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Solutions for a Sustainable World

Monday, October 13th, 2008

TNI | The Schumacher lectures are traditionally held in Bristol but have now branched out so that Schumacher North, based in Leeds, also organises the series. They occupy a day, with three people delivering lectures and a final panel. My companions for this day were Anne Pettifor, well known for her leadership of the Jubilee 2000 Debt campaign and Andrew Simms of the New Economics Foundation. My contribution was written in mid-September 2008; the continuation of the financial crisis makes it, I think, all the more pertinent.

Please first let me congratulate the organisers of Schumacher North for their initiative in bringing this lecture series and other activities of the Schumacher Society to Leeds. It’s an honour to be here and especially to share the platform with two brilliant people whom I greatly admire. I also want to thank the organisers for the privilege of honouring the memory of Dr Schumacher, a man far ahead of his time who bequeathed to us a lasting legacy. It’s a challenge to be worthy of that heritage in a lecture bearing his name.

But I intend to try. My talk today will concern the stage I’ve arrived at in a kind of reflexion in progress—I don’t mean a book, although it may well become that as well—but an effort to make sense of the fast moving events in our battered world and an attempt to think about them in a more unified way.

Philosophically speaking, the thing-in-itself, the isolated object whether it’s an electron, a human cell, an organism, a single word —even a human being—makes sense only in the context of its relationships, its place in its physical, linguistic or social environment . Margaret Thatcher once famously said, “There is no such thing as society”. She thus perfectly embodied the foundations of the neo-liberal ideological programme which should, ideally, prevent us from even thinking about ourselves and others in our natural and social context. We must be taught to believe that we are not citizens or members of a social body but discrete, individual consumers. We are entirely responsible for our own destinies and if we fall by the wayside for whatever reason—illness, job loss, accident, failure, whatever—it’s our own fault. We should have foreseen the case and planned for it. We have no responsibility for other people either. Solidarity is a banished word. Nor are we accountable for the state of the planet—homo sapiens is the only important species and humans are isolated if not immune from natural, physical laws. That’s the essence of the neo-liberal spirit: “You’re on your own” as Barack Obama has been saying to Americans to encapsulate the philosophy of his opponents.

If you are well-schooled in neo-liberalism, you will never join a social movement, never engage in a struggle against an unjust action of the government, never contribute to an effort to protect the natural world because not only will you make a fool of yourself, not only will your effort fail, but even if successful it will lead eventually to oppression, even totalitarianism, as Thatcher’s mentor Professor Friedrich von Hayek argued. And, as he also taught, economic freedom is superior to every other kind of freedom, whether political, religious or intellectual.

I believe to the contrary that our only hope lies in understanding everything we confront today as a link in an ever-more-complex chain, as an element in a system. The danger with this approach of course is to become lost and frustrated in the syndrome of “Everything is connected to everything”. That’s true, everything is connected to everything, but we still have an enormous task ahead in trying to identify the priority connections, to understand how they work together and what we can do to change them, because they definitely do need changing. I will argue that the present connections are dysfunctional, they have become perverse: they form a system that worsens the human condition and irrevocably damages the planet. But there is hope, because what has been constructed by humans can also be dismantled by them.

All this may sound rather vague so let’s get down to specifics. To make matters more concrete, I’d like to talk now about the most obvious crises we face collectively today, why they are all linked and why the solutions to them must be linked as well.

 

The first of these crises is social—the crisis of mass poverty and growing inequality within individual countries and between the rich and poor countries. The second is the financial crisis that Wall Street, the City and the public authorities refused to see coming because they were living in bubble-land. It began with the subprime affair in the United States but has spread inexorably like a lava flow in the US and elsewhere, threatening to plunge the global economy into a prolonged period of stagnation as severe as the Great Depression. Every day while I was writing this lecture at home, a new financial institution went down the drain or on the block and the end is not yet in sight. The third crisis, most ominous of all, is that of climate change and species destruction. It is accelerating faster than most scientists, much less governments, thought possible, causing many to ask if we have not already entered the era of the runaway greenhouse effect.

Each of these crises—social, financial, environmental—is negatively linked to the others, they intensify each other with negative feedback; they lead to worst-case scenarios. Let us take just a few examples of these perverse interactions.

The poverty-inequality crisis is a good place to start. This crisis is well documented; no one seriously denies the numbers. The World Bank recently recognised that it had grossly underestimated—by about 400 million—the numbers of the very poor, and even then its figures stop at the year 2005 and don’t include recent upheavals in food and energy costs that have swelled the ranks of the impoverished. Even more important, however, is the fact that for the first time in human history, there is no excuse for mass poverty and deprivation. Taking this assertion seriously already helps to point us towards a solution.

Most scholars and institutions concerned with such issues focus on poverty per se but I think it’s more useful and enlightening to focus on wealth. It may not be obvious to everyone that the world is actually awash in money. Most of it is still in North America and Europe but the numbers of the seriously rich on other continents are catching up fast. Those who have the money know very well how to keep it and, with their hired help, the battalions of lawyers, accountants and lobbyists, they are busy salting away their profits in tax havens, finding loopholes and protected investments, lobbying fiercely in parliaments and ministries against regulations on banks and financial markets. As you can see, I began by talking about poverty but I am already touching on the links with the financial crisis.

How many of you knew that ten million people, according to the latest Merrill-Lynch World Wealth Report, together boast investable, liquid funds of more than $40 trillion? That’s 40.000 billion or 40 followed by 12 zeroes. This wealth is above and beyond the value of their houses, cars, yachts, wine or art collections and so on and it is equivalent to about three times the GDP of either the United States or Europe. You might like another simple calculation. Assume that you have one billion dollars, which is the cut-off point for the latest Forbes magazine list of 1125 truly rich individuals in the world. If despite your billion you are such a dim-witted investor that you get only a five percent return on your fortune, you will still have to spend $137.000 every day of the year in sheer consumption or you will automatically become richer. My point is that cash is abundant and there’s no shortage of available wealth.

We also know a great deal about inequality. The UN World Institute for Development Economic Research, WIDER, estimates total world household assets at about $125 trillion. This is about three times world GDP and unsurprisingly, the top two percent of the world captures more than half of that wealth. The top 10 percent, which certainly includes many of us here, hold 85 percent, while the bottom half of humanity is obliged to stumble along with barely 1 percent. All you need to be classed in the top half of humanity is a meagre $2200 in total assets—that includes your house, your land or items like your car or your refrigerator—hardly a princely sum. If all household assets were divided equally—impossible and probably not even desirable to achieve—everyone on earth could have a share of $26.000. So again, money as such isn’t the problem.

 

In all the countries where 90 percent of the world’s population lives, inequalities have increased especially since the 1980s. At this point in the argument, the neo-liberals usually jump in to remind us that rising tides lifting all boats. They admit that inequalities have grown, but still argue that the poor are better off than they were. It seems almost rude to remind them in turn that falling tides have the opposite effect, they swamp and strand the more fragile boats and that is where the tide of the financial crisis is now taking us.

The real point, however, is not the absolute numbers but the fact that inequality makes the economy and also the natural environment worse for everyone, rich or poor. Two experienced academics, Tony Addison and Giovanni Andrea Cornia, put it this way: “Inequality has risen in many countries over the last two decades [and] little progress can be made in poverty reduction when inequality is high and rising….Contrary to earlier theories of development, high inequality tends to reduce economic growth and therefore poverty reduction through growth.”

Although it’s true that economic growth has reduced poverty, particularly in China, one must also ask “At what cost?” China has now overtaken the United States in greenhouse gas emissions and frighteningly has hardly even begun its transition to the automobile society. China also requires at least 10 times as much energy as the more mature industrial societies to produce a unit of GDP.

Growth certainly isn’t the answer ecologically, but even economically it fails the test because the benefits accrue almost entirely to the top of society. That is Cornia and Addison’s main point.

We have also learned in the past few months that it is entirely possible to push tens of millions of poor people off the ledge where they had just gained a foothold and send them back into the depths of poverty. Food riots, most of them urban, in at least thirty different countries have revealed another scary new phenomenon: the worldwide food crisis. Until now, food shortages and famines tended to be local, but so many societies have accepted neo-liberal trade mantras and become dependent on world markets for their basic daily staples that today a sudden spurt in prices is felt from Haiti to Egypt to Bangladesh.

The neo-liberal institutions like the World Bank, the WTO and the European Commission continue to pretend that poverty reduction will result from more growth and more trade. They fail to mention that both growth and trade will reinforce the environmental crisis. The food and energy crises have in turn strong links to the financial crisis, since speculation has been an important factor in both. Food and energy are also intimately linked to the climate crisis as one can see instantly when one thinks of carbon-loaded fossil fuels or of agro-fuels taking vast amounts of land away from food production.

 

At this point in the discussion, especially when one is speaking to concerned, engaged, decent people like those likely to be found at a Schumacher lecture, someone will raise two highly pertinent questions. The first is this: “ Isn’t there a point where people with huge fortunes say ‘enough is enough’ and start sharing?” Some do—Bill Gates and Warren Buffet are oft- cited examples. But as a class, I’m sorry to say that the answer is no. We know a lot about poverty lines but there is no such thing as a wealth line and the word “ enough “ is not part of the vocabulary of this class. You needn’t believe me. Listen to the expert who said “All for ourselves and nothing for other people seems in every age of the world to have been the vile maxim of the masters of mankind.” That was not Karl Marx but Adam Smith, in his classic 1776 treatise on capitalism, the Wealth of Nations. Little has changed since then.

The second question is “But why don’t the neo-liberal institutions, like the World Bank, the International Monetary Fund, the World Trade Organisation, the European Commission and the US government recognise that their policies have failed? Why do they keep on pushing them wherever and whenever they can?” The answer is not just that institutions are always loath to admit their mistakes, especially when these have killed and ruined so many millions. It is also that these policies have not failed.

To the contrary, they have produced exactly the results they were intended to produce. They have made a tiny fraction of international society rich beyond imagining, they have kept many dependent countries dependent in a new, less visible sort of colonial relationship and they have made so-called free trade, privatisation and unfettered capitalism the rule in countries that previously wanted little or nothing to do with them. Furthermore, they have imposed their policies with relatively little organised protest because their ideology has been expertly produced, packaged and delivered. Ideology can alas have a far stronger influence than facts. This is why we must fight on the practical front, of course, but also — I happen to believe primarily — fight the battle of ideas.

In any event, the massive funds belonging to rich people who already have most of the material goods they need or want are generally devoted to more or less speculative investments. Hedge funds, for example, are estimated to be sitting on about three trillion dollars, even today when so many investments have suffered melt-down. The financial institutions have been frantically innovating, particularly over the last decade. The entire incentive structure of the banking and finance industry has become perverse: the large institutions know perfectly well that they are “too big to fail”, consequently they also know that no matter how risky their actions, they will be bailed out by the public purse and has become all too plain. Beforehand, top management takes the money and runs.

Between the years 2000 and 2006, average annual profits of the financial sector in Great Britain averaged 20 percent—that is, two or three times the profit rate of other sectors of the economy. Huge bonuses, especially in the US and the UK, went to a handful of people, intensifying inequalities, whereas millions further down the ladder have lost their jobs and often their homes. Such profits were themselves clearly not sustainable because at some point, financial gain must be based not just on speculation but on the real economy.

Now that the bailouts are coming thick and fast, we have before us a singular example of socialism for the rich, the well-connected and Wall Street, in which the profits are grabbed by the usual suspects and the losses, tremendous losses, are billed to taxpayers. The United States has in effect nationalised these institutions and their debts—without getting anything from the financial industry in exchange.

 

As the sub-prime crisis has continued to ooze like a giant oil spill over the whole economy, speculators have searched for alternative profitable areas and created the food-price bubble trouble in which we now find ourselves. What happens then? The resource-poor, the world’s hungry, grab whatever they can, they chop down trees, kill animals and overexploit what little land they may have. Poverty is bad news for nature. But so is wealth. Even though there are far fewer of them, the rich cause much greater environmental damage with their dinosaurian ecological footprints. People who use the population argument to explain the multiple crises and who see in population control the solution are missing a crucial point—it’s not so much the number of people, although numbers are important, as their relative weight.

Furthermore, as we have repeatedly witnessed, the frequency and the fury of storms provoked by global warming hit the poor and the poorer regions of the globe hardest. There is worse to come. We have not even begun to comprehend the perils of climate change, including vastly increased numbers of environmental refugees who will crowd the planet due to droughts, flooding and crop failures. The Pentagon is already working on how to stem this tide by countering by whatever means necessary the refugees frantic efforts to reach more favourable lands. Government planning for this perfectly predictable phenomenon is limited to increased surveillance and security responses, not attempts to make outmigration less necessary. And yet the UN Intergovernmental Panel on Climate Change [IPCC] which is probably the most respected scientific body in the world, has already warned us that in Africa, the yields of rain-fed agriculture are likely to be reduced by 50 percent, deserts will gain ground, species destruction has already reached such proportions that we are in the midst of the sixth geological extinction of the planet’s four and a half billion-year history. The fifth extinction was the one that put paid to the dinosaurs.

I could go on drawing out relationships between the poverty, financial and ecological crises but I’m sure you need no more. The question is what we can do about all this and by “we” , I mean people everywhere who understand that the triple crisis is real and urgent.

Knowing that I will doubtless offend a great many people here, let me say straight away that there is an exit strategy, a genuine solution exists, but it is not in my view the one that many well-meaning environmentalists have long advocated. I’m sorry, but the time has passed for telling people to change their behaviour and their lightbulbs; that if enough people do this, then together “we” can save the planet. I’m sorry, but “we” can’t. Obviously I’m not suggesting that people shouldn’t change their behaviour and their lightbulbs—but even if the entire population of Europe does so—a most unlikely scenario—it’s not going to be enough. I agree as well with proposals for localisation and scaling down, but we have also got to scale up.

We need large-scale solutions, sophisticated, industrial solutions and huge involvement of governments in order to cut greenhouse gas emissions drastically enough to save our future. In other words, we must have the courage to challenge not just our political leadership but the entire neo-liberal, unregulated, privatised, capitalist economic system in place in order to provoke and promote a quantitative and qualitative leap in the scale of environmental action. Dare I say it here? Sometimes big can be beautiful and right now is one of those times.

Since I believe that individual and local solutions are necessary but tragically insufficient to address the seriousness and the urgency of the ecological crisis, I will use the rest of my time to discuss the twin problems of how to deal with governments and with the capitalist corporate production and financial system. The dilemma I wrestle with is this: Can we save the planet while international capitalism remains the dominant system, with its focus on profit, share-holder value, predatory resource capture and with no-holds-barred finance capital making more and more decisions? Can we rescue our natural home when confronted with a powerful caste that does not know the meaning of “enough” and is allergic to the kind of fundamental change a New Ecological Economic Order requires? Can we move forward when governments basically work for the interests of that class?

 

On bad days I reply No: We can’t save the planet. It’s impossible to reverse the climate crisis under capitalism. But that is a despairing answer and if true, it means there is virtually no hope. No hope, because I do not see how even the most convinced, most determined people could replace, much less overthrow capitalism fast enough to carry out the necessary systemic change before a runaway climate effect takes hold—always assuming it hasn’t done so already. First of all, there are not that many convinced and determined people prepared to act against the dominant economic system and there is nothing that resembles in the smallest degree an avant-garde revolutionary party that might lead them even if they existed. There is no one-size-fits-all replacement solution for capitalism. Considering the historical record and role of such parties and such solutions, I consider this an unmistakably good thing.

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But there are other obstacles to once-for-all revolutionary change. Nobody knows, figuratively speaking, who the Tsar is that we would have to overthrow today and nobody has a clue where to find the Winter Palace we would have to storm. We know the Winter Palace isn’t on Wall Street which was up and running again a few days after 11 September and is now taking full advantage of the bailouts. The US is only one of many world capitalist centres. Even if we were to win in one place, the nomadic money-moguls would simply mount their camels and head for another. The worlds of 1917 and of 2007 are utterly different, so we must try to move beyond this revolutionary impasse, this dead-end and find a new synthesis.

The question we face is not so much what to do — I think that is reasonably clear and I’m about to spell it out—but whether we will have the intelligence and the strength to seize the great opportunity with which we are now presented. Perhaps the words “great opportunity” strike you as wildly optimistic considering the long and dire preamble you’ve just listened to. However, I am now going to argue that not only are individual solutions insufficient but that the remedies offered by Kyoto, Bali, Bonn or whatever timid future agreements may be negotiated are tragically inadequate, Once more—I cannot stress this enough—the scale is crucial. And the great opportunity is to be found in the financial crisis itself. Properly targeted and used, it could open the door to the quantitative and qualitative leap we must make.

Some progressive people will reject the solution I propose, but I would then ask them what alternative they offer. The ecological crisis is of a different nature from the financial and poverty crises in the sense that once climate change is underway, as it is now, it is irreversible and we haven’t time for theoretically perfect solutions. With politics you can sometimes turn back and start over, but not where nature is concerned. So you can accuse me if you like of suggesting a way to give capitalism a new lease on life and I will plead guilty.

Let’s take first the slightly easier question “How can we deal with governments?” at least in the more or less democratic countries. China is another matter. People are generally way ahead of their governments in recognising the emergency. The political issue is not simply to “throw the rascals out” because they would be replaced by other rascals just as bad, just as beholden to the corporations, their lobbies and the financial markets. The trick is to convince politicians that ecological transformation and environmental practices can pay off politically.

 

This means that citizens, activists and experts, whether they like it or not, have got to work with local, regional and national politicians and governments; help them to find like-minded partners and formulate ambitious projects they can undertake on the broadest possible scale. Citizens, activists and experts must furthermore help these politicians and governments to become shining ecological examples with the electorate by publicising their efforts and their successes. Could the Schumacher Society become a kind of nexus for an ongoing forum of best-standards/best practice, bringing together political decision makers at every level with citizens groups and experts to discuss and carry out the best public-sector initiatives? Politicians must be convinced that these policies will not just work but also be highly popular with their constituencies.

Now let’s take the more difficult question of confronting the economic system as a whole. In his book Collapse, Jared Diamond examines several historical cases of social extinction due to over-exploitation of the environment. He identifies several common characteristics. One of these is the isolation of the elites, giving them the capacity to keep on consuming way above ecologically sustainable limits long after the crisis has already struck the poorer, more vulnerable members of society. That is where we are now globally, not just in isolated places like Easter Island or Greenland.

So how can we realistically combat the ecological footprints of our dinosaur elites, recognising that we don’t have the option of shouting “Off with their heads” in some imagined, world-wide revolution. Nor can we force them to change both themselves and the system that serves them so well, whereas we know that we must change that system because it is raping the planet and its inherent logic is to keep on doing so.

I can see only one way out: the coming together of people, business and government in a new incarnation of the Keynesian war economy strategy. I was born in the United States in 1934 and I remember well when the US switched massively to a war economy, converting all the rubber plants in my native city [Akron, Ohio] to production not for private cars and trucks but for the military. There was huge citizen involvement and support. Thousands of factories, research labs, housing projects, military bases, day care centres, and schools were built or expanded during the war. Public transport was improved and worked overtime to move millions of men and women to Army bases or new defence jobs.

Yes, there were still worker-management conflicts and yes, big corporations rather than small business got most of the government contracts but on the whole the workers were well paid, African-Americans and women began making a few modest gains and the whole war effort finally pulled the United States out of the Depression—it was Keynesianism on a huge scale. There was also an elite group of businessmen called “Dollar-a-Year Men” on loan from their companies to the government, who were charged with making sure that military production and quality targets were met. They had enormous prestige—my godfather was one and I was doubtless insufferable bragging to my little school friends about him.

 

Why am I going back over this ancient history? Because I think we have a similar opportunity today. The US and the world economy are heading downhill fast and the fallout for ordinary people in terms of jobs, housing, consumption and future welfare is going to be grave. If this diagnosis is right, then some new economic tools will have to be used to combat recession and stagnation, simply because the old ones have already been pushed to their limits and have little or nothing left to give.

The way Central Banks and Treasuries usually try to solve financial recession or depression is through standard remedies like interest rate cuts, currency devaluations or incurring new debt—but the United States has reached the end of its leash on that score. Interest rates are already extremely low—although not in Europe, where the European Central Bank and its hidebound president are ideologically committed to the same sorts of monetary policies that prolonged the Great Depression in the 1930s. The dollar is already weak, which makes US exports cheaper, but it can’t be devalued much further without risk. Deficit spending is already beyond belief. With the bailout of Fannie Mae and Freddie Mac, the Federal Reserve in effect took on their bad debt and added hugely to the liabilities of the United States Treasury. It risks doing so again. Households too are over-indebted and are losing more equity every day as the value of their dwellings deteriorates.

Since the traditional tools are worn out, the only new tool I can think of to pull the world out economic ruin and social chaos is a new Keynesianism, not military this time, but environmental; a push for massive investment in energy conversion, eco-friendly industry, new materials, efficient public transport; the green construction industry and so on.

Stringent standards for new buildings must become the norm; older ones can be “retro-fitted” on easy financial terms; families and commercial property-owners can receive financial incentives for installing green roofs and solar panels and sell excess energy to the grid. Research and development can be oriented towards alternative energies and strong, ultra-light materials for airplanes and vehicles. Technically speaking, we already know how to do such things, although some clean solutions are still more costly than dirty ones. Mass-produced, they would become less so.

All these new, eco-friendly industries, products and processes would have huge export value and could quickly become the world standard. I am trying to describe a scenario that can be sold to the elites because I don’t think they will embrace genuine environmental values and conversion if there’s nothing in it for them. But this approach is not merely a cynical attempt to get the elites to move in their own interests. There are also plenty of advantages in such an economy for working people. A huge ecological conversion is a job for a high-tech, high-skills, high-productivity, high-employment society. It would be supported, I believe, by the entire population because it would mean not just a better, cleaner, healthier, more climate-friendly environment, but also full employment, better wages, and new skills, as well as a humanitarian purpose and an ethical justification—just like World War II.

How could one finance such a huge effort? It would have to involve targeted government spending in the traditional Keynesian sense and governments are bound to complain that they haven’t the means to carry out such a policy.

The financial crisis provides the ideal opportunity both to finance the conversion and to get the runaway global financial system under control.

At present, taxes almost always stop at national borders. The secret is to take taxes up to the European level and to the international one through currency and other financial transaction taxes. People who oppose such schemes pretend they are not feasible because one would need to obtain the consent of every national jurisdiction in the world, but that is not correct. In fact, currency and other transaction taxes would require nothing more than political determination, the cooperation of the Central Bank and a few lines of software. For the currency transaction tax first proposed by James Tobin in the 1970s and now considerably refined, the tax base is the currency itself, not the place it’s traded. Thus the European Central Bank could easily collect the taxes on any transactions involving euros, the Bank of England the same for the pound, the Fed for the dollar and so on. Since currency trades now amount to $3.2 trillion dollars every day, a tax of one basis point, that is, a levy of one per thousand could raise a tidy sum for ecological conversion and poverty reduction. Britain already imposes a tax on stock market transactions but other European countries do not and should imitate Britain.

Carbon taxes are another much mooted and equally feasible idea. So is a unitary profits tax on transnational corporations, which would require knowing the total sales of the company, the total taxes paid, the sales realised in each jurisdiction and the tax paid in each jurisdiction. If, for example, a TNC reported that in country X, a particularly low-tax jurisdiction, it made 5 percent of its sales yet paid 50 percent of its taxes, the authorities would find it a bit fishy. I’m presenting an extremely crude summary here but believe me, there are experts—bankers, corporate lawyers, fiscal experts and accountants—who know exactly how to do such things. Perhaps to encourage more local consumption, one could also think about taxing the miles travelled by the food we eat and the clothes we wear.

We would not forget the poor countries of the South which are the major terrain of the poverty crisis. Debt cancellation for poor countries that the G-8 has been promising for a decade must finally happen but against the requirement that these countries also contribute to the planetary environmental effort through re-forestation, soil conservation, species protection and the like. They would also be required to involve their own people in democratic decision-making and the funds would be carefully monitored by independent auditors.

Tax havens that allow affluent individuals and corporations to avoid paying their fair share of the conversion should be shut down: it would be cheaper to pay the inhabitants of the Cayman Islands, Liechtenstein and the rest a living wage for twenty years. Plenty of cash would remain for eco-investments, job-creation and poverty relief.

In exchange for their bailouts, the banks and investment houses have to accept regulation—not just regulations to insure transparency and eliminate the incentives for stupid behaviour but also more stringent ones forcing them to participate in the ecological offensive. They should be obliged to devote X percent of their loan portfolios to eco-projects at below market interest rates—which they could make up by charging much higher rates on loans to dirty or otherwise anti-ecological projects. Low or no-cost financing for home conversion projects should be another compulsory priority for banks. This could give a huge spurt to the construction industry.

 

Nobody is asking for the moon here. Banks would still make loans, finance investments and earn a fair return for their services. Taxes on currency transactions at one basis point are not going to ruin anyone. Unitary profits taxes on large corporations would simply return us to the era when the companies paid their taxes because they couldn’t avoid them. The point is that a Keynesian taxation and redistribution system would be invested, nationally and internationally, both ecologically and socially, in education, health care, clean, green energy, efficient water distribution, communications technology, public transport, and various other things the world needs and that we already know how to do. These measures would, in turn go a very long way to creating opportunities for far more people to participate in the new green economy through jobs, life-long education, more social protection and reduced inequality. Getting the present financial crisis-producing, free-flowing, unregulated financial system under public and citizen control is the prerequisite for solving both the environmental and the poverty crises.

In other words, it’s a Public Relations dream. Whichever political parties understand this can win on such a programme without anyone having to bring down the entire capitalist system as a prior condition for saving the planet.

A Keynesian ecological programme would furthermore bring many constituencies together in a common cause. As matters now stand, politically speaking, no single interest group can solve the problem that concerns it most. By this I mean that, by themselves, ecologists can’t save the environment; farmers alone can’t save family farms; trade unions alone can’t save well-paid jobs in industry and so on. Broad alliances are the only way to go, the only strategy that pays. The Global Justice Movement, as international social activists call it, has begun to have some success in working democratically and making alliances with partners who come from different constituencies but are basically on the same wavelength.

Now we must go beyond this stage and attempt something more difficult: to forge alliances also with people we don’t necessarily agree with on quite major questions—for example, with business. This can only be accomplished by recognising that disagreements, even conflicts, can be fruitful and positive so long as the areas where it is possible to agree are sought out, identified and built upon. We must find where the circles of our concerns overlap. At least one of those overlaps ought to be saving our common home. I don’t see any other way of generating citizen enthusiasm, involvement and the qualitative and quantitative leap in scale that is now required.

I haven’t time to elaborate on all the technical details concerning the content and the financing of necessary environmental investments. What I can do is guarantee you that the conversion to a green economy is technically feasible. The schemes for new taxes have been thought through; the industrial prototypes already exist; the machinery is ready to hum into action the moment people can make their politicians accept the challenge. Getting the financial system under control and taxing international capital at quite ridiculously low rates in order to redistribute it institutionally and internationally would be enormously popular. We could seriously attack climate change and eliminate the worst of world poverty within a decade. We are talking politics, not technical aspects here and trying to figure out a way to tame the raging beast, the crisis-producing, free-flowing, unregulated financial system and putting it under public and citizen control.

Capitalism is not sane in the sense that most people understand sanity. We humans normally think about our future, that of our children and the future of our countries and the world. The market, on the contrary, operates in the eternal present which, by definition, cannot even entertain the notion of the future and therefore excludes safeguards against future, looming destruction unless these safeguards are imposed upon it by law.

 

We need law, for sure, and political forces with the backbone to propose and to vote the law into existence, but we also need to think about human motivation. Remember the prestigious Dollar-a-Year Men of the 1940s and imagine what might happen if we could transpose them into the world of 21st century capitalism. A significant number of contemporary captains of capitalism, all of them with bloated, unimaginable salaries, might be brought to believe that money is all very well, but is there nothing more? Why not found an extremely exclusive Order of the Earth Defenders, or the Environmental Knights or the Carbon Conquerors who alone, in recognition of their special contributions to the national and international environmental conversion effort. They would have the right to display a highly visible emblem on a banner in front of their homes; a fanion on their cars, a green and gold rosette in their buttonholes like the French Legion d’Honneur or a Congressional Medal of Ecological Honour. They would belong to the small assembly of the anointed; those who provide the means and have the honour of saving the earth. Becoming a member ought to appeal to their competitive spirit.

In conclusion, let me say that myth has always been the driving force of every great human achievement, from Greek democracy to the Renaissance to the Enlightenment and the American and French Revolutions. So must it be in the coming age of Ecological Stewardship. To save the planet, we must change, quickly and profoundly, the way the majority thinks and feels and acts, and we must start with the social forces we have right here and right now, and no others. It’s no use wishing they were different ones or stronger, or wiser. We must play the hand history deals us.

For such a change, we will need six “Ms”, starting with Money, Management and Media. But even more important than these three “Ms”, we must try to create a new sense of Mission and Motivation and Myth at the noblest level. “Myth” in this sense has nothing to do with story-telling or lies. It is the grand narrative that empowers us to believe that we can accomplish what we must accomplish. It speaks to the deepest motivations of human consciousness and inspires the desire for honour and for a life’s work which transcends death. The elites already have Money, Management, Media. On our side, we have Mission, Motivation and Myth. If we can bring together all these, the future will take care of itself.

And wouldn’t that be nicer than having another war?

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Iraqi government fuels ‘war for oil’ theories by putting reserves up for biggest ever sale

Monday, October 13th, 2008

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New Evidence of Systemic Bias in Guantánamo Trials

Monday, October 13th, 2008

By Andy Worthington - andyworthington.co.uk |

Andy Worthington, author of The Guantánamo Files, continues his analysis of the corrupt command structure of the Military Commissions at Guantánamo, with new information from Maj. David Frakt, one of the Commissions’ military defense lawyers.

In the last three weeks, two events have occurred that have dealt what should have been a knockout blow to the Military Commissions at Guantánamo, the system of trials for “terror suspects” — outside of the US court system and the US military’s own judicial system — that was created by Vice President Dick Cheney and his close advisers (in particular, his legal counsel David Addington) in November 2001.

On September 24, Lt. Col. Darrel Vandeveld, the prosecutor in the case of Mohamed Jawad (an Afghan accused of throwing a grenade at a jeep containing two US soldiers and an Afghan interpreter), resigned, expressing his frustration and disappointment that “potentially exculpatory evidence” had “not been provided” to Jawad’s defense team, and on September 19 Brig. Gen. Hartmann, the Commissions’ legal adviser, was “reassigned” after three Commission judges — all US military officers, appointed by the government — had disqualified him from two trials (and one post-trial review) because of his transparent pro-prosecution bias. This was particularly worrying, because his job description — as laid down in the Military Commissions Act of 2006, which revived the Commissions after the Supreme Court ruled them illegal — stipulated that he was required to “remain neutral and unbiased.”

Last week, following further analysis — including important work by law professor Scott Horton –- I wrote a detailed article, The Dark Heart of the Guantánamo Trials, in which I drew on examples of pro-prosecution bias on the part of Hartmann’s boss, Susan Crawford, the Commissions’ Convening Authority, and traced this systemic bias up the chain of command, via the Pentagon’s General Counsel, to Dick Cheney and David Addington, the creators of the entire Commission process. Cheney and Addington’s zeal for unfettered executive power indicated, in no uncertain terms, that the impartiality of both Hartmann and Crawford was nothing more than a cloak to disguise the Commissions’ naked political aims: securing convictions in a rigged system designed to prevent acquittals.

As the Washington Post recently explained, the Convening Authority is “required to exercise a neutral role in the commissions, overseeing but not dictating the work of prosecutors and allocating resources to both the prosecution and defense,” but a clear example of Crawford’s pro-prosecution bias was revealed by Col. Morris Davis, the Commissions’ former chief prosecutor, who resigned in October 2007, primarily because of political interference in the process.

Writing in the Los Angeles Times last December, Davis wrote that Crawford, unlike her predecessor Maj. Gen. John Altenburg, whose staff had “kept its distance from the prosecution to preserve its impartiality,” had overstepped her administrative role, and “had her staff assessing evidence before the filing of charges, directing the prosecution’s pre-trial preparation of cases” and “drafting charges against those who were accused and assigning prosecutors to cases.” Davis’ stark conclusion — that “Intermingling convening authority and prosecutor roles perpetuates the perception of a rigged process stacked against the accused” — was unerringly accurate, but with Hartmann shielding her from criticism (and taking all the flak himself), Crawford has so far avoided calls for her resignation, even though, as Scott Horton pointed out in February, she is “a Cheney protégée,” and is, moreover, “particularly close to Cheney’s chief of staff David Addington.”

Shortly after my article about the corrupt command structure of the Commissions was published, I received an enlightening email from Maj. David Frakt, Mohamed Jawad’s military defense lawyer, which provided additional details confirming the bias of both Brig. Gen. Hartmann and Susan Crawford.

More criticism of Brig. Gen. Hartmann

Maj. Frakt was kind enough to point out that “Hartmann was fired,” and that “his claim that he was promoted is nonsense.” He cited testimony by Hartmann in Jawad’s case on June 19, and in a subsequent affidavit, in which he stated that he had three different duties as legal adviser: he was responsible for logistics, planning and resources, he was the supervisor of the prosecution, and he was the legal adviser. As Maj. Frakt explained, “His promotion consisted of removing two of those three duties. He is now responsible only for logistics, planning and resources.”

He added that most of this work is done by the Commissions Support Group (CSG) at Guantánamo, headed by Brig. Gen. Zanetti, who testified in a hearing on Jawad’s case in August that “Hartmann had tried to have the CSG assigned to his ‘command’ even though he was in Washington and lawyers do not generally command anything,” and confirmed that Hartmann “was definitely trying to take charge of the whole process.” I found Zanetti’s comment that “lawyers do not generally command anything” (as paraphrased by Maj. Frakt) to be particularly telling, as it reflects the way in which lawyers (Addington, John Yoo, Alberto Gonzales) have actually played crucial roles in driving the cruelest manifestations of the administration’s “War on Terror” policies.

Maj. Frakt also drew my attention to other examples of Hartmann’s overreach: in particular, a timeline for the trials that he created in November 2007, and reports about the ways in which he had briefed commanders at Guantánamo on his plans, both of which exceeded his remit as an impartial adviser.

According to Capt. Patrick McCarthy, the Staff Judge Advocate of Joint Task Force Guantánamo, who made a deposition in Jawad’s case on June 30 at Maj. Frakt’s request, Hartmann (who, he said, was “remarkably aggressive” to him during meetings at Guantánamo) briefed him in November 2007 on “a plan for a way forward on the number of cases that would be charged in each month.” He explained, “He has a large foldout chart that’s probably three or three and a half, four feet long. It’s a well-known chart and it has on that chart the kind of lay down of how many cases will be proceeding and sort of monthly times as they will proceed.”

Hartmann admitted the existence of this timeline during the hearing on June 19, and as Maj. Frakt demonstrated in a motion to dismiss in August, when he compared the dates on Hartmann’s chart with the dates the prisoners were actually charged he realized that they were remarkably similar. “It is easy to come up with a sinister explanation for the congruence of the chart and the scheduling order,” he wrote, adding, “It is hard to come up with an innocent one.”

Capt. McCarthy also testified that, as well as being bullying and dismissive to himself and, it seemed, every other officer below the rank of General or Admiral at Guantánamo, Hartmann had held several secure video teleconferences with the commanders at Guantánamo, and two face-to-face meetings, which, it appeared, were also part of his mission to “brief” commanders on how and when the trials would proceed, rather than allowing these issues to be developed by the prosecutors. As McCarthy described it, Hartmann “would closely identify himself with prosecutorial efforts,” was “involved at a level of detail that no other general or flag officer that I’ve ever worked for or with has ever been involved at,” and gave the impression that he was “responsible for moving forward with military commissions in all respects.”

More disturbing revelations about the Convening Authority

Maj. Frakt also revealed more disturbing details about Susan Crawford’s role. After revisiting the August ruling of Col. Stephen Henley, the judge in Jawad’s case, who disqualified Hartmann for a second time, and “ordered that the defense be given an opportunity to submit matters in extenuation and mitigation, and that Crawford reconsider her referral decision and either ratify the earlier decision or take other appropriate action without further input from Hartmann,” Maj. Frakt explained that in early September “the prosecutors sought reconsideration of the judge’s ruling, filing a brief which included an affidavit from Hartmann and an affidavit from Crawford herself.”

This is enormously significant, as it provides another concrete example of Crawford’s interference, to add to Col. Davis’ account, and it is made all the more disturbing by Maj. Frakt’s subsequent explanation of how Hartmann and Crawford seemed to connive to sway the judge’s opinion. Their argument, he wrote, centered on claims that Crawford “had not been misled by Hartmann’s recommendation that the case against Jawad be referred as non-capital,” which, as he pointed out, “was misleading because it suggested that capital punishment was an option, when it was not an authorized punishment for the offenses with which Jawad is charged.” The end result, he noted, was that “The brief filed by the government severely distorted the facts.”

Despite this, Col. Henley amended his ruling the next day, authorizing Hartmann to review the matters submitted by the defense and to supplement his original pre-trial advice. Maj. Frakt was appalled. He had been denied the opportunity to respond (as he stated, he was “supposed to get one week to respond to filings from the opposing party”), and he immediately filed a motion “pointing out the factual errors in the government brief and protesting this action, including the fact that the judge acted without input from the defense.” Most importantly, he “requested that Crawford be disqualified since she had made herself a witness in a contested matter before the commission.” He noted, however, that “The judge never responded.”

In addition, Maj. Frakt explained that, although he knew that it was “completely futile” to submit a request for reconsideration, he nevertheless “put together a detailed memorandum explaining the evidentiary, factual and legal deficiencies in the case and detailing the extensive mitigating and extenuating circumstances,” which he submitted on September 15. He also included letters from concerned citizens, a petition urging Crawford to drop the case, and various legal documents, but explained that, although he “repeatedly requested a personal audience” with Crawford, “she refused to meet with me, citing a policy of not having ex parte communications with either party.” Cutting once more to the heart of the problem — Crawford’s thinly-veiled bias — Maj. Frakt added, “This is utter nonsense. She is not a judge and is specifically authorized to discuss matters with either party.”

Mohamed Jawad and the fog of “war crimes”

Moreover, Hartmann’s departure has clearly done nothing to stem Crawford’s enthusiasm for referring charges without paying any heed to arguments made by the defense, and in this she seems to have the full support of Hartmann’s replacement, Col. Mike Chapman. Maj. Frakt explained that on September 22 (Chapman’s first day as legal adviser) he issued a new pre-trial advice to Crawford — “chock full of misleading characterizations of the facts and misstatements of the law,” as Maj. Frakt put it — in response to his submissions, in which he stated that there was “no merit to the defense arguments.” The following day, as Maj. Frakt proceeded to explain, “Crawford ‘ratified’ her referral decision and confirmed that she wanted the case to go forward.” However, while this appears to be another example of Crawford’s predetermined inflexibility, which leads me to wonder if anything could persuade her not to go forward with the cases before her, Jawad, at least, appears to have some support from the judge in his case.

On September 24, Col. Henley issued three rulings on motions to dismiss that were filed in May and June, and Maj. Frakt explained that, although he “declined to dismiss the charges,” he “came very close.” Essentially, as Maj. Frakt described it, Col. Henley “ruled that the government had offered no persuasive authority for their legal position on the meaning of the elements of ‘murder in violation of the law of war’” (the offense Jawad is accused of committing, even though no one died in the grenade attack). According to the government, Jawad’s status as an “unlawful combatant” or “unprivileged belligerent” (variants on the familiar label of “enemy combatant”) is all that is required to prove that his acts were “in violation of the law of war.”

This is actually nonsense, and Maj. Frakt proceeded to explain that a violation of the law of war should actually mean that there was “something in the nature of the act allegedly committed by Jawad that violated the law of war (e.g. an illegal weapon was used, or protected persons were targeted).” He added, “Because Jawad is accused of using a lawful weapon to attack lawful targets (uniformed enemy soldiers) there is no independent violation of the law of war.”

Col. Henley seemed to agree, but he “declined to dismiss the case because he said he did not know what evidence the government had and would give them a chance to prove their case,” although he added that if the prosecution “didn’t have any facts that would tend to prove a violation of the law of war, then they had an independent ethical obligation to go to the Convening Authority and ask her to dismiss the charges.”

He then ordered the government to provide a “bill of particulars” (a statement of facts detailing how the prosecution would prove the elements of the offense), but as Maj. Frakt described it, this document “simply rehashed the government’s prior stance that the violation of the law of war consisted of not being a lawful combatant and wearing civilian clothes to blend in with the local population.” Pointing out the absurdity of this position, he explained, “The government states he is an unlawful combatant because he was not a member of a regular army in military uniform, but then claims his violation of the law of war was wearing civilian clothes.” He added, “I have noted several times that Jawad was part of the local population. He is an Afghan citizen.”

Quite how this absurd trial will pan out remains to be seen, but if there is hope for Mohamed Jawad, the same cannot be said for the Commissions in general, which are suffering from inbuilt problems that cannot be remedied by the dismissal of either the legal adviser to the Convening Authority or the Convening Authority herself — although the accumulating evidence certainly suggests that, like Brig. Gen. Hartmann, Susan Crawford should be removed from her post.

Enshrining political manipulation

Several legal scholars have been noting these problems for some time. In August, for example, Professor Gregory S. McNeal, a former academic consultant to the Commissions’ chief prosecutor, wrote that the structure and rules for the Commissions, as crafted by the Department of Defense, “allowed for political manipulation of nearly all aspects of the trials.”

One of the major flaws identified by McNeal was the nature of the Convening Authority’s role. In the courts-martial system, from which the Commissions are vaguely derived, the Convening Authority is a military commander, who is presumed to be capable of “unbiased and apolitical decision-making.” In the Military Commissions Act, however, it is stated that Military Commissions “may be convened by the Secretary of Defense or by any officer or official of the United States designated by the Secretary for that purpose”; in other words, that civilians, like Susan Crawford, can be brought in to deliberately exert the “undue command influence” with which both she, and her legal adviser, have repeatedly been identified.

In my opinion, this is a crucial distinction, deliberately tailored by the administration to allow a puppet of the executive to fulfil her master’s commands, and it explains, I think, why there will be no justice at Guantánamo until the whole system is dismantled and the trials are moved to the US mainland, where judges are free to throw out risible and/or rigged charges like those against Mohamed Jawad, and to grapple, independently, with the problems they will undoubtedly face in prosecuting the handful of genuinely dangerous individuals at Guantánamo in a court that can claim legitimacy.

Until this time comes, I am thankful to Maj. Frakt for sharing his insights with me, and I will continue to expose the “undue command influence” that poisons Dick Cheney and David Addington’s ill-conceived, quasi-legal system of show trials.

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Chomsky: Anti-Democratic Nature of US Capitalism is Being Exposed

Monday, October 13th, 2008

By Noam Chomsky

THE SIMULTANEOUS unfolding of the US presidential campaign and unraveling of the financial markets presents one of those occasions where the political and economic systems starkly reveal their nature.

Passion about the campaign may not be universally shared but almost everybody can feel the anxiety from the foreclosure of a million homes, and concerns about jobs, savings and healthcare at risk.

The initial Bush proposals to deal with the crisis so reeked of totalitarianism that they were quickly modified. Under intense lobbyist pressure, they were reshaped as “a clear win for the largest institutions in the system . . . a way of dumping assets without having to fail or close”, as described by James Rickards, who negotiated the federal bailout for the hedge fund Long Term Capital Management in 1998, reminding us that we are treading familiar turf. The immediate origins of the current meltdown lie in the collapse of the housing bubble supervised by Federal Reserve chairman Alan Greenspan, which sustained the struggling economy through the Bush years by debt-based consumer spending along with borrowing from abroad. But the roots are deeper. In part they lie in the triumph of financial liberalisation in the past 30 years - that is, freeing the markets as much as possible from government regulation.

These steps predictably increased the frequency and depth of severe reversals, which now threaten to bring about the worst crisis since the Great Depression.

Also predictably, the narrow sectors that reaped enormous profits from liberalisation are calling for massive state intervention to rescue collapsing financial institutions.

Such interventionism is a regular feature of state capitalism, though the scale today is unusual. A study by international economists Winfried Ruigrok and Rob van Tulder 15 years ago found that at least 20 companies in the Fortune 100 would not have survived if they had not been saved by their respective governments, and that many of the rest gained substantially by demanding that governments “socialise their losses,” as in today’s taxpayer-financed bailout. Such government intervention “has been the rule rather than the exception over the past two centuries”, they conclude.

In a functioning democratic society, a political campaign would address such fundamental issues, looking into root causes and cures, and proposing the means by which people suffering the consequences can take effective control.

The financial market “underprices risk” and is “systematically inefficient”, as economists John Eatwell and Lance Taylor wrote a decade ago, warning of the extreme dangers of financial liberalisation and reviewing the substantial costs already incurred - and proposing solutions, which have been ignored. One factor is failure to calculate the costs to those who do not participate in transactions. These “externalities” can be huge. Ignoring systemic risk leads to more risk-taking than would take place in an efficient economy, even by the narrowest measures.

The task of financial institutions is to take risks and, if well-managed, to ensure that potential losses to themselves will be covered. The emphasis is on “to themselves”. Under state capitalist rules, it is not their business to consider the cost to others - the “externalities” of decent survival - if their practices lead to financial crisis, as they regularly do.

Financial liberalisation has effects well beyond the economy. It has long been understood that it is a powerful weapon against democracy. Free capital movement creates what some have called a “virtual parliament” of investors and lenders, who closely monitor government programmes and “vote” against them if they are considered irrational: for the benefit of people, rather than concentrated private power.

Investors and lenders can “vote” by capital flight, attacks on currencies and other devices offered by financial liberalisation. That is one reason why the Bretton Woods system established by the United States and Britain after the second World War instituted capital controls and regulated currencies.*

The Great Depression and the war had aroused powerful radical democratic currents, ranging from the anti-fascist resistance to working class organisation. These pressures made it necessary to permit social democratic policies. The Bretton Woods system was designed in part to create a space for government action responding to public will - for some measure of democracy.

John Maynard Keynes, the British negotiator, considered the most important achievement of Bretton Woods to be the establishment of the right of governments to restrict capital movement.

In dramatic contrast, in the neoliberal phase after the breakdown of the Bretton Woods system in the 1970s, the US treasury now regards free capital mobility as a “fundamental right”, unlike such alleged “rights” as those guaranteed by the Universal Declaration of Human Rights: health, education, decent employment, security and other rights that the Reagan and Bush administrations have dismissed as “letters to Santa Claus”, “preposterous”, mere “myths”.

In earlier years, the public had not been much of a problem. The reasons are reviewed by Barry Eichengreen in his standard scholarly history of the international monetary system. He explains that in the 19th century, governments had not yet been “politicised by universal male suffrage and the rise of trade unionism and parliamentary labour parties”. Therefore, the severe costs imposed by the virtual parliament could be transferred to the general population.

But with the radicalisation of the general public during the Great Depression and the anti-fascist war, that luxury was no longer available to private power and wealth. Hence in the Bretton Woods system, “limits on capital mobility substituted for limits on democracy as a source of insulation from market pressures”.

The obvious corollary is that after the dismantling of the postwar system, democracy is restricted. It has therefore become necessary to control and marginalise the public in some fashion, processes particularly evident in the more business-run societies like the United States. The management of electoral extravaganzas by the public relations industry is one illustration.

“Politics is the shadow cast on society by big business,” concluded America’s leading 20th century social philosopher John Dewey, and will remain so as long as power resides in “business for private profit through private control of banking, land, industry, reinforced by command of the press, press agents and other means of publicity and propaganda”.

The United States effectively has a one-party system, the business party, with two factions, Republicans and Democrats. There are differences between them. In his study Unequal Democracy: The Political Economy of the New Gilded Age, Larry Bartels shows that during the past six decades “real incomes of middle-class families have grown twice as fast under Democrats as they have under Republicans, while the real incomes of working-poor families have grown six times as fast under Democrats as they have under Republicans”.

Differences can be detected in the current election as well. Voters should consider them, but without illusions about the political parties, and with the recognition that consistently over the centuries, progressive legislation and social welfare have been won by popular struggles, not gifts from above.

Those struggles follow a cycle of success and setback. They must be waged every day, not just once every four years, always with the goal of creating a genuinely responsive democratic society, from the voting booth to the workplace.

* The Bretton Woods system of global financial management was created by 730 delegates from all 44 Allied second World War nations who attended a UN-hosted Monetary and Financial Conference at the Mount Washington Hotel in Bretton Woods in New Hampshire in 1944.

Bretton Woods, which collapsed in 1971, was the system of rules, institutions, and procedures that regulated the international monetary system, under which were set up the International Bank for Reconstruction and Development (IBRD) (now one of five institutions in the World Bank Group) and the International Monetary Fund (IMF), which came into effect in 1945.

The chief feature of Bretton Woods was an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value.

The system collapsed when the US suspended convertibility from dollars to gold. This created the unique situation whereby the US dollar became the “reserve currency” for the other countries within Bretton Woods.

Noam Chomsky is professor emeritus of linguistics at the Massachusetts Institute of Technology. His writings on linguistics and politics have just been collected in The Essential Chomsky, edited by Anthony Arnove, from the New Press.

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Fisk ’shocked’ by US failure to debate conflict in Israel

Monday, October 13th, 2008

By Amol Rajan | A feisty debate between Robert Fisk and the author Professor Sir Lawrence Freedman brought The Independent Woodstock Literary Festival to a close on a high note last night.

 

The absence of a debate on the conflict between Israelis and Palestinians in the US presidential elections was “shocking”, Fisk told a packed hall at Blenheim Palace, the grand 18th-century home in Woodstock, Oxfordshire, which hosted the festival.

“America must pull its military forces out of Iraq and the Middle East, leaving the peoples of the region to decide their own future,” said Fisk, an author and Middle East correspondent for The Independent. He said the US and its allies had “built a new Iron Curtain from the ice cap to the equator”, and added that the result of the elections on 4 November “would not make the slightest bit of difference in the Middle East”.

“America’s uncritical support for Israel is going to continue,” he said.

Professor Freedman, of King’s College, London, however, provided stiff resistance, arguing that the United States must play a constructive role in the region and around the globe.

The debate was one of a series of discussions with leading figures from the worlds of literature, the arts and politics that have engrossed audiences since the festival began last week.

Only a few hours before Fisk and Professor Freedman’s appearance, the acclaimed historian, Simon Schama, spoke to The Independent columnist Deborah Orr about his new book The American Future: A History, which accompanies a current BBC series.

Hundreds watched Schama lament the collapse of American self-confidence under George Bush. The historian, who spent much of his career at Oxford but is now based at Columbia University in New York, made no attempt to hide his view that the Democratic candidate, Barack Obama, could help renew the ideals that inspired the birth of the American nation.

Speaking in the splendour of the palace Orangery, Schama described Mr Bush as a “comical little front man” for what ought to be considered the “Cheney administration”.

Schama also derided the Republican presidential candidate, John McCain, for running a divisive campaign that would backfire in states that didn’t already support him.

And he said that vice-presidential candidate Sarah Palin’s comment at a rally last week that Mr Obama “is not a man who sees America the way that you and I see America” had racist undertones that made it “morally repellent”. It was, Schama said, “code for depicting Obama as the Other”.

In one of the early highlights of the festival, the Conservative Party leader, David Cameron, took to the stage on Friday in an apparent attempt to cast himself as the heir to Tony Blair. In an interview with Simon Kelner, editor-in-chief of The Independent, Mr Cameron, who celebrated his 42nd birthday last Thursday, declared: “I’m a very straightforward person.”

The comment invoked Mr Blair’s assertion that he was “a pretty straight kind of guy”.

Other prominent speakers to draw large crowds included the typically forthright war correspondents Martin Bell and Ann Leslie, novelists Elizabeth Jane Howard and P D James, 85 and 88 respectively, and two Independent columnists: novelist Howard Jacobson and chef Mark Hix.

Dame Ann, promoting an autobiography which includes compelling details about her time on the front line, issued a hurried apology after uttering a four letter expletive in Woodstock’s Church of St Mary Magdalene.

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