destruction was vast.

Modi initiated what happened. He condoned it. He remains unaccountable. In 2012, a Supreme Court-appointed Special Investigation Team cleared him of involvement.

Muslims justifiably were enraged. Cold-blooded mass murder was whitewashed. State terrorism triumphed. Perhaps more of the same ahead with Modi in charge.

Not according to New York Times editors. They headlined "With Narendra Modi, a Change in India."

They praised what demands denunciation. They lied claiming Modi's victory "reflects a changing country more willing to extend governance to those outside the established elite."

Obama congratulated him. He invited him to Washington. Modi promised "economic revival."

"He set a good tone…(He) promised to work for the good of all Indians," said Times editors. He omitted explaining which ones he means.

Wall Street Journal editors headlined "India's Modi Moment," saying:

"(H)e has a rare mandate to enact (greater) market-opening reforms" than already. "Indian equities soared…"

"Mr. Modi's record offers reason for optimism." He's an "archetypal energetic executive…(He) welcomes foreign investment."

"He has a gut sense of the economic aspirations of ordinary Indians."

"Picking (men) of ideas to balance his own strength as a man of action would be a winning combination."

Washington Post editors called Modi "a compelling alternative as a leader with a record of overseeing a decade-long boom in the state of Gujarat, primed by aggressively tackling infrastructure and energy bottlenecks, paring excessive regulation and attracting private investment." 

"He has promised to do the same for the country at large, sketching ambitious plans for new cities linked by bullet trains."

Arundhati Roy calls India's model one "designed to uphold the consensus of the elite for market growth" at the expense of fairness. 

It "metastasized into something dangerous." High-level corruption reflects it. So does hardline rule.

Roy compared Hindu persecution of Muslims to Hitler's treatment of Jews. "What kind of India do they want," she asked earlier?

She described a "limbless, headless, soulless torso left bleeding under the butcher's clever with a flag driven deep into her mutilated heart?"

She commented on India's election, saying:

"…"(W)e're always told there's going to be a trickle-down revolution."

"You know, that kind of opening up of the economy that happened in the early '90s was going to lead to an inflow of foreign capital, and eventually the poor would benefit."

"Well, trickle down hasn't worked, but gush up has. After the opening up of the economy, we are in a situation where…100 of India's wealthiest people own 25 percent of the GDP."

"Whereas more than 80 percent of its population lives on less than half a dollar a day."

Roy noted horrendous malnutrition, hunger and human misery.
India's growing middle class comes at the expense of a "much larger (permanent) underclass."

Small farmers among others suffer. Around 250,000 committed suicide. "If you try to talk about (it) on Indian television channels, you actually get insulted…"

Roy's new book is titled "Capitalism: A Ghost Story." It explains well. It makes a strong case. It shows globalized capitalism created unprecedented inequality, violence, racism and ecocide.

Vijay Prashad is an Indian historian/journalist/sharp critic of New Delhi policy.

He called BJP candidates winning decisively a clear mandate. He's not encouraged. He expects worse of what voted rejected ahead.

He commented on Hinduism's strong pro-Israeli sentiment. "Hindutva and Zionism shared a muscular nationalism that developed - because of their context - a programmatic apathy to Islam and Muslims," he said.

In 1884, BJP candidates won two seats. This year "the tide turned," said Prashad.

It did so despite Modi's genocidal legacy. Anti-Congress sentiment mattered more.

India has "a powerful Hindu Right government with a very weak opposition," Prashad added. "It is the worst of all worlds."

Congress prioritized neoliberal policies. They combined "liberalization, privatization and globalization."

Prashad calls it "an explosive mix that brought India in line with the planet's rising inequality."

It's grown steadily for years. Especially so in the new millennium. Extreme depravation affects around "680 million Indians."

Congress policies exacerbated things. Inequality escalated during its tenure. Voters reacted.

Its candidates were rejected. BJP ones replaced them and then some. Both parties represent monied elites. Corruption is deep-seated.

BJP and Congress largely govern the same way. Prashad said Modi's Gujarat "malnutrition rate is so high that it is worse than the average…in sub-Saharan Africa."

Its development model is exclusively pro-business. Modi family-controlled companies profit handsomely.

He "ran as a development candidate with a carefully calibrated argument," said Prashad.

He turned truth on its head. He claimed neoliberalism didn't create inequality. He blamed corruption. He "tied it to the mast of Congress."

He rode an anti-ruling party wave. He did so successfully. He reflects hard right Hindu nationalist extremism.

He'll form his government going forward. He'll have to decide whether it's "the ideology he concealed in plain sight or from the campaign rhetoric…he delivered," said Prashad.

Election results showed India's left considerably weakened. Its alternative is rebuilding "strength outside parliament through popular political struggles," Prashad stressed.

Did ordinary Indians get what they wanted, he asked? Was it "good governance or Hindu nationalism?"

On the one hand, they get what they voted for, good or bad.

On the other, they're stuck with the worst of both worlds they deplore. Hardline pro-business Hindu nationalists are empowered for the next five years.

For hundreds of millions of deeply impoverished Indians, it'll feel like a lifetime.

Stephen Lendman lives in Chicago. He can be reached at [email protected] 

His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III."

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 


http://www.progressiveradionetwork.com/the-progressive-news-hour 

How to Shrink Inequality

Some inequality of income and wealth is inevitable, if not necessary. If an economy is to function well, people need incentives to work hard and innovate.

The pertinent question is not whether income and wealth inequality is good or bad. It is at what point do these inequalities become so great as to pose a serious threat to our economy, our ideal of equal opportunity and our democracy.

We are near or have already reached that tipping point. As French economist Thomas Piketty shows beyond doubt in his “Capital in the Twenty-First Century,” we are heading back to levels of inequality not seen since the Gilded Age of the late 19th century. The dysfunctions of our economy and politics are not self-correcting when it comes to inequality.

But a return to the Gilded Age is not inevitable. It is incumbent on us to dedicate ourselves to reversing this diabolical trend. But in order to reform the system, we need a political movement for shared prosperity.

Herewith a short summary of what has happened, how it threatens the foundations of our society, why it has happened, and what we must do to reverse it.

What has Happened

The data on widening inequality are remarkably and disturbingly clear. The Congressional Budget Office has found that between 1979 and 2007, the onset of the Great Recession, the gap in income—after federal taxes and transfer payments—more than tripled between the top 1 percent of the population and everyone else. The after-tax, after-transfer income of the top 1 percent increased by 275 percent, while it increased less than 40 percent for the middle three quintiles of the population and only 18 percent for the bottom quintile.

The gap has continued to widen in the recovery. According to the Census Bureau, median family and median household incomes have been falling, adjusted for inflation; while according to the data gathered by my colleague Emmanuel Saez, the income of the wealthiest 1 percent has soared by 31 percent. In fact, Saez has calculated that 95 percent of all economic gains since the recovery began have gone to the top 1 percent.

Wealth has become even more concentrated than income. An April 2013 Pew Research Center report found that from 2009 to 2011, “the mean net worth of households in the upper 7 percent of wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”

Why It Threatens Our Society

This trend is now threatening the three foundation stones of our society: our economy, our ideal of equal opportunity and our democracy.

The economy. In the United States, consumer spending accounts for approximately 70 percent of economic activity. If consumers don’t have adequate purchasing power, businesses have no incentive to expand or hire additional workers. Because the rich spend a smaller proportion of their incomes than the middle class and the poor, it stands to reason that as a larger and larger share of the nation’s total income goes to the top, consumer demand is dampened. If the middle class is forced to borrow in order to maintain its standard of living, that dampening may come suddenly—when debt bubbles burst.

Consider that the two peak years of inequality over the past century—when the top 1 percent garnered more than 23 percent of total income—were 1928 and 2007. Each of these periods was preceded by substantial increases in borrowing, which ended notoriously in the Great Crash of 1929 and the near-meltdown of 2008.

The anemic recovery we are now experiencing is directly related to the decline in median household incomes after 2009, coupled with the inability or unwillingness of consumers to take on additional debt and of banks to finance that debt—wisely, given the damage wrought by the bursting debt bubble. We cannot have a growing economy without a growing and buoyant middle class. We cannot have a growing middle class if almost all of the economic gains go to the top 1 percent.

Equal opportunity. Widening inequality also challenges the nation’s core ideal of equal opportunity, because it hampers upward mobility. High inequality correlates with low upward mobility. Studies are not conclusive because the speed of upward mobility is difficult to measure.

But even under the unrealistic assumption that its velocity is no different today than it was thirty years ago—that someone born into a poor or lower-middle-class family today can move upward at the same rate as three decades ago—widening inequality still hampers upward mobility. That’s simply because the ladder is far longer now. The distance between its bottom and top rungs, and between every rung along the way, is far greater. Anyone ascending it at the same speed as before will necessarily make less progress upward.

In addition, when the middle class is in decline and median household incomes are dropping, there are fewer possibilities for upward mobility. A stressed middle class is also less willing to share the ladder of opportunity with those below it. For this reason, the issue of widening inequality cannot be separated from the problems of poverty and diminishing opportunities for those near the bottom. They are one and the same.

Democracy. The connection between widening inequality and the undermining of democracy has long been understood. As former Supreme Court Justice Louis Brandeis is famously alleged to have said in the early years of the last century, an era when robber barons dumped sacks of money on legislators’ desks, “We may have a democracy, or we may have great wealth concentrated in the hands of a few, but we cannot have both.”

As income and wealth flow upward, political power follows. Money flowing to political campaigns, lobbyists, think tanks, “expert” witnesses and media campaigns buys disproportionate influence. With all that money, no legislative bulwark can be high enough or strong enough to protect the democratic process.

The threat to our democracy also comes from the polarization that accompanies high levels of inequality. Partisanship—measured by some political scientists as the distance between median Republican and Democratic roll-call votes on key economic issues—almost directly tracks with the level of inequality. It reached high levels in the first decades of the twentieth century when inequality soared, and has reached similar levels in recent years.

When large numbers of Americans are working harder than ever but getting nowhere, and see most of the economic gains going to a small group at the top, they suspect the game is rigged. Some of these people can be persuaded that the culprit is big government; others, that the blame falls on the wealthy and big corporations. The result is fierce partisanship, fueled by anti-establishment populism on both the right and the left of the political spectrum.

Why It Has Happened

Between the end of World War II and the early 1970s, the median wage grew in tandem with productivity. Both roughly doubled in those years, adjusted for inflation. But after the 1970s, productivity continued to rise at roughly the same pace as before, while wages began to flatten. In part, this was due to the twin forces of globalization and labor-replacing technologies that began to hit the American workforce like strong winds—accelerating into massive storms in the 1980s and ’90s, and hurricanes since then.

Containers, satellite communication technologies, and cargo ships and planes radically reduced the cost of producing goods anywhere around the globe, thereby eliminating many manufacturing jobs or putting downward pressure on other wages. Automation, followed by computers, software, robotics, computer-controlled machine tools and widespread digitization, further eroded jobs and wages. These forces simultaneously undermined organized labor. Unionized companies faced increasing competitive pressures to outsource, automate or move to nonunion states.

These forces didn’t erode all incomes, however. In fact, they added to the value of complex work done by those who were well educated, well connected and fortunate enough to have chosen the right professions. Those lucky few who were perceived to be the most valuable saw their pay skyrocket.

But that’s only part of the story. Instead of responding to these gale-force winds with policies designed to upgrade the skills of Americans, modernize our infrastructure, strengthen our safety net and adapt the workforce—and pay for much of this with higher taxes on the wealthy—we did the reverse. We began disinvesting in education, job training and infrastructure. We began shredding our safety net. We made it harder for many Americans to join unions. (The decline in unionization directly correlates with the decline of the portion of income going to the middle class.) And we reduced taxes on the wealthy.

We also deregulated. Financial deregulation in particular made finance the most lucrative industry in America, as it had been in the 1920s. Here again, the parallels between the 1920s and recent years are striking, reflecting the same pattern of inequality.

Other advanced economies have faced the same gale-force winds but have not suffered the same inequalities as we have because they have helped their workforces adapt to the new economic realities—leaving the United States the most unequal of all advanced nations by far.

What We Must Do

There is no single solution for reversing widening inequality. Thomas Piketty’s monumental book “Capital in the Twenty-First Century” paints a troubling picture of societies dominated by a comparative few, whose cumulative wealth and unearned income overshadow the majority who rely on jobs and earned income. But our future is not set in stone, and Piketty’s description of past and current trends need not determine our path in the future. Here are ten initiatives that could reverse the trends described above:

1) Make work pay. The fastest-growing categories of work are retail, restaurant (including fast food), hospital (especially orderlies and staff), hotel, childcare and eldercare. But these jobs tend to pay very little. A first step toward making work pay is to raise the federal minimum wage to $15 an hour, pegging it to inflation; abolish the tipped minimum wage; and expand the Earned Income Tax Credit. No American who works full time should be in poverty.

2) Unionize low-wage workers. The rise and fall of the American middle class correlates almost exactly with the rise and fall of private-sector unions, because unions gave the middle class the bargaining power it needed to secure a fair share of the gains from economic growth. We need to reinvigorate unions, beginning with low-wage service occupations that are sheltered from global competition and from labor-replacing technologies. Lower-wage Americans deserve more bargaining power.

3) Invest in education. This investment should extend from early childhood through world-class primary and secondary schools, affordable public higher education, good technical education and lifelong learning. Education should not be thought of as a private investment; it is a public good that helps both individuals and the economy. Yet for too many Americans, high-quality education is unaffordable and unattainable. Every American should have an equal opportunity to make the most of herself or himself. High-quality education should be freely available to all, starting at the age of 3 and extending through four years of university or technical education.

4) Invest in infrastructure. Many working Americans—especially those on the lower rungs of the income ladder—are hobbled by an obsolete infrastructure that generates long commutes to work, excessively high home and rental prices, inadequate Internet access, insufficient power and water sources, and unnecessary environmental degradation. Every American should have access to an infrastructure suitable to the richest nation in the world.

5) Pay for these investments with higher taxes on the wealthy. Between the end of World War II and 1981 (when the wealthiest were getting paid a far lower share of total national income), the highest marginal federal income tax rate never fell below 70 percent, and the effective rate (including tax deductions and credits) hovered around 50 percent. But with Ronald Reagan’s tax cut of 1981, followed by George W. Bush’s tax cuts of 2001 and 2003, the taxes on top incomes were slashed, and tax loopholes favoring the wealthy were widened. The implicit promise—sometimes made explicit—was that the benefits from such cuts would trickle down to the broad middle class and even to the poor. As I’ve shown, however, nothing trickled down. At a time in American history when the after-tax incomes of the wealthy continue to soar, while median household incomes are falling, and when we must invest far more in education and infrastructure, it seems appropriate to raise the top marginal tax rate and close tax loopholes that disproportionately favor the wealthy.

6) Make the payroll tax progressive. Payroll taxes account for 40 percent of government revenues, yet they are not nearly as progressive as income taxes. One way to make the payroll tax more progressive would be to exempt the first $15,000 of wages and make up the difference by removing the cap on the portion of income subject to Social Security payroll taxes.

7) Raise the estate tax and eliminate the “stepped-up basis” for determining capital gains at death. As Piketty warns, the United States, like other rich nations, could be moving toward an oligarchy of inherited wealth and away from a meritocracy based on labor income. The most direct way to reduce the dominance of inherited wealth is to raise the estate tax by triggering it at $1 million of wealth per person rather than its current $5.34 million (and thereafter peg those levels to inflation). We should also eliminate the “stepped-up basis” rule that lets heirs avoid capital gains taxes on the appreciation of assets that occurred before the death of their benefactors.

8) Constrain Wall Street. The financial sector has added to the burdens of the middle class and the poor through excesses that were the proximate cause of an economic crisis in 2008, similar to the crisis of 1929. Even though capital requirements have been tightened and oversight strengthened, the biggest banks are still too big to fail, jail or curtail—and therefore capable of generating another crisis. The Glass-Steagall Act, which separated commercial- and investment-banking functions, should be resurrected in full, and the size of the nation’s biggest banks should be capped.

9) Give all Americans a share in future economic gains. The richest 10 percent of Americans own roughly 80 percent of the value of the nation’s capital stock; the richest 1 percent own about 35 percent. As the returns to capital continue to outpace the returns to labor, this allocation of ownership further aggravates inequality. Ownership should be broadened through a plan that would give every newborn American an “opportunity share” worth, say, $5,000 in a diversified index of stocks and bonds—which, compounded over time, would be worth considerably more. The share could be cashed in gradually starting at the age of 18.

10) Get big money out of politics. Last, but certainly not least, we must limit the political influence of the great accumulations of wealth that are threatening our democracy and drowning out the voices of average Americans. The Supreme Court’s 2010 Citizens United decision must be reversed—either by the Court itself, or by constitutional amendment. In the meantime, we must move toward the public financing of elections—for example, with the federal government giving presidential candidates, as well as House and Senate candidates in general elections, $2 for every $1 raised from small donors.

Building a Movement

It’s doubtful that these and other measures designed to reverse widening inequality will be enacted anytime soon. Having served in Washington, I know how difficult it is to get anything done unless the broad public understands what’s at stake and actively pushes for reform.

That’s why we need a movement for shared prosperity—a movement on a scale similar to the Progressive movement at the turn of the last century, which fueled the first progressive income tax and antitrust laws; the suffrage movement, which won women the vote; the labor movement, which helped animate the New Deal and fueled the great prosperity of the first three decades after World War II; the civil rights movement, which achieved the landmark Civil Rights and Voting Rights acts; and the environmental movement, which spawned the National Environmental Policy Act and other critical legislation.

Time and again, when the situation demands it, America has saved capitalism from its own excesses. We put ideology aside and do what’s necessary. No other nation is as fundamentally pragmatic. We will reverse the trend toward widening inequality eventually. We have no choice. But we must organize and mobilize in order that it be done.

[This essay appears in the current edition of “The Nation.”]

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Big Lies Drown Out Truth

Big Lies Drown Out Truth

by Stephen Lendman

Beating up on Russia persists irresponsibly daily. Big Lies repeat ad nsuseam. Truth is systematically suppressed.

Fake satellite photos are the latest. Images of Russian troops allegedly massed on Ukraine's border date from August 2013. More on this below.

On April 10, The New York Times hyped the Big Lie. It headlined "Satellites Show Russia Mobilizing Near Ukraine, NATO Says."

Times correspondents, contributors and editors avoid due diligence. Regurgitating official Big Lies substitutes. The pattern repeats daily. Truth is systematically buried.

"NATO released satellite photographs on Thursday showing Russian military equipment, including fighter jets and tanks, that it described as part of a deployment of as many as 40,000 troops near the border with Ukraine," said The Times.

Images "offered some of the first documentary evidence of a military buildup that the West says Russia could use to invade Ukraine at any moment."

Brig. General Gary Deakin heads NATO's Comprehensive Crisis and Operations Management Center. He lied claiming photos show a menacing force.

"The Russians have an array of capabilities, including aircraft, helicopters, special forces, tanks, artillery, infantry fighting vehicles," he said. "These could move in a matter of hours."

He lied claiming images were taken between March 22 and April 2. One showed 20 helicopters near Belgorod. It's 25 miles from Ukraine's border. Other images were further away.

Russia categorically denied NATO accusations. Deploying alliance forces near Russia's borders violates international agreements. 

They include the 1997 Founding Act. It's based on "mutual relations, cooperation, and security between NATO and the Russian Federation signed in Paris, France."

In response to NATO's accusation, a Russian General Staff statement said:

"Satellite imagery of Russian troops allegedly amassed at present on the border with Ukraine dates back to August 2013…"

"In reality, the images released by NATO show units of Russia's Southern Military District taking part in various exercises last summer, including near the borders with Ukraine."

They're routine. They're not threatening. Nor are more recent ones. Claims otherwise are lies. They persist maliciously against Russia.

On April 7, Times editors headlined "A Familiar Script in Ukraine," saying:

Events in Eastern Ukraine follow "the script laid down in Crimea to the letter. (Putin) may not have the same designs (there as) on Crimea, but it is no longer possible to preclude any such moves."

Washington and EU partners "said time and again that 'further' Russian aggression would prompt a stern and painful response. Now is the time to prepare for it."

Times editors barely stopped short of urging war. They lied accusing Putin and "his jingoistic supporters" of massing "tens of thousands of well-equipped troops…within striking distance of Ukraine…"

They turned truth on its head claiming Crimean reunification "was a blatant transgression of international law."

"The next Western response must be ready and credible," they urged. It must challenge Russia more than already, they added. 

Times editors march in lockstep with US imperial lawlessness. Lies substitute for truth. Don't expect them to explain.

NATO secretary general Anders Fogh Rasmussen is a convenient US stooge. He regurgitates official US policy. He's militantly anti-Russian.

He sent Moscow a message. He lied saying "(y)ou have a choice. (S)top blaming others for your own actions."

"(S)top massing your troops. (S)top escalating this crisis and start engaging in a genuine dialogue."

"Pull back your troops…For the first time (since) the Cold War ended, we see one state trying to grab a part of another's territory at gunpoint."

"We have seen the satellite images, day after day. Russia is stirring up ethnic tensions in eastern Ukraine and provoking unrest. And Russia is using its military might to dictate that Ukraine should become a federal, neutral state."

Fact check

Russia supports peace and stability. It respects nation-state sovereign independence. It affirms rule of law principles. Its actions back up its words.

Russian troops aren't massed on Ukraine's borders. Claims about imminent invasion are false.

US-led NATO aggression was conveniently forgotten. Raping Yugoslavia was ignored. So was ravaging and destroying Afghanistan, Iraq and Libya. 

NATO EU nations and Turkey partner in Obama's war on Syria. What's next remains to be seen.

NATO is an aggressor. It's a killing machine. It threatens world peace. Don't expect Rasmussen to explain.

US-led NATO forces are deployed in Eastern Europe. Perhaps more are coming. On April 10, Stars and Stripes (S&S) headlined "NATO to focus on reassuring allies worried about Ukraine," saying:

"NATO's next move in response to the crisis in Ukraine is likely to be more of the same: more NATO fighters patrolling over the Baltics, more rotations of warships into the Black Sea and more surveillance of Russian movements around Ukraine."

NATO aims to boost its presence Eastern European countries close to Russia. According to its commander/US European Command head General Philip Breedlove:

"Essentially, what we are looking at is a package of land, air and maritime measures that would build assurance for our easternmost allies."

"I'm tasked to deliver this by next week. I fully intend to deliver it early."

Texas-based 1st Cavalry Division forces are part of NATO's Reaction Force. They're ready to be deployed to Eastern Europe.

Other alliance options include "deployment of aircraft to guard NATO airspace that borders Russia as well as planes capable of striking against ground forces," said S&S.

"A more prominent naval presence in the Baltic and Black seas could also be an option for the alliance."

S&S cited former NATO commander Admiral James Stavridis. Likely alliance actions include deploying aircraft, ships and troops in Eastern Europe. Especially in the Baltics and Poland, he said.

Expect more support for Ukraine's military. It'll take various forms. Included will be weapons and munitions transfers, training, intelligence sharing and more.

Washington may enhance its Eastern European force level in response to regional conditions, said Stavridis.

"I would guess the entire drawdown is being re-evaluated, and we may end up with three or even four combat brigades back in Europe, as well as restoration of the combat aircraft cuts of recent years," he added.

US European Command and US authorities are likely "to look seriously at the US ground and air footprint. Assuming decisions by the end of the year, effects would begin to be felt in 2015."

"(W)e certainly look to be heading into a very frosty (posture) in the years ahead."

On April 9, NATO headlined "Transformation Seminar Charts Path to Summit," saying:

On April 8 and 9, "(m)ore than 250 NATO and military and civilian leaders met in Paris…"

Topics addressed included "How to Adapt NATO to Face Multiple and Complex Challenges."

"(T)he current crisis in Ukraine also drove much of the discussion."

"Ukraine highlighted the need for a strong commitment as well as solidarity in what we should do to face this crisis." 

"It highlighted as well the need for us to deliver on the major initiatives we have enhanced."

Former Yugoslavia Foreign Minister Zivadin Jovanovic said Europe suffers from the effects of US-led NATO aggression on his country.

A precedent was set. "US/NATO aggressive wars in Afghanistan, Libya, Iraq, Mali and other locations" followed.

Millions of victims suffer from "endless war and aggression." 

"These crimes against humanity have not been only military in nature but also clandestine, such as what we are seeing in Ukraine, Syria and Venezuela today." 

"The West has had only objective: the domination of the world by the US/NATO and its surrogates."

He called 1999 NATO/US led aggression against Yugoslavia "a turning point toward globalization of interventionism, toward militarization of European and international relations." 

Toward "global domination of the West," he added. He thinks "the Ukrainian case and the Crimean referendum to reunite with Russia is another kind of turning point."

He believes "multi-polar world relations" will follow. Western global dominance efforts will be resisted, he said.

Ongoing events are the "the beginning (of) relieving Europe and the world of the threats of domination from one side only."

His vision is well-meaning. Shorter-term, major threats exist. Escalating East/West tensions risk conflict. Major ones start this way.

Today is the most perilous time in world history. Washington bears full responsibility. Out-of-control hegemonic ambitions risk global war. Preventing it matters most.

A Final Comment

Growing thousands of Eastern Ukrainians reject Kiev putschists. They want local autonomy. They want their democratic rights respected.

Previous articles discussed their activism. They occupied government buildings. They did so nonviolently. 

Kiev threatened brute force. Protesters braced for it any time. For now apparently it's not coming. More on this below. 

Donetsk activists include civil volunteers, police and army defectors. They're ready to "defend their motherland from the fascist army that’s going to kill them," they say.

They demand "a referendum to be independent from Kiev." They favor "being with Russia."

They abhor violence. They'll respond accordingly if targeted. An unnamed protester said:

"I only have a stick to defend myself. They are coming with machine guns, and all I (have is) a chair leg."

Another activist said:

"The protest in Donetsk is against nationalism. We are for social justice. The creation of our republic means drastic changes in the way our territory is organized." 

"We are for equality of languages. We are against the oppression by the majority by the nationalist minority, and against threatening ethnic Russians."

Lugansk protesters refused unconditional surrender demands. It masqueraded as an amnesty offer.

One protester spoke for others saying: "We demand concretely a referendum on federalization so that the will of the people is heard."

Apparently they'll get it.  Illegitimate putschist prime minister Arseny Yatsenyuk promised legislation permitting regional referenda. 

It's a key protester demand. They want their rights respected. They want local autonomy. They want democracy. They reject fascist rule.

Yatsenyuk spoke as a 48-hour deadline given protesters to evacuate public buildings expired. He'll support greater autonomy, he said.

He'll abolish Kiev-appointed regional governors. His U-turn perhaps is significant. It came after Ukraine's elite Alpha unit reportedly refused to roust protesters from government buildings.

In Donetsk, one of its commanders said his mandate is rescuing hostages. It's fighting terrorism. He'll only act lawfully, he explained. He won't attack nonviolent protesters.

His comments came days after Kharkov police arrested dozens of activists. Local police lieutenant-colonel Andrey Chuikov said Kiev deceived him and others.

They were lied to. They were told to go after dangerous armed bandits. They were peaceful protesters. They posed no threat. They showed no resistance when confronted.

Chuikov said he'll no longer take "criminal" orders. He resigned in protest. He wants no part of lawless governance.

Eastern Ukrainian putschist rejection deepens. It may be just a matter of time until it spreads nationwide. Western Ukrainians haven't yet felt the full impact of what's coming.
  
It combines fascist governance with IMF-imposed neoliberal harshness. Hammering impoverished Ukrainians harder risks mass rebellion. 

It remains to be seen what follows. Obama's imperial trophy may slip from his grasp. It can't happen a moment too soon.

John Kerry lied. He accused Moscow of stirring Eastern Ukraine unrest. He claimed Russian agents, special forces and provocateurs are involved.

This "could potentially be a contrived pretext for military intervention just as we saw in Crimea," he said.

Nothing whatsoever took place. Kerry is a serial liar. He consistently twists facts his way. He's been caught red-handed lying many times.

IlIegitimate putschist interior minister Arsen Avakov outrageously pointed fingers the wrong say, saying:

"All this was inspired and financed by the Putin-Yanukovych group."

British Foreign Secretary William Hague said Eastern European protests bear "all the hallmarks of a Russian strategy to destabilize Ukraine."

Putin and Foreign Minster Sergei Lavrov go all-out to resolve things responsibly. Washington bears full responsibility for crisis conditions. EU partners share it.

On April 10, neocon Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland testified before Senate Foreign Relations Committee members.

She conveniently twisted truths. She did so to fit administration policy. She lied claiming Russia "occup(ied) Crimea."

She called its legal referendum "illegitimate." She outrageously claimed it was "conducted at the barrel of a gun."

It was open, free and fair. It was a model democratic exercise. It mocked America's sham process. It has no legitimacy whatever. Especially in federal elections.

Nuland ludicrously claimed "Russia('s) occupation shocked the conscience." She lied about "intimidat(ing)" Russian forces on Ukraine's borders.

She called peaceful Eastern Ukraine protests "violent." She called Ukraine's illegitimate fascist government "a frontline state in the struggle for freedom…"

She wants Russian "aggression" punished. She claimed upcoming sham May elections will be "free (and) fair."

She called Russian truth and full disclosure "propaganda, lies and efforts to destabilize Ukraine's regions."

She accused Russia of "pressur(ing) Moldova, Georgia, Armenia, Azerbaijan and other neighbors of Ukraine."

She called them "victims" of Moscow policy. She ludicrously claimed Washington supports peace, security and prosperity.

She urged greater NATO diligence in Eastern Europe. She wants military budgets increased, not reduced.

She blamed Russia for US crimes. Earlier she was caught red-handed urging regime change on video.

Her conversation with US Ukraine ambassador Geoffrey Pyatt was recorded. It circulated on You Tube. It's more evidence of America's dark side.

Nuland fronts for imperial lawlessness. So do likeminded extremists infesting Washington. 

It bears repeating. Challenging Russia irresponsibly risks confrontation. It risks possible global war. Humanity's fate hangs in the balance.

Stephen Lendman lives in Chicago. He can be reached at [email protected] 

His new book is titled "Banker Occupation: Waging Financial War on Humanity."

http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 


http://www.progressiveradionetwork.com/the-progressive-news-hour

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Capitulating to Monsanto and the Wall Street Jackals: What Future India?

Countercurrents and Global Research 24/3/2014

Indian Oil and Environment Minister Veerappa Moily has added fuel to the debate about genetically modified organisms (GMOs) by approving field trials of 200 GM food crops on behalf of companies like Monsanto, Mahyco, Bayer and BASF. This is despite Supreme Court appointed Technical Expert Committee (TEC) recommending a ten-year moratorium on GM organism approvals until scientifically robust protocols, independent and competent institutions to assess risks and a strong regulatory system are developed.
This will involve a deliberate release of GM organisms in the open environment and a potential contamination of non-GM crops, as has been the case in the US, with GM open field trials having contaminated parts of the wheat supply (1). Despite mounting evidence appearing in peer-reviewed journals that GM and glyphosate are adversely impacting human health, the nutritional value of food crops, plant immunity, soil fertility, biodiversity, the environment and yields (2 - 15), politicians seem hell-bent on facilitating the aims of the GM biotech sector.

It was a similar story with the ‘Green Revolution’. The Rockefeller and Ford Foundations backed this chemical-laden revolution in agriculture and managed to co-opt strategically placed scientists, institutions and politicians in various areas of the globe (16). With their compliance, the result has been that over the past 50 to 60 years, thanks to chemical fertilizers and pesticides, agriculture has changed more than it did during the previous 12,000 years.

We need look no further than Punjab to see the impact of the Green Revolution. Reports of water scarcities and contamination, increasing levels of cancer, farmer indebtedness and decreasing yields highlight the unsustainable and deleterious impacts of chemical-industrial agriculture (17). It all begs the question, what was wrong with agriculture in the first place that warranted this disastrous shift towards chemical agriculture and now GMOs? The answer to that is, by comparison, probably not a lot.  

In 2013, researchers at the University of Canterbury in New Zealand concluded that the GM strategy used in North American staple crop production is limiting yields and increasing pesticide use compared to non-GM farming in Western Europe (18). Led by Professor Jack Heinemann, the study’s findings were published in the International Journal of Agricultural Sustainability. The study found that Europe is decreasing chemical herbicide use and achieving even larger declines in insecticide use without sacrificing yield gains, while chemical herbicide use in the US has increased with GM seed. In effect, Europe has learned to grow more food per hectare and use fewer chemicals in the process.


Moreover, a September 2013 report by the United Nations Conference on Trade and Development (UNCTAD) states that farming in rich and poor nations alike should shift from monoculture towards greater varieties of crops, reduce the use of fertilisers and other inputs, provide greater support for small-scale farmers and move towards more locally focused production and consumption of food. More than 60 international experts contributed to the report (19).


The report states that monoculture and industrial farming methods are not providing sufficient affordable food where it is needed, while causing mounting and unsustainable environmental damage. The system actually causes food poverty, not addresses it.


As for India, Arun Shrivastava notes that the world doesn’t need modern technology of poisonous pesticides, destructive fertilizers and patented GE seeds that can’t match 1890 or even 1760 AD yields in India (12). But even if we discard the debate over yields, Shrivastava (and others) asserts that modern technology has actually destroyed the nutrition in common foods and that, failing to set any yield or nutrition standard in any food crop, it is part of an insane industry that has muddled through.

So, how did we arrive at this stage, whereby 12,000 years of conventional farming were swept aside in favour of chemical/oil-based agriculture? 

As William F Engdahl argues, the Green Revolution was a Rockefeller family plan to monopolize global agriculture as it had done with oil. It was aimed at removing traditional agriculture from farmers and placing it in the hands of corporate agribusiness. As a result, large multinational seed companies were able to control seed supplies. Moreover, the introduction of modern USagricultural technology, chemical fertilizers and commercial seeds made local farmers in developing countries dependent on USagribusiness.

Developing nations could not pay for the huge amounts of chemical fertilizers and pesticides. This new form of agriculture was also water intensive and required large irrigation projects. Nations would therefore get credit courtesy of the World Bank and special loans made large US banks to construct huge dams and flood previously fertile farmland. The loans went mostly to the large landowners. For the smaller peasants the situation worked differently. Small peasant farmers could not afford the chemical and other modern inputs and had to borrow money at higher rates of interest from elsewhere.

Engdahl notes that super-wheat produced greater yields only by saturating the soil with huge amounts of fertilizer per acre, the fertilizer being the product of nitrates and petroleum, commodities controlled by the Rockefeller-dominated major oil companies.

After two generations of the green revolution, is it any surprise that agriculture in Indiais in the grip of a combined social, financial and environmental crisis (20)?

Ordinary people, if they are not to be what Vandana Shiva calls ‘ignorant links' in a malicious corporate-controlled food chain, therefore need to question why governments have kowtowed to a US-driven agenda of chemical and now GMO agriculture. Africais now targeted for more of the same as the Gates Foundation spearheads the GMO onslaught in that continent (21).

12,000 years of traditional agriculture and biodiversity are being swept aside along with ordinary farmers by vested interests in the US whose geopolitical aim has to been to monopolize markets and ultimately use food as a weapon to control nations and people by destroying national food sovereignty and potentially using food as a means to depopulate (22,23).

“If you control the oil you control the country; if you control food, you control the population.” - Former US Secretary of State Henry Kissinger (12)

This is in addition to the fact that wider ‘corporate America’ is already setting the broad political, ‘development’ and economic agenda in India:

“And something Americans don’t know much about, the nuclear deal with India has a twin agreement, and that twin agreement is on agriculture. It’s called the Knowledge Initiative on Agriculture, and on the board of this agreement are Monsanto, ADM and Wal-Mart. So a grab of the seed sector by Monsanto, of the trade sector by the giant agribusiness, and the retail sector, which is 400 million people in India, by Wal-Mart. These are issues that are preoccupying us for about democracy in India right now.” Vandana Shiva (24).

It’s not just ‘Americans’ that don’t know about this, but most ordinary Indians too!

But even with the upcoming national elections, no one should expect self-proclaimed Hindu-nationalist party BJP to protect the country from the foreign jackals if it gains power. BJP candidate for PM Narendra Modi is fully backed by Wall Street (25).

What future Indian agriculture?
What future India?
600 million booted off the land and the further hollowing out of Indian society at the behest of Wall Street (26)?   


Notes


























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The Great U-Turn

Do you recall a time in America when the income of a single school teacher or baker or salesman or mechanic was enough to buy a home, have two cars, and raise a family? 

I remember. My father (who just celebrated his 100th birthday) earned enough for the rest of us to live comfortably. We weren’t rich but never felt poor, and our standard of living rose steadily through the 1950s and 1960s. 

That used to be the norm. For three decades after World War II, America created the largest middle class the world had ever seen. During those years the earnings of the typical American worker doubled, just as the size of the American economy doubled. (Over the last thirty years, by contrast, the size of the economy doubled again but the earnings of the typical American went nowhere.)  

In that earlier period, more than a third of all workers belonged to a trade union — giving average workers the bargaining power necessary to get a large and growing share of the large and growing economic pie. (Now, fewer than 7 percent of private-sector workers are unionized.) 

Then, CEO pay then averaged about 20 times the pay of their typical worker (now it’s over 200 times). 

In those years, the richest 1 percent took home 9 to 10 percent of total income (today the top 1 percent gets more than 20 percent). 

Then, the tax rate on highest-income Americans never fell below 70 percent; under Dwight Eisenhower, a Republican, it was 91 percent. (Today the top tax rate is 39.6 percent.)

In those decades, tax revenues from the wealthy and the growing middle class were used to build the largest infrastructure project in our history, the Interstate Highway system. And to build the world’s largest and best system of free public education, and dramatically expand public higher education. (Since then, our infrastructure has been collapsing from deferred maintenance, our public schools have deteriorated, and higher education has become unaffordable to many.)

We didn’t stop there. We enacted the Civil Rights Act and Voting Rights Act to extend prosperity and participation to African-Americans; Medicare and Medicaid to provide health care to the poor and reduce poverty among America’s seniors; and the Environmental Protection Act to help save our planet. 

And we made sure banking was boring. 

It was a virtuous cycle. As the economy grew, we prospered together. And that broad-based prosperity enabled us to invest in our future, creating more and better jobs and a higher standard of living.  

Then came the great U-turn, and for the last thirty years we’ve been heading in the opposite direction. 

Why?

Some blame globalization and the loss of America’s  manufacturing core. Others point to new technologies that replaced routine jobs with automated machinery, software, and robotics. 

But if these were the culprits, they only raise a deeper question: Why didn’t we share the gains from globalization and technological advances more broadly? Why didn’t we invest them in superb schools, higher skills, a world-class infrastructure?

Others blame Ronald Reagan’s worship of the so-called “free market,” supply-side economics, and deregulation. But if these were responsible, why did we cling to these ideas for so long? Why are so many people still clinging to them? 

Some others believe Americans became greedier and more selfish. But if that’s the explanation, why did our national character change so dramatically? 

Perhaps the real problem is we forgot what we once achieved together. 

The collective erasure of the memory of that prior system of broad-based prosperity is due partly to the failure of my generation to retain and pass on the values on which that system was based. It can also be understood as the greatest propaganda victory radical conservatism ever won.

We must restore our recollection. In seeking to repair what is broken, we don’t have to emulate another nation. We have only to emulate what we once had.

That we once achieved broad-based prosperity means we can achieve it again — not exactly the same way, of course, but in a new way fit for the twenty-first century and for future generations of Americans. 

America’s great U-turn can be reversed. It is worth the fight.

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The Market Oracle, Global Research and Countercurrents 8/1/2014

British Chancellor George Osborne this week announced massive cuts of £25 billion after 2015. This included further welfare cuts of £12bn. Osbourne said that 2014 would be a year of hard truths. He claimed that his economic policies were working, but admitted that the bad news is there's still a long way to go.

He warned of more years of cuts to public services and the public sector by saying £25bn would be cut over two years after 2015. That is in addition to £17bn cuts this year and £20bn next year. Osbourne argued that government is going to have to be permanently smaller and so too is the welfare system.


When he says ‘welfare system’ does he also include cutting back the massive handouts given to the arms industry, for example, which amounts to £890 million per year according to the Campaign Against the Arms Trade (1), or the billions given to the private sector via the ‘corporate dole office’, the Department of Trade and Industry (now called the Department for Business Innovation and Skills)? Or does he exclude such types of corporate welfare dependency (2)?


What is interesting about this attack on the public sector by millionaire Osbourne and the rest of the millionaires in the British Cabinet is that the mantra that such cuts are necessary has been repeated endlessly over the past few years to the point that many of the public believe it’s true. But it’s not. Cuts are not necessary. It is ideology wrapped up in neo-liberal economic dogma that masquerades as ‘truth’. But it’s a big lie. It’s secular theology that the mainstream media never challenges and simply perpetuates.


Britain’s problems are not the result of spending on public services. In 1945, the debt was bigger than today, but Britain created the welfare state. In the 1960s, during an era of full employment, the debt was also bigger than now. In 2006, before the crisis, Britain spent more on public services than now, but there was no talk of cutting back the public sector.


The roots of the crisis (across Western economies) lie not in public sector spending but in a process that has seen the shifting balance of political and economic power towards elite interests. In the 1980s, much of Britain’s manufacturing industry was outsourced or run down, the union movement was attacked and almost decimated and wages have been depressed or have fallen in real terms over a number of years. To compensate for the hollowing out of the economy and driving down wages, low pay and increasing underemployment, credit became the short-term remedy for stimulating demand.


While profits during the last decade were higher than in the previous three decades, unemployment and underemployment have become a fact of life for millions (3). This is the outcome of the type of 'globalization' we have been witnessing and the lies that underpin it (4). It is the consequence of what David Rothkopf in this book 'The Global Power Elite and The World They are Making' says is the global elite's plundering of nations. 


The economic crisis is not due to lavish spending on public services, but the shattering of the post-war Keynesian consensus, based on notions of fairness, and consequent low demand and over investment, neo-liberal (low taxation - or no taxation for the corporate tax cheats) economic policies, a debt bubble economy and the massive welfare handout (bail out) to the banking sector. It is also a result of the manipulations within the unregulated financial sector (which was supposed to be the bedrock of the ‘new’ economy after the manufacturing base was deliberately destroyed), speculation, the criminal use of hedge funds and credit derivatives and all manner of secretive dodgy dealings that burst the bubbles they were intended to sustain. Ordinary folk are now being saddled with the consequences of a system they had no hand in shaping.


But mention the word ‘crisis’ and propaganda about the public sector being the root of all evil is sold to the masses by most politicians and the media.


Osbourne would never mention that the top 1,000 of Britain’s wealthiest people had an aggregate wealth of £333 bn in 2009. The national debt was half that. In 2009, they increased their wealth by a third (5). It doesn’t take a genius to see how the debt could be addressed. But Osbourne says: "There is no point in pretending that there is some magic wand that the Chancellor can wave to make the whole country feel richer than it actually is." 


And so the plunder of public resources continues. 


The priority of Osbourne and his millionaire cronies inside and outside the British Government is not the lives of ordinary people, but to maintain massive profit and to drive down wages and ‘costs’ and keep workers confused and weak.


Quoted in Britain’s Morning Star newspaper, Communist Party general secretary Rob Griffiths urges taxes on the rich and big business, plus public ownership of energy and public transport. The Unite union general secretary Len McCluskey accuses Mr Osborne of "continuing an unprecedented ideological attack on the state, with Britain's young people in the front line."


General union GMB general secretary Paul Kenny is also reported as demanding that big corporations must be made to pay their fair share of tax, bringing in billions of extra income. That would amount to a whopping £260 million a day according to economist and taxation specialist Richard Murphy (6).


What is happening in Britain is a continuation of what Thatcher did in the 1980s, with attacks on ordinary working people in order to allow an ever increasing concentration of power and wealth at the top. To help achieve it, we are witnessing the dismantling of the welfare state.


Mick McGahey, Vice President of the National Union of Mineworkers 1972-87:


"We understood the Conservative government's determination to use the state machine against us. In order to dismember the welfare state, they had to break the trade union movement and they needed to break the miners first."
McGahey was correct. The current Conservative-LibDem coalition is going further than Thatcher ever did. Osbourne and his cronies in government are mouthpieces for their powerful backers in the City ofLondon. As Labour MP Dennis Skinner observes:

"Osborne is busy lining the pockets of the people at the top of the pile."

Notes



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When significant US economic markets went haywire in the summer and fall of 2008, a fear, even panic, struck those charged with developing and implementing economic policy. The prevailing thinking-- unbridled capitalism with near-religious confidence in market mechanisms-- appeared to be in irreversible retreat.
The housing market cooled, home values shrank, and the financial structure built around home ownership began to collapse. As the stock market fell freely from previous highs, led by the implosion of bank stocks, investors withdrew dramatically from the market. Credit froze and consumption slowed. Thus began a downward spiral of employee layoffs, reduced consumption, capital hoarding, and retarded growth, followed by more layoffs, etc. etc.
As fear set in, policy makers scrambled to find an answer to a crisis that threatened to deepen and spread to the far reaches of the global economy. With interest rates near zero, they recognized that the monetarist toolbox, in use since the Carter administration, offered no answer.
At the end of the Bush administration, bi-partisan leaders approved the injection of hundreds of billions of public dollars into the financial system with the hope of stabilizing the collapsing market value of banks, a move popularly dubbed a “bailout.”
Early in the Obama administration, Democratic Party administrators crafted another recovery program totaling about three-quarters of a trillion dollars, a program involving a mix of tax cuts, public-private infrastructure projects, and expanded direct relief. Economists generally viewed this effort as a “stimulus” program designed to trigger a burst of economic activity to jump-start a stalled economic engine. Dollar estimates of aggregate US Federal bailouts and stimuli meant to overcome the crisis rose as high as the value of one year's Gross Domestic Product in the early years after the initial free fall. The Federal Reserve continues to offer a $75 billion transfusion every month into the veins of the yet ailing US economy.
Bad Faith
The last three decades of the twentieth century brought forth a new economic consensus of not merely market primacy, but total market governance of economic life. Regulation of markets was believed to destabilize markets and not correct them. Public ownership and public services were seen as inefficient and untenable holdouts from market forces. Public and private life beyond the economic universe were subjected to markets, measured by market mechanisms, and analyzed through the lens of market-thought. Indeed, market-speak became the lingua franca unifying all of the social sciences and humanities in this era. With the fall of the Soviet Union, capital and its profit-driven processes penetrated every corner of the world. Only independent, anti-imperialist, market-wary movements like those led by Hugo Chavez, Evo Morales, and a few others gained some political success against the unprecedented global dominance of private ownership and market mechanisms.
While capitalism in its most unadorned, aggressive form enjoyed the moments of triumph, forces were at play undermining that celebration. Those forces crashed the party in 2000 in the form of a serious economic downturn, the so-called “Dot-com Recession” featuring a $5 trillion stock market value loss and the disappearance of millions of jobs. Economists marveled at how slowly the jobs were returning before the US and global economy were hit with another, more powerful blow in 2008. Clearly, the first decade of the twenty-first century will be remembered as one of economic crisis and uncertainty, a turmoil that continues to this day.
Apart from the human toll-- millions of lost jobs, poverty, homelessness, lost opportunities, destruction of personal wealth-- the crisis-ridden twenty-first century challenged the prevailing orthodoxy of unfettered markets and private ownership. Even such solid and fervent advocates of that orthodoxy as the Wall Street Journal, The Economist, and The Times were rocked by the crisis, questioning the soundness of classical economic principles. No principle is more dear and essential for the free marketeers than the idea that markets are self-correcting. While there may be short-term economic imbalances or downturns, free-market advocates believe that market movement always tends towards balance and expansion in the long run. Thus, a persistent, long term stagnation or decline is thought to be virtually impossible (with the caveat that there are no restrictions imposed on the market mechanism).
So when perhaps the greatest era of extensive global open-market economy experienced the most catastrophic economic collapse since the Great Depression, serious doubts arose about the fundamental tenets of market ideology. And during the darkest days of 2008 and 2009, a veritable ideological panic swept over pundits and experts of the Right and the “respectable” Left. Some rehabilitated an out-of-fashion economist and spoke of a “Minsky moment.” Liberals proclaimed the death of neo-liberalism (the popular term for the return to respectability of classical economics that began in the late 1970s). And still others foresaw a restoration of the interventionist economics represented by John Maynard Keynes, the economic theories that guided the capitalist economy through most of the post-war period. Even the most conservative economists conceded that market oversight, if not regulation, was both necessary and forthcoming.
Yet, change has not come forth. Despite over five years of decline and stagnation, despite a continued failure of markets to self-correct, free-market ideology continues to dominate both thinking and policy, clearly more faith-based than reality-based. In part, the resilience of open-market philosophy emanates from the shrewd manufacture of debt-fear by politicians and debt-mongering by financial institutions. By raising the shrill cry of exploding debt and impending doom, attention was diverted from the failings of the unfettered market and towards government austerity and massive debt reduction.
Diagnosis?
Clearly all the Nobel Prize-winning mathematical economic models thought to capture economic activity failed to predict and explain the 2008 crash. No amount of faith could disguise the monumental failure of raw, unregulated markets and the policies that promoted them. Two competing, sharply contrasting, and simplistic explanations came forward.
Defenders of free markets shamelessly, brazenly argue that government meddling thwarted the full and free operation of market mechanisms, thus, exacerbating what would have been a painful, but quickly resolved correction. Following the metaphor alluded to in this article’s title, heartburn was misdiagnosed, treated with radical surgery, only to create a life-threatening condition.
Of course this is self-serving nonsense.
Whatever else we may know about markets, we know this: since the process of deregulating markets began in earnest in the late 1970s, crises have only occurred more frequently, with greater amplitude, and harsher human consequences. Before that, and throughout the earlier post-war period, government intervention and regulation tended to forestall downturns, moderate their nadir, and soften the human toll. And a glimpse at an earlier period of market-friendly policy– the early years of the Great Depression-- demonstrates the folly of simply waiting for the promised correction: matters only grew worse. Then, as now, life proved to be a hard taskmaster; when market mechanisms really go awry, no one can afford to wait for self-correction.
Liberal and soft-Left opponents of an unfettered market offer a different argument. They saw the crisis as, not the absence of free markets, but the failure to oversee and regulate markets adequately. On this view, shared by nearly all liberals and most of the non-Communist Left, markets are fundamental economic mechanisms-- essential, if you will-- but best shepherded by government controls that steer markets back when they threaten to run amok.
Thus, the 2008 crisis would have been averted, they believe, if rules and regulations remained in place that were previously designed and implemented to protect the economy from market excesses; if we had not loosened the rules and regulations, we would never have experienced the disaster of 2008.
This view is bad history and even worse economics.
While liberals would like to believe that regulations and institutions spawned by the New Deal of the 1930s stabilized capitalism and tamed markets, the truth is otherwise. The massive war spending initiated sometime before the US entry into World War II solved the problems of growth and excess manpower associated with the long decade of stagnation, hesitant recovery, retreat, and further stagnation that befell the economy beginning in 1929.
Capitalism gained new momentum with post-war reconstruction. Productive forces were restored where they had been destroyed, refreshed where they were worn, and improved in the face of new challenges. This broad restructuring of capitalism produced new opportunities for both profit and growth. At the same time, the lesson of massive socialized, public, and planned military spending were not lost. New threats were conjured, new fears constructed. The hot war in Korea and the ever-expanding Cold War fueled an unprecedented US expansion. It is not inappropriate to characterize this post-war expansion as a period of “military-Keynesianism.” That is, it was an era of Keynesian policies of planned, extensive government spending married to military orders outside of the market. Insofar as it transferred a significant share of the capitalist economy to a command, extra-market sector, it marked a new stage of state-monopoly capitalism, a stage embracing some of the features of socialism.
But by the mid-1960s this “adjustment” began to lose its vitality. Profit growth, the driving force of capitalist expansion, started a persistent decline (for a graphic depiction of this trend, see the chart on page 103 of Robert Brenner's The Economics of Global Turbulence (New Left Review, May/June 1998).
The falling rate of profit coupled with raging inflation by the middle of the 1970s. The military-Keynesian solutions to capitalist crisis were spent, exhausted, proving inadequate to address a new expression of the instability of capitalism. Perhaps nothing signaled the bankruptcy of the prevailing (Keynesian) orthodoxy more than the desperate WIN campaign-- Whip Inflation Now of the Gerald Ford presidency, an impotent attempt to stem the crisis with mass will-power where intervention failed.
Contrary to the claims of liberals, social democrats and other reform-minded saviors of capitalism, the resultant shift in orthodoxy was notmerely a political coup, a victory of retrograde ideology, but instead it was an unwinding of the failed Keynesian policies of the moment. Thus, the Thatcher/Reagan “revolution” was only the vehicle for a dramatic adjustment of the course of capitalism away from a spent, ineffective paradigm.
With Paul Volker assuming the chairmanship of the Federal Reserve and the beginnings of systematic deregulation, the Carter administration planted the seeds of the retreat from the old prescriptions. Volker, with his growth-choking interest rates, ensured a recession that would sweep away any will to resist belt-tightening. But it took the election of the dogma-driven Ronald Reagan to emulate the UK's Margaret Thatcher and use the occasion to eviscerate wages and benefits in order to pave the way for profit growth.
The cost of restoring life to the moribund capitalist economy was borne by the working class. Foolishly, the stolid, complacent labor leadership had banked on the continuation of the tacit Cold War contract: Labor supports the anti-Communist campaign and the corporations honor labor peace with consistent wage and benefit growth. Instead, profit growth was restored by suppressing the living standards of labor-- cutting “costs.” A vicious anti-labor offensive ensued.
While the loyal opposition insists on portraying the break with Keynesian economics as something new (commonly dubbed “neo-liberalism”), it was, in fact, a surrender to the old. The bankruptcy of bourgeois economics could offer no new, creative answer to capitalist crisis; it could only cast off a failed approach and restore profits by relentlessly squeezing the labor market.
This response could and only did succeed because of the extraordinary weakness of the labor movement. As the profit rate began to rebound, labor lacked the leadership and will to not only secure a share of productivity increases, but to even defend its previous gains.
Thus, capitalism caught a second wind by retreating from the post-war economic consensus and reneging on the implicit labor peace treaty. Profit growth returned and the system sailed on.
But the continuing advance of deregulation and privatization brought with it a return to the unbuffered anarchy of markets. The Savings and Loan crises of the 1980s and 1990s and the stock market crash of October 1987 were all harbingers of things to come and reflections of deeper instability.
With the fall of the Soviet Union and Eastern European socialism, a huge new market was delivered to the global capitalist system, a market that further energized the opportunities for capital accumulation and expanded profits. Millions of educated, newly “free” (free of security, safe working conditions, legal protection, and organization) workers joined reduced-wage and low-wage workers from the rest of the world to form a vast pool of cheap labor. From the point of view of the owners of capital, paradise had truly arrived. Thus, an immense, one-sided class war and the wage-depressing integration of millions of new workers set capitalism on a profit-restoring path to health, putting the now impotent Keynesian orthodoxy in the rear-view mirror. Few would guess that this trip would endure for less than two decades before capitalism would again encounter serious crises.
Significant economic growth in a period of weak labor necessarily produces galloping inequality. With corporate and wealthy-friendly tax policies, many government redistribution mechanisms are starved or dismantled. The flow of wealth accelerates to corporations and the super-rich and away from those who work for a living. The coffers of the investor class swell with money anxious for a meaningful, significant return on investment. As the process of capital accumulation intensifies, fewer and fewer safe, high-yield productive investment opportunities arise to absorb the vast pool of ever-expanding wealth concentrated in the hands of a small minority.
In a mature capitalism, new, riskier avenues-- typically removed from the productive sector-- emerge to offer a home for capital and promise a return. Bankers and other financial “wizards” compete ferociously to construct profit-generating devices that promise more and more. These instruments grow further and further from productive activity. Moreover, their resultant “profits” are ever further removed from real, tangible, material value. Instead, they virtually exist as “hypothetical” capital, or “counter-factual” capital, or “future-directed” capital, or “contingent” capital. Some Marxists rush to label this product of speculation as “fictitious,” but that obscures its ultimate origin in exploitative acts in the commodity-production process. It is this expansion of promissory capital that fuels round after round of speculative investment lubricated with greater and greater debt.
Metaphors abound for the end game of this process: “bubbles,” “house of cards,” etc. But the ultimate cause of crisis is the failure to satisfy the never ending search for return. That is, the cause of crisis resides in the process of accumulation intrinsic to capitalism and the inability to sustain a viable return on an ever enlarging pool of capital and promissory capital. Capitalists measure their success by how their resources are fully and effectively put to use to generate new surpluses. That is the deepest, most telling sense of “rate of profit.” It is the gauge guiding the capitalist-- an effective rate of profit based on accumulated assets. Apart from official and contrived measures of profit rates, the growth of accumulated capital, weighed against the available investment opportunities, drives future investment and determines the course of economic activity.
In 1999, the profitability of the technology sector dropped precipitously as a result of the unrealizable investment of billions of yield-seeking dollars in marginal Dot.com companies and internet services. As an answer to the problem of over-accumulation, investing in the fantasies of 20-year-old whiz kids proved to be as irrational as sane observers thought it to be. The crash followed.
And again in the heady days of 2005, buying bizarre securities packed with the flotsam and jetsam of mortgage shenanigans seemed a way of finding a home for vast sums of “unproductive” capital. After all, capital cannot remain idle; it must find a way to reproduce itself. But what to do with the earnings from reselling the demand-driven securities? More of the same? More risk? More debt? And repeat?
The portion of US corporate profits “earned” by the financial sector grew dramatically from 1990 until the 2008 crash, touching nearly 40% in the mid-2000s and demonstrating the explosion of alternative investment vehicles occupying idle capital. It is crucial to see a link, an evolutionary necessity, between the restoration of profitability, intense capital accumulation, and the tendency for profitability to be challenged by the lack of promising investment opportunities. It is not the whim of bankers or the cleverness of entrepreneurs that drives this process, but the logical imperative of capital to produce and reproduce.
Some Comments and Observations
There are other theories of crisis offered by the left. One theory, embraced by many Communist Parties, maintains that crisis emerges from over-production. Of course, in one sense, over-accumulation is a kind of overproduction, an overproduction of capital that lacks a productive investment destination. But many on the left mean something different. They argue that capitalism produces more commodities in the market place than impoverished, poorly paid workers can purchase. There are two objections to this: one theoretical, one ideological.
First, evidence shows that a slump in consumption or a spike in production does not, in fact, precede economic decline in our era. If overproduction or its cousin, under-consumption, were the causeof the 2008 downturn, data would necessarily show some prior deviation from production/consumption patterns. But there are none. Instead, the reverse was the case: the crisis itself caused a massive gap between production and consumption, exacerbating the crisis. The threat of oversupply lingers in the enormous deflationary pressure churning in the global economy. Despite the fact that consumer spending is such a large component of the US economy, the effects of its secular stagnation or decline has been largely muted by the expansion of consumer credit and the existence, though tenuous, of social welfare programs like unemployment insurance.
Second, if retarded or inadequate consumption were the cause of crises, then redistributive policies or tax policies would offer a simple solution to downturns, both to prevent them and reverse them. Thus, capitalism could go on its merry way with little fear of crisis. Certainly this is the ideological attraction of overproduction explanations of crises: they allow liberals and social democrats to tout their ability to manage capitalism through government policies.
However they cannot manage capitalism because crises are located, not in the arena of circulation (matching production and consumption), but in the profit-generating mechanism of capitalism, its veritable soul.
Because of the centrality of profit, the over-accumulation explanation has an affinity with another theory of crisis: Marx's argument for the tendency of the rate of profit to fall. In fact, it can be viewed as a contemporary version of the argument without nineteenth-century assumptions.
Happily, many commentators today have revisited the theory outlined in Volume III of Capital, finding a relevance ignored throughout most of the twentieth century. Only a handful of admirers of Marx's work kept the theory alive in that era, writers like Henryk Grossman, John Strachey, and Paul Mattick. Unfortunately, today's admirers, like the aforementioned predecessors, share the flaw of uncritically taking Marx's schema to be Holy Grail. For the most part, Marx used very occasional formalism as an expository tool and not as the axioms of a formal system. Those trained in modern economics are prone to leap on these formulae with an undergraduate zeal. They debate the tenability of a model that depicts the global economy as a collection of enterprises devouring constant capital at a greater rate than employment of labor and mechanically depressing the rate of profit. This is to confuse simplified exposition with robust explanation. Much can be learned from Marx's exposition without turning it into a scholastic exercise.
Among our left friends, it has become popular to speak of the crisis and era as one of “financialization.” This is most unhelpful. Indeed, the crisis had much to do with the financial sector; indeed, the financial sector played and is playing a greater role in the global economy, especially in the US and UK; but conjuring a new name does nothing to expose or explain the role of finance. Like “globalization” in an earlier time, the word “financialization” may be gripping, fashionable, and handy, but it otherwise hides the mechanisms at work; it’s a lazy word.
*****
There is a point to this somewhat lengthy, but sketchy journey through the history of post-war capitalism. Hopefully, the journey demonstrates or suggests strongly that past economic events were neither random nor simply politically driven. Instead, they were the product of capitalism's internal logic; they sprang from roadblocks to and adjustments of capitalism's trajectory. As directions proved barren, new directions were taken. While it is not possible to rule out further maneuvers addressing the inherent problem of over-accumulation, the problem will not go away. It will return to haunt any attempt that presumes to conquer it once and for all. And if capitalism carries this gene, then it would be wise to look to a better economic system that promises both greater stability and greater social justice. Of course, finding that alternative begins with revisiting the two-hundred-year-old idea long favored by the working class movement: socialism. Affixed to that project is the task of rebuilding the movement, the political organization needed to achieve socialism.
As things stand in today's world, there are most often only two meager options on the regular menu: one, to save and maintain capitalism with the sacrifices of working people and the other, to save and maintain capitalism with the sacrifices of working people and a token “fair share” sacrifice on the part of corporations and the rich. Neither is very nourishing.
The first option is based on the thin gruel of “trickle down” economics and the nursery-rhyme wisdom of “a rising tide raises all boats.” It is the prescription of both of the major US political parties, Japan's Abe, the European center parties, and UK Labour.
The second option promises to save capitalism as well, but through a bogus fair distribution of hardship across all classes. This is the course offered by most European left parties and even some Communist Parties.
But a system-- capitalism-- that is genetically disposed to extreme wealth distribution and persistent crisis does not make for an appetizing meal. Instead, we need to dispense with programs that promise to better manage capitalism, as Greek Communists (KKE) like to say. That is for others who are at peace with capitalism or underestimate its inevitable failings.
The only answer to the heart failure of capitalism is to change the diet and put socialism on the menu.

Zoltan Zigedy
[email protected]

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How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

How Our Food Has Become a Dangerous Addiction

In a new book, "Industrial Diet"...

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LO Sweden is starting a high-level commission on a “new Swedish model”. Long ago, Sweden was known for what was called the Rehn-Meidner model. The idea was that union wage strategies and government policy should be combined to promote full employment and fair distribution while respecting the autonomy of unions and employers. The basic element was a “solidaristic” wage policy which would raise the income level of low-income groups and simultaneously speed up structural change and thereby create more jobs in the future. Unemployment benefits and active labour market programmes would give workers security in the process of change; a “security of the wings”, as Gösta Rehn, LO economist at the time, phrased it. In this guest post, Ingemar Lindbergdiscusses the huge task of this new commission: How to re-establish a strategy for these goals in our times?

Sweden has a semi-centralised wage setting system, in which negotiations between the social partners in industry are expected to “set the mark” for other sectors. Union affiliation is still around 70 per cent and collective agreement coverage 90 per cent. But full employment is far away; the rate of unemployment remains around 8 per cent. Moreover, wages have not increased in line with productivity; actually Sweden beats Germany (and even China) in export surplus seen over the last ten to fifteen years. This is not very solidaristic with workers in other countries.

In the 1950s and 1960s – the hey-days of the old model – LO Sweden, the blue-collar confederation, could still dominate the scene on the union side. Today, two other confederations – TCO for salaried employees and Saco for professionals –have together more members than LO and negotiate two thirds of the total wage sum. Differences between the three confederations are not easy to bridge. Many TCO and Saco unions have accepted individual wage setting models. And LO’s insistence on its link with the Social-Democratic party is a hindrance for closer collaboration with the other two.

Also, in the hey-days of the old model, the Swedish employers were part of the handshake. The leaders of LO and the Employers´ Confederation SAF toured the US together, presenting the case for a compromise of this kind. The employers actually saw this model as a constructive way of working together with labour and create a good climate at the workplace. Now, however, major fractions on the employer side seem to have lost all national or long-term interests, focusing instead on transnational production networks or short-term financial transactions.

Even more challenging is the persistent high rate of unemployment. The old model was based on global capital controls of the Bretton-Woods era and on Keynesian macro-economic management at national level. There was political agreement across all parties that if unemployment rose towards 3 per cent, active stimuli through fiscal and/or monetary policies were called for. And the tools were available at the national level. The national government ruled over fiscal and monetary policy.

A central issue for the new commission is bound to be how far a national government in a small and open country like Sweden can master its own policies for full employment. No one would deny that national policy space has shrunk. But some, including myself, would argue that the real limits are larger than the perceived ones. Excessively low aggregate demand seems to be the main reason for this “prolonged crisis of democratic capitalism” (Streek). And Sweden is no exception. Could not the share of wages to GDP be raised? Could not the inflation target be elevated and fiscal norms relaxed, now that stagnation is more of a threat than inflation? Could not a huge-scale public investment programme with green ambitions be started, now that idle resources need be put to use?

Photo by Arjan Richter
However, the basic role of unions is not politics, it is negotiating good contracts for workers. My own guess is that priority No.1 for LO will be to maintain and renew its mandate to coordinate central wage negotiations. This will require some kind of common understanding with the unions of salaried employees and professionals. But also politically I would think that LO will gradually shift towards more emphasis on coordinating with TCO, and to some extent even with Saco. In this process LO will have to distance itself substantially from the Social-Democratic party SAP. I think that in the long run they will both benefit from a more detached mutual relationship. The old model was built on the LO/SAP axis. Now LO has no hegemonic position, nor has SAP. But a strong wage earner strategy for full employment and fair distribution would certainly influence also the non-socialist political parties.

There are several other new elements which the commission will most probably have to consider. One is “globalization”, meaning the organization of production and distribution in trans-national networks, and the extreme mobility of financial capital. These two elements of a neo-liberal world order threaten both unions and democracy. More effective tools for transnational union responses need to be developed.  And simultaneously, a reasonable degree of national policy space – for full employment, labour market regulation and welfare programmes – needs to be defended and restored.

At its 2012 Convention, LO Sweden elected a complete set of new leaders. A new generation took over. Establishing a high level commission with a task like this is certainly a brave thing to do. The commission is required to report in 2015 and decisions will be taken at the 2016 LO Convention. It will be interesting to see how far and in what way the commission will tackle these challenges.



Ingemar Lindberg is a former researcher and social policy adviser to the Swedish Confederation of Trade Unions (LO). He has written a number of books and articles on labour and globalisation.

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But as low-wage work proliferates in America, so-called takers are working as hard if not harder than anyone else, and often at more than one job.

Yet they’re still not making it because the twin forces of globalization and technological change have reduced their bargaining power and undermined their economic standing — while bestowing ever greater benefits on a comparative few with the right education and connections (and whose parents are often best able to secure these advantages for them).

Better education and training for those on the losing end is critically important, as will several of the other proposals the President listed. But they will only go so far.

The number of losers is growing so quickly, and so much of the economies’ winnings are going to a small group at the top — since the recovery began, 95 percent of the gains have gone to the richest 1 percent — that some direct redistribution of the gains is necessary.

Without some redistribution, the losers are likely to react in ways that could hurt the economy. They’ll demand protection from global markets they believe are taking away good jobs, and even from certain technological advances that threaten to displace them (rather than smash the machines, as did England’s 19th-century Luddites, they’ll seek regulations that preserve the old jobs).

Without some redistribution, our ever-increasing number of low-wage workers won’t have enough money to keep the economy going. (This is one reason why the current recovery has been so anemic.)

And without some redistribution, America’s growing army of low-wage workers may fall prey to demagogues on the right or left who offer convenient scapegoats for their frustrations.

One way we already redistribute is through the Earned Income Tax Credit, a wage subsidy for the working poor, which, at about $60 billion a year, is the nation’s largest anti-poverty program. It’s like a reverse income tax — larger at the bottom of the wage scale (now around $3,000 for incomes around $20,000) and gradually tapering off as incomes rise (vanishing at around $35,000).

The EITC subsidy should be enlarged and extended further up the wage scale before tapering off.

How to pay for this? By cutting subsidies and special tax breaks for the oil and gas industries, big agribusiness, military contractors, hedge-fund and private-equity partners, and Wall Street banks. And by capping individual tax deductions (deductions are the economic equivalent of government subsidies) for gold-plated health care plans, lavish business junkets and interest on giant mortgages.

In other words, we can finance much of this redistribution to the working poor by ending unnecessary redistributions to the wealthy.

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Even if and when HealthCare.gov works perfectly, relatively few Americans will be affected by it. Only 5 percent of us are in the private health-insurance market to begin with. But almost half of Americans are now shopping for great holiday deals online, and many will be profoundly affected — not because they get great deals, but because their jobs and incomes are at stake.    

Online retailing is the future. Amazon is the main online shopping portal this holiday season but traditional retailers are moving online as fast as they can. Online sales are already up 20 percent over last year, and the pace will only accelerate.Target and many other bricks-and-mortar outlets plan to spend more on technology next year than on building and upgrading new stores.

Americans are getting great deals online, and they like the convenience. But there’s a hidden price. With the growth of online retailing, fewer Americans will have jobs in bricks-and-mortar retail stores.

Amazon announced last summer it would add 5,000 new jobs to the 20,000 it already has. But not even 25,000 Amazon jobs come near to replacing the hundreds of thousands of retail jobs Amazon has already wiped out, and the hundreds of thousands more it will eliminate in the future. 

To put this in some perspective you need to know that retail jobs have been the fastest growing of all job categories since the recession ended in 2009. But given the rapid growth of online retailing, that trend can’t possibly last. What will Americans do when online sales take over?

Add to this the fact that most of what’s being sold this holiday season – online and off-line —  is no longer made by Americans. Vast shipping containers of gadgets, garments, and other goodies are fabricated or assembled or sewed together in Asia for the American market.  

Online retailers are facilitating this move by having these goods shipped directly from Asian factories to distribution centers in America and then to our homes, without ever having to go to an American retail store or even a wholesaler. This means even lower prices and better deals. But it also means fewer jobs and lower pay for many Americans.

Some manufacturing is coming back to America, to be sure, but not the assembly-line jobs that used to be the core of manufacturing employment. Computerized machine tools and robots are doing an increasing portion of the work — which is why many companies can afford to bring their factories back here.

Get it? Technology and globalization are driving the good deals American consumers are getting this holiday season. But the same forces are keeping wages down, and are even on the verge of eliminating many of the low-wage retail and related service jobs many Americans now need to make ends meet.

To put it another way, American consumers getting great shopping deals are also American workers on the losing end of those same deals.

The biggest reason holiday shopping is especially frenzied this season is so many Americans are already stretched to the breaking point that they’re more desperate than ever for bargains. Sixty-five percent of today’s shoppers are living paycheck-to-paycheck. That’s up from 61 percent last year, according to consumer research by Booz and Company.

Median household income in America continues to drop, adjusted for inflation, because low-wage jobs are the major ones available. Lower-wage occupations accounted for only 21 percent of job losses during the Great Recession. They’ve accounted for 58 percent of all job growth since then.

The President’s dropping poll-ratings are only partly due to the bumbling roll-out of the Affordable Care Act. The computer glitches at HealthCare.gov aren’t the most important reason why Americans are grumpy this holiday season. The bigger problem is the economy remains lousy for most people.

Technology and globalization are taking over more and more American jobs. There’s no easy fix for this, and it’s hardly the President’s fault. But the sobering reality is the United States has no national strategy for creating more good jobs in America. Until we do, more and more Americans will be chasing great deals that come largely at their own expense.

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