Archive | Economics RSS feed for this section

Why Socialism?

16 Apr

by J. Bialek

The spectre which once haunted Europe long ago in 1848, materialized in corporeal form in 1917 and was seemingly exorcized in 1991 has returned in force. This time the “spectre of communism” is haunting the entire world. In 1848, Karl Marx and Friedrich Engels published the Manifesto of the Communist Party, also called The Communist Manifesto, in order to explain to the population at large the general beliefs of communists, and to differentiate communists from liberals and other social movements which existed during that revolutionary era.

Today it cannot be denied that we are once again living in a revolutionary era. As capitalism continues to degenerate, demonstrating with each passing day that it has outlived its usefulness to the vast majority of humankind, we see violent explosions of popular rage, ranging from peaceful demonstrations to chaotic riots. The ruling class and its “free” press would have us believe that even in these dark times progress is being made. We have the Arab Spring, a series of revolutions supposedly made possible thanks to the help of the Western-developed Twitter and Facebook. The Occupy protests, which complained of a media blackout during its infancy, soon managed to capture the attention of the world and to make its mark on the year 2011. As the media would have it, all that is necessary to solve the ills of the world are “democratic” revolutions in certain countries such as Egypt, but not in others such as Saudi Arabia, Bahrain or Yemen, and of course maybe a little more participation for “the little guy” in American politics. While the press has in recent years admitted that there are some flaws in the global economic system, those who have been paying attention since the start of this crisis might have noticed an explosion of increasingly shrill anti-communist propaganda.

The renewed interest in Marx and his theories, along with a rising tide of dissatisfaction and nostalgia for pre-1989 life within the former Eastern Bloc nations and the ex-U.S.S.R., has clearly sent chills down the spines of Europe’s elite. Their message could not be more clear. On one hand the media concedes that something is broken with the capitalist system, but on the other hand it warns the working class not to consider alternatives to capitalism. They are once again trying to exorcize this spectre that is haunting them, and indeed terrifying them; they insist that the working class limit their protests against the system so as to fit within the boundaries established by the ruling class. For them the greatest tragedy would be the rejection of the slogan that there is no alternative to capitalism and the assumption that mankind has reached its peak of societal evolution in the system of free markets and commodity trading. So here we are again, so far from 1848, and communists are again compelled to disclose their ideas and distinguish themselves from all other factions who claim to have a solution to our present crisis.

In these times of crisis it comes as no surprise that working people find themselves faced by a large number of proselytizers from a wide spectrum of ideological backgrounds preaching the superiority and explanatory power of their ideas. Each has an explanation as to why we are in this crisis today and a set of proposals which can supposedly solve the problem. In this marketplace of ideas, Marxists cannot pretend as though we sit above the fray, treating our theory as some kind of esoteric revealed knowledge in a manner similar to many of those aforementioned ideologues. We have an explanation, a theory, but what sets us apart is not simply our assertion that these are true, but rather that what we are truly offering is not so much a set of pre-packaged answers which constitute some kind of universal truth, but rather a methodology of analysis which allows people to find what can reasonably be judged as true.  This is not to state that we do not believe in the correctness of our theories, but that Marxism is a living theory to which we add our observations and experiences year after year, rejecting that which has been found to be no longer accurate and adopting that which is relevant and observable.

Other ideologies will claim that our problems stem from lack of regulation, too much regulation, the Federal Reserve, hierarchical authority, the Illuminati, the breakdown of the family, “multiculturalism” and a whole host of other scapegoats either real or imagined. By contrast, while Marxist analysis has identified certain laws or truth about the history of human society and the capitalist system, it is up to us in modern times to apply this analysis to our changing world, and to come up with answers based on our analysis rather than simply accepting some alleged axioms and then setting about to envision our ideal world. In this sense, Marxism does not reject all ideas outside of itself; in fact it does acknowledge the validity of many other ideas or concepts. However, Marxists see in many of these other ideological strains the neglect, either by accident or design, of certain factors which, without being accounted for, cause these other ideological analyses to be lacking and one-sided.

If we consider as an example neo-classical or “mainstream” economics, we cannot fault its proponents for ignoring class struggle, denying the existence of exploitation, and not dealing with the question of creating a more egalitarian, just society. Neo-classical economics was never intended to deal with these matters, and indeed, a common answer to questions about inequality and social injustice under capitalism is that these problems are outside the realm of economics, which of course means neo-classical economics, and that these are issues for sociologists to discuss. Marxism, on the other hand, sees all things in the world as being interrelated; any effect can have potentially infinite causes and any cause can have potentially infinite effects. This is important to keep in mind when one encounters a common straw man argument against Marxism, such as the claim that Marxism is “economic determinism,” or that Marxism sees class struggle as the main focal point of all human history. Marxism sees many factors influencing human society. On the other hand, class has been, via observation of history, a crucial factor in understanding inequality within society, and thus if one wants to change society in order to eliminate inequality and exploitation, Marxist theory says we must take this into account as a crucial factor. Of course, if one is not interested in changing society in such a way that deals with these problems, then class isn’t so important. Every individual who professes a political ideology insists that they want a more just society, but justice to the worker differs greatly from the justice of the owners of capital.

For the sake of argument, let us assume a position that declares the world as it is to be unjust, and in need of a significant change. From this starting point, let us now deal with the questions, “Why socialism? Why do we need revolution and why can’t we do something else?” For practical purposes this text will deal primarily with “left-wing” objections to socialism under the assumption that bearers of such arguments are at least sympathetic to ideals such as social justice and equality. However, while they really deserve to be dealt with in separate articles, we will have a look at some objections coming from the right and even the far-right. Right-wing reactionaries have a history of clothing their arguments in populist language so as to propagate their message among otherwise unsuspecting people who would never give them the time of day if they knew exactly who they were dealing with.

A word of caution – the reader should not assume that what follows is a false dichotomy insisting that Marxism is the only path out of the current crisis. Crisis is both inherent and cyclical in capitalism, and thus we can assume that the current crisis will eventually work itself out. This process may be violent, and in the end yesterday’s winners may be tomorrow’s losers, but the system will go on. It is important to understand that a system’s ability to perpetuate itself isn’t necessarily a merit; it only means that humans simply do not give up and resign control over their society. What this text argues is not simply “socialism or else,” but rather that while other solutions may have progressive and positive outcomes, so long as capitalism and its core contradictions are not dealt with these same painful effects will only return a few years down the road. Furthermore, these ad hoc solutions will not resolve some of capitalism’s cruelest effects such as starvation, war, imperialism, death due to preventable diseases, and the like. The second thing this text will not attempt to do is try to play a logical game so as to lead the reader to the idea that Marxism is “right” based on formal reason alone. If one does not see inequality or exploitation as morally wrong or at worst a necessary evil, no amount of logical arguments can convince them that socialist revolution is necessary. Logic dictates that those who stand to benefit from the system as it is are likely to defend it.

Why do we need revolution? Why can’t we fix the problem through the electoral system? You have to work within the system to make changes otherwise you’re just a dreamer who’s wasting everyone’s time.

Here we have typical arguments from lifelong supporters of the Democratic Party. They acknowledge that they too are disappointed in their hero Obama, but they warn us that things will be much worse under a Republican president. When we express our disapproval of Obama, they accuse us of being dreamers and spoiled children who are now throwing a fit because we didn’t get everything we wanted from the president. Communists find this argument somewhat amusing, seeing as how we never expected anything from Barack Obama. Communists do not see Obama in a vacuum, but rather as part of a clear and obvious rightward trend within the Democratic Party. The truth about “what Obama has done so far” is not a matter for this article. Media outlets such as the outstanding Black Agenda Report have easily cut through the excuses and lies of Obama and his party lackeys. For those pressed for time, sites like obamatheconservative.com catalogue nearly every hard right turn this supposedly “progressive” president has made, complete with sources for each item. Mainstream leftists often label Obama’s compromises with the radical right as “disappointments” at best and “betrayals” at worst. To communists on the other hand, everything is going as intended, not because these actions are part of some secret plan, but because the state is merely carrying out the very function it was designed to do. In other words, our opposition to supporting Obama has nothing to do with Obama himself; it is in fact opposition to voting for anybody. The state is designed to provide a foundation for a capitalist society, and however much “freedom” it may permit in its best moments, it will never permit the freedom to abolish capitalism and its relations of production. The system is meant to self-perpetuate, and the system inevitably favors the wealthy.

To some this might sound like political cynicism, but this is a readily observable fact throughout history. Let us first consider the remedies that liberals have offered us thus far in the endeavor to limit the influence of wealth in American society. Some demands will simply never be fulfilled. Congressmen are not going to consciously eliminate their own perks, including those which they gain from courting lobbyists both when they are in office and after they leave or retire from public service. The idea that politicians can be convinced to give up the vast privileges they gain from their relations with corporations and lobbyists simply based on an appeal to their conscience about “fairness” is simply laughable, and even more so when it comes from the mouth of an Obama supporter who chides leftists for not being realistic.

What of regulation, which will supposedly keep banks and corporations in line? Any attempt to pass such regulation through Congress will inevitably be met with a massive blitzkrieg by lobbyists, but for the sake of argument let’s say they somehow pass. What comes next? The advocates of regulation are fond of referring back to some earlier period in American history when various regulations of industry and banking still existed. The massive trend of deregulation since the 1980s is responsible for our problems, these people say. In this case we are forced to ask, if regulations can solve our economic problems, how did this deregulation take place to begin with? Perhaps more importantly, what will ensure that the new regulations won’t be overturned ten, twenty, or thirty years down the road? How can we be sure the exact same thing won’t happen again? As to why the regulations failed, we are again faced with the reality that the republican system we live under in the United States of America favors those with money, which inevitably means corporations and wealthy individuals. It cannot do otherwise. Some have suggested measures such as ending corporate personhood, but this is about as realistic as limiting or abolishing access for lobbyists. The politicians are not going to cut their own throats.

There are some on the so-called “left” who accuse us of being unrealistic, overly-cynical, and counter-productive by not working within the system. We are accused of wanting our way or no way, and that if we were really serious about change we would participate in the political process and then perhaps we would get the change we wanted, if only incrementally. First, the change we seek is radical; it is revolutionary and not a matter of reforms. Does this mean that we totally reject any participation in the political system as it is, or that we reject any reform in favor of total revolution? Absolutely not; every reform that the working class can squeeze out of the state for their benefit is a small victory. On the other hand, we will not cede massive ground to the right in exchange for a few crumbs from the table, nor will we line up to support candidates that do not represent our interests. To those who say we should stop complaining and vote “our people” into office, we may respond thusly: we would happily cast our vote for “our people,” that is candidates who represent our working class interests, but we will not vote your people into office. Moreover, if we somehow manage to find “our people” to vote for, we will reject all your attempts to blame us for the failure of your people if they should fail. You cannot accuse us of being unrealistic contrarians for not using the choices we supposedly have, and then condemn us when our choice differs from yours.

Getting to the bottom line, we must acknowledge that if we dare to say our problems stem from capitalism, as an increasingly larger segment of mainstream liberals and “leftists” are, we must set about finding a way to abolish capitalism, the root of the problem. By extension, we cannot expect to abolish capitalism via the very same state structure which serves as its foundation and defense. On this point we must agree with the anarchists who say “smash the state.” Politics can be likened to a sort of game, wherein players are permitted to make various decisions and perform actions so long as they do not violate the rules of the game. You can make many moves in chess but you cannot substitute its rules for those of another game, and you must make your moves on the chessboard. If for any reason we can achieve meaningful goals within the rules of the game, we will happily use these opportunities so long as they do not compromise our end goals. What we will not do, is accept the assumption that the game cannot be changed entirely and that we must forever struggle to achieve our gains within the confines of a system which is stacked against us.

Why can’t we fix capitalism? Can we not eliminate the negative effects of capitalism while keeping its benefits?

This is a relatively easy question, which has been somewhat answered in the previous section.  However, it is worth taking a closer look at this argument because one can propose a radical change in government without necessarily eliminating capitalism and its trappings, or as we call them, its relations of production. Here we won’t bother debunking the efficacy of reforms or regulations, but rather we will pose a question ourselves, along with a novel answer. People have been working against the ills of capitalism ever since its emergence in human society, yet to this day we still experience the same problems, oftentimes on a worse scale than before. Awareness of poverty, super-exploitation of workers in developing countries, and even modern-day slavery is higher today than it was in previous decades, but has any of this actually solved these problems? It is simply untrue that the resources necessary to solve these ills do not exist; rather it is one of capitalism’s hallmarks that resources necessary for life can be created in abundance, yet those who are in charge of their creation will not do so unless it proves profitable to them. In fact “relief” is often itself a very profitable industry, to the point that experienced relief workers often warn donors to carefully evaluate charity organizations before handing over their money. In any case, the solution to these problems lies not in increasing charity, but rather eliminating the conditions which make charity necessary.

Finally on this point, when we speak of eliminating the ills of capitalism while preserving its benefits, we would assert that this does describe socialism to an extent. We seek to create a society in which the great productive power brought into being by capitalism is put to use by the masses, for the benefit of the masses, as opposed to a minority of owners and investors. So long as these means of production are owned by a minority of individuals driven by the quest for profits, this cannot happen. Socialism is a synthesis which arises from the struggle to eliminate the contradictions inherent to capitalism, and when it triumphs, we will ultimately be left with capitalism’s benefits without its disadvantages. This may be a long, arduous process, but we have no reason to assume that it cannot be done. And if our struggle for a better, more just world never achieves our highest ideals, what does it matter so long as we strove to achieve all that we could?

The problem isn’t capitalism! We don’t live in a capitalist society! Our society is corporatist, or even socialist!

This kind of objection is as absurd as it is common in today’s discourse. It has often been propagated by Libertarians (typically followers of the Ron Paul cult), fellow admirers of the Austrian school of economics, and all manner of right-wing populists. We might ignore such absurd claims were they only espoused by such reactionaries, but because of their propensity for attempting to inject their ideas into left-wing movements, and the mainstream left’s susceptibility toward superficially radical attacks on everything “corporate,” we cannot avoid addressing such claims. Granted, this is a subject which demands its own article, and in fact many on this subject already exist. Here we will deal with it for the benefit of an audience which sees itself as left-wing or progressive, and we will do so in an abbreviated manner.

If capitalism is not the system under which we live now, then we must ask not only what capitalism is, but also when it has existed. If one asserts that it has never existed, as a few fanatical libertarians will occasionally admit under pressure, this is in itself an indictment of capitalism. Who can fault the U.S.S.R. for not achieving communism in seventy years if people have been championing the idea of capitalism for several centuries without ever having established it anywhere? But we need not concern ourselves with this rarer, ludicrous argument. Instead we will deal with the assertion that our modern system has transformed from some kind of “good” capitalism into something more grotesque. This assertion is especially troubling for those progressives and even more “radical” leftists who assert this argument, as it logically implies that there was some better time in the past, which is remarkably similar to the claims of right-wing ideologues.

The corporation, which earns so much hatred from the mainstream left, did not fall out of the sky one morning. It came into being through a natural process of capitalism’s evolution. The claim that our system is different than it was thirty, forty, or fifty years ago, regardless of who is making the argument, is based on a wholly metaphysical view of the world and in particular of capitalism. It presents capitalism as defined by a particular ideal, and then asserts that if reality should differ from this ideal, then reality must then be something other than capitalism. This way of thinking does not allow one to see capitalism as a system which went through changes from its inception to the present day. It is essential to deal with capitalism as it exists today, and as it has existed hitherto, as opposed to some abstract ideal.

In limiting our objections to this argument only as it is asserted by “leftists” as opposed to reactionary free market fanatics, then we find that we have come full circle back to the idea of “fixing capitalism.” To attack corporations and champion small and local business amounts to attacking the weeds without pulling up the roots. Again, these corporations did not fall from the sky one day, fully formed. To deny the connection between small businesses and multi-national corporations is akin to an economic Intelligent Design theory, as though the latter were once called into existence as they appear today. Even small local businesses will put their money into banks which will loan it out all over the country, if not the world. Communists seek not to cut the weeds of capitalism, but rather to uproot it entirely.

Can’t we subvert capitalism by changing our lifestyle and choices as consumers?

From the counter-cultural revolution of the 1960’s and 70’s emerged an idea which began as a bastardization of Marxist thought, one that has recently gained popularity again, stripped of any hint of Marxism whatsoever. The gist of this idea goes like this: capitalists and by extension the capitalist system itself are compelled to sell their products in the market, and thus must ensure that consumers will continue to spend money on an ever-increasing array of products. Many of these products are not necessary to human life, and some wholly unnecessary, making it essential to somehow convince people they need such products. The conclusion of these observations is that capitalism requires conformity in order to survive. Via aggressive and seemingly omnipresent advertising, people are encouraged to follow trends and buy what other people are buying. This leads to the rise of what is generally termed “consumerism,” a lust for ever more material goods that always seems to afflict other people, as opposed to the person decrying it.

From this argument it follows that this system can be subverted via a revolt against consumerism, and in particular, the “jamming” of cultural messages which promote this lifestyle, namely advertisements. We allege that these theories are nothing but idealistic nonsense, wholly divorced from even a superficial analysis of how capitalism works. Capitalism does not require that people act alike and have the same tastes; on the contrary, it thrives when people seek to express their individuality via their lifestyle and purchases. There will always be a capitalist willing to fulfill some desire so long as there is profit to be had. Decades of counter-cultural rebellion have failed to put a dent in the capitalist machine, and there is no reason to believe that “fair trade” products, defaced advertisements, and the occasional street rave will succeed at overthrowing capitalism in the future. Moreover, making the struggle against capitalism a matter of purchases is little more than funneling money from big capitalists to small or medium-sized capitalists.

Aren’t you reducing everything down to economics? What about feminism, the struggle for people of color, and so on?

Marxists fight for an egalitarian society which means we fight against racism, xenophobia, bigotry, sexism, homophobia, and all other social ills which create division and conflict within the working class. Despite this, we are still continually accused of reducing all matters to economics or class struggle, which is a woefully bad interpretation of Marxist theory. This accusation comes from a variety of directions but occasionally it is voiced by some die-hard followers of certain identity politics movements. Some, but by no means all or even a majority, put the struggle of their particular group above all others. History has shown identity politics to be largely a failure when it comes to achieving equality, much less overthrowing capitalism and its systematic division and oppression of people based on ethnicity, gender, sex, and so on. While many recognize the role of class in the oppression of their particular group, there are those who prefer to spend their time bickering over redefinitions of what it means to be a part of this or that group, who is more oppressed and how, and tit-for-tat arguments about who is “co-opting” their movement.

Marxists on the other hand recognize a historically observable fact that oppression of women, ideas of race, caste systems, and other forms of systematic oppression are very much rooted in class society. They all serve the purpose of maintaining, in one form or another, a system whereby one class exploits another. We may liken class society to a disease, and things like sexism, racism, and so on represent symptoms of that disease. History has shown that struggles for civil rights and the liberation of women have often failed because they focused on symptoms without having any kind of historical material analysis of that which they were struggling against. In many cases, this often led dedicated fighters into alliances with their class enemies, all in the name of liberation for a particular repressed group. The promised liberation has yet to come. Marxists do not reduce every issue down to class struggle, but if we are analyzing two particular subjects, specifically the history of human society and formulating a way to build a better one, we see that class plays a major role in relation to both.

Of course this should not be taken to mean that problems like racism or patriarchy will simply disappear once the capitalist class is overthrown. Some forms of oppression are quite old; patriarchy, in particular, dates back to the dawn of class-based society.  And while a struggle must be waged during and after the revolution to right these wrongs, one thing is clear- we simply cannot ultimately triumph over these social ills until we overthrow that system and its ruling class which has a vested interest in maintaining a complex society of privileges designed to divide the exploited class and incite them against one another.  This having been said, Marxists have an obligation to set the standard for the kind of society they wish to live in by waging the day-to-day struggle against forms of oppression such as racism and patriarchy both inside and outside of their organizations and parties.  Those who feel that this question can be put off till  “after the revolution” are shirking their responsibility and not setting a good example of what could be possible once the system of class-based organization is overthrown.

The Nordic model is the only model that actually works. ‘Duh,’ says Sweden

13 Apr

Satellite

By 

An article was published recently in The Independent looking at the Nordic model in Sweden. The journalist, Joan Smith, took a ride in a squad car to see how a model wherein the buyer is criminalized and the prostitute is decriminalized actually worked. What she found will likely be met, by any progressive, intelligent, feminist person, with a resounding “Duh.”

Of course the cries of “uptight!” “freedom!” “choice!” “meandmydick!” will likely continue, regardless of facts, because North Americans have their hearts set on buying into ridiculous and illogical notions of liberty that imagine sex and SUVs to be some kind of human right. But here’s how it actually works:

Smith and the squad car pull up to a car park at the top of a hill where johns tend to go with prostitutes. She writes:

What happens next is a textbook example of the way Sweden’s law banning the purchase of sex works in practice. The driver of the car, who’s brought a prostituted woman to the island to have sex, is arrested on the spot. He’s given a choice: admit the offense and pay a fine, based on income, or go to court and risk publicity. The woman, who hasn’t broken any law, is offered help from social services if she wants to leave prostitution. Otherwise, she’s allowed to go.

So, dude pays a fine and the woman is offered alternatives without pressure. OPPRESSION!

It’s so obvious it makes your head spin. Some of the most progressive, egalitarian countries in the world have adopted this model and it’s working. Meanwhile, those who’ve opted for legalization or those like Canada and the U.S. who continue to treat prostituted women like criminals while offering them few alternatives, flail.

Julie Bindel points out that the only thing the Dutch government’s 12 year experiment with legalization succeeded in doing was to increase the market. The illusory labour-based approach, put forth by confused lefties, wherein prostitution is imagined to be “a job like any other” hasn’t worked either:

Rather than be given rights in the ‘workplace’, the prostitutes have found the pimps are as brutal as ever. The government-funded union set up to protect them has been shunned by the vast majority of prostitutes, who remain too scared to complain.

Under the “labour” model, assault and rape is no longer violence against women, but “an ‘occupational hazard’, like a stone dropped on a builder’s toe,” Bindel writes. There’s simply no reason for police to charge men for doing something they feel they are legally entitled to do. Without reeducation and training, which is a key aspect of the Nordic model, the police are unlikely to change their attitudes towards marginalized women, prostituted women, and, more generally, with regard to women’s human rights.

Those who argue that prostitution is dangerous due to “stigma” turned out to be wrong too, as Bindel reports: “Only 5 per cent of the women registered for taxation, because no one wants to be known as a whore — however legal it may be.” The stigma remains, as does the exploitation.

In 2009, the police had to shut down a large number of brothels in Amsterdam’s red-light districts due to organized crime having taken over.

Under legalization, trafficking increased, organized crime moved in, and women have continued to be abused and degraded. Is this the “liberation” we’re looking for?

Talking about sex work as work doesn’t help women. It doesn’t help women leave the industry, it doesn’t create gender equality, it doesn’t stop the violence, and it doesn’t destigmatize prostitution. Reframing legalization as ending the “stigma” has not only been shown to be untrue, but it distracts us from the reality that violence and inequality doesn’t happen because of stigmatization — it happens because of male power and systemic injustice.

Detective Superintendent Kajsa Wahlberg, Sweden’s national rapporteur on trafficking in human beings, is quoted as saying: “The problem is gender-specific. Men buy women.” Which is why a feminist approach is needed. And, as of yet, the only legislation that is specifically feminist in nature is the Nordic model.

Smith writes that prostituted women who come to Sweden from the Baltic states or Africa, who have sold sex in other countries say “they’re much more likely to be subjected to violence in countries where prostitution has been legalized.”

Men in Sweden, on the other hand, are afraid to commit violence because they know the women they are buying sex from have more power in the situation than they do. They know they will be charged if the woman calls the cops and so they behave better.

Crime statistics show that trafficking has decreased since the Nordic model was enacted in Sweden. Places like Victoria (Australia), where prostitution has been legalized since the 80s, adopted the model in order to “contain the rampant growth of the highly visible brothel and street prostitution trade, eliminate organized crime, to end child prostitution and sex trafficking, and eliminate harmful work practices.” Instead, what’s happened is that “Victoria has created a two-tiered system—a regulated and an unregulated prostitution industry.” There are minimal exit programs for women who want to leave the industry (perhaps a moot point for legalization advocates, as the whole idea of exiting services seems to exist in opposition of the “job like any other” mantra — because what other, just, you know, “jobs” require therapy and exiting services in order to quit? The military, perhaps?), illegal brothels are rampant and trafficking has increased.

These facts fly in the face of the argument that criminalizing buyers will drive the industry underground. It seems that, in fact, legalization encourages the “underground” (illegal) industry. It’s no coincidence that those who wish to operate illegally or as part of a “black market” flock to countries where prostitution is legal.

There is, in fact, zero evidence that shows that criminalizing johns has driven prostitution underground. Under the Nordic model, there’s also absolutely no reason why, if prostitution is “underground” the cops wouldn’t be able to find these industries: “If a sex buyer can find a prostituted woman in a hotel or apartment, the police can do it,” one of the detectives Smith interviews says, “Pimps have to advertise.” Because the police have the resources and a vested interest in charging the exploiters, they have reason (and the support) to look for them.

In South Auckland, NZ, where prostitution has been legal (fully decriminalized, meaning that running a brothel, living off the proceeds of someone else’s prostitution, and street solicitation are all legal — which is what some are advocating for in Canada) since 2003, street prostitution has increased dramatically and recent reports show child prostitution is on the rise. Just like in Victoria and Amsterdam, illegal prostitution has increased.

In contrast, since the Nordic model has been in effect in Sweden since 1999, street prostitution, organized crime, trafficking, and pimping have decreased. The country also has strong social safety nets and exiting programs for women who want to leave the industry.

In a recent debate about the legalization of prostitution, hosted by New Internationalist Magazine, human rights lawyer, Diane Post begins her argument by saying:

Legalized prostitution cannot exist alongside the true equality of women. The idea that one group of women should be available for men’s sexual access is founded on structural inequality by gender, class and race.

As far as equality goes, there’s no argument here and we need to stop pretending there is. Prostitution doesn’t promote the status of women. Societies and countries that have been shown to be progressive, egalitarian, and “sex positive” (like Iceland, a place that has a much more open-minded and “liberal” approach to sex and sexuality than the U.S.) are also societies that have adopted legislation that works towards an eventual end to prostitution, supporting the women who are in it in the meantime, and teaching men that buying sex isn’t acceptable. It’s no strange coincidence that Iceland, which ranked first place in the 2012 Global Gender Gap Report, has also banned strip clubs, is considering a ban on hardcore pornography online, and has adopted the Nordic model.

The argument for the legalization of prostitution is largely about individual rights. But we do, sometimes, have to choose between prioritizing the rights of certain individuals and building an equitable society.

The popular position among some American feminists and progressives is to pretend as though prostitution is simply something open-minded people do “on the side” for kicks. This is to pretend gender, race and poverty don’t factor in. But prostitution isn’t merely a “zoning” issue. It isn’t, either, about fashion. To these people, I point you to commentary from Margriet van der Linden, chief editor of the feminist magazine, Opzij, who said, in left-liberal daily De Volkskrant:

The daily practices of prostitution are portrayed as a romantic world full of mistresses with fishnet stockings and jovial laughs who embody the liberal values of the Dutch, and complaints ring out about the spread of narrow-minded bourgeois values. But not a word is said about the current legislation that has been such a disaster and has contributed to the shocking figures according to which approximately seven in ten prostitutes are victims of violence.

Prostitution hurts some individual women and benefits some individual men. But it is also part of, as lawyer, Gunilla Ekberg says, “a structure reflecting and maintaining inequality between men and women.”

Post points out that “the answer to poor jobs, low pay and harsh working conditions for women is not to consign them to a lifetime of abuse.”

“There is no alternative,” is, after all, what conservative British Prime Minister, Margaret Thatcher said. The response from the left has always been that, indeed, there is an alternative, and we’re going to fight for it.

Source

Guess What? The Debt Everyone Is Freaking Out About Does Not Exist

28 Feb

By Jeff Spross

What nobody talks about.

Between the new-and-improved Simpson-Bowles plan, Joe Scarborough’s feud with Paul Krugman, the relentless drumbeat of the entire Republican Party, and the media blitzkrieg launched by the billionaire-driven “Fix the Debt” campaign, one might think no serious and responsible American can ignore the unassailable truth: America faces a debt crisis, which we must act on immediately and decisively.

Well, not quite. The actual truth is that the debt everyone’s freaking out about does not exist.

Some of the debt certainly exists, like the roughly $11.6 trillion owed to foreign and private creditors. But that isn’t the debt anyone’s worried about. If we stopped adding to it tomorrow, the debt as it stands would pose essentially zero threat to the country’s fiscal health, as the ongoing growth of the economy would send our debt-to-GDP ratio dropping like a rock.

So the debt that’s got everyone worried is the part we haven’t yet incurred. And that debt, by definition, does not exist. It’s not a certainty, it’s merely a projection by the Congressional Budget Office. And trying to model how the federal budget, not to mention the entire American economy, will behave years or even decades in the future is a devilishly treacherous business.

For instance: one of Rep. Paul Ryan’s (R-WI) favorite talking points in 2011 was that the computer simulations CBO uses to model the economy crash when they attempt to account for the debt load in 2037. Imagine trying to model the 2011 economy in 1985. Things you’d never see coming include (among other things) the Internet, fracking, massive advances in computing power, the renewable energy boom, three wars, a massive recession, and Harry Potter. And predictions can be hard even over shorter time frames. In 1995, CBO predicted the deficit in 2000 would be well over $200 billion. We ran a surplus of $236 billion.

In fact, Ryan plastered dramatic graphs of debt going out 75 years onto everything insight while stumping for his last budget. Forget predicting 2011 in 1985. That’s like predicting 2011 in 1940.

So neither the impending Baby Boomer retirement nor growing health care costs make astronomical debt a certainty, despite the insistence of the conservative and centrist punditariat. With respect to the Boomers, economist Dean Baker ran the numbers and found that if productivity growth in the economy clocks in at one percent until 2035 (avery conservative estimate) the resulting gains will swamp the added retiree burden.

As for health care cost growth, it’s perhaps the best example available to explain why the debt doesn’t actually exist. The Congressional Budget Office (CBO) projects, based on current trends, that excess cost growth will become the lead driver of Medicare and Medicaid spending by 2037 — the primary cause of our long-term debt, and the thing that keeps budget hawks up at night. But if you look at CBO’s fine print (page 60, if you’re interested) their complex formula for making this projection essentially boils down to looking at past trends in health care costs and assuming they’ll be similar going forward.

The catch? The entire purpose of health care reform, whether we keep Obamacare or get Ryan’s preferred replacement, is to change those trends by changing the structure of health care markets — how we buy, sell, and deliver care. That should slow health care cost growth, making it less expensive for the government to pay for health care through Medicare and Medicaid.

But CBO really doesn’t have the tools to model those kinds of structural changes. Its analyses are generally limited to hard spending cuts or revenue increases. CBO Director Doug Elmendorf told Ryan as much during a hearing, which Ryan took to mean his premium-support scheme for Medicare might work better than CBO estimated. But the point applies equally to Obamacare’s reforms, for example.

In other words, the general assumption within the Beltway — that we’ll write legislation, the CBO will tell us it solves the problem, then we’ll pass it and the problem will be solved — gets it backwards. The central debt problem of growing health care costs is something CBO probably can’t tell us whether we’ve solved until we’ve already solved it. Case in point: CBO just significantly downgraded its projections for Medicare and Medicaid spending over the next decade, precisely because growth in health care costs has unexpectedly slowed to a 50-year low since 2009. A big part of the slowdown is the recession, and so probably temporary, but lots of economists think a big part is also durable, structural change to health care markets. We probably have Obamacare to thank for that.

It should be said that this situation certainly isn’t CBO fault. They’re a sober organization well aware of their own limits, and regularly try to remind us (page 59) that even without policy changes, “actual spending for health care could be much lower or much higher than the figures contained in CBO’s and other analysts’ projections.” We just never pay attention. And as a consequence, we’re currently obsessing over a problem that might not exist.

But doesn’t uncertainty cut both ways? Like CBO said, spending could be much higher in the future — suppose, for example, we fight a war with Iran. That sort of unpredictable policy shift could make the future debt even bigger than CBO currently projects.

Well, it’s not all that clear that’d be bad: contrary to popular belief, there’s no magicdebt-to-GDP ratio that would trigger an economic crisis. JapanBritain, and France have all carried far larger debt burdens than ours for extended periods of time without calamity arriving. America’s own borrowing costs are lower now than in the 90s, despite lower debt then. And because we control our own currency, it’s not even clear that the United States could ever suffer a debt-induced economic collapse. We could eventually run ourselves into high inflation, presumably, but we have more than enough room to maneuver there as well.

By fixating on a problem that may or may not exist, Washington has trapped policymaking in a weird, postmodern dilemma. We’ve declared there’s a crisis because we’ve produced a hypothetical number, tethered to reality only by a host of assumptions and guesswork about what will happen in the next several decades. Then we insist this “crisis” isn’t “solved” until we’ve made policy changes that shift the math designed to spit out said hypothetical number. Policymaking becomes less about solving concrete problems (more on that in a bit) and more about made-up numbers on an Excel spreadsheet.

This choice to prioritize a phantom number over real-world evidence has consequences. In a depression, spending cuts suck demand out of the economy, leading to slower growth. Remember: the denominator counts as much as the numerator in the debt-to-GDP ratio. Europe has so far pursued austerity with markedly more enthusiasm than the United States, and its economic performance predictably tanked as a result. Spain and France are anticipated to miss their latest debt-cutting targets, and the Continent as a whole will probably not see renewed economic growth for another year.

Both in Europe and here in America, we have tax codes that by their nature bring in less revenue when the economy goes into a downturn, and a series of safety net programs designed to ramp up when unemployment rises. The vast majority of the deficits we’ve seen since President Obama took office were due to the 2008 collapse. Under depression conditions, deficits are a feature, not a bug.

Yet we’ve already cut non-defense discretionary spending to 40-year lows, endangering all sorts of investments in America’s infrastructure, health, safety, communities, and future productivity. And that’s before the sequester kicks in. This massive failure to invest or aid saps the economy’s skills, education, networks, and future prospects. The longer unemployment and stagnation drags on, the more damage we do to Americans’ abilities to prosper, and the less we’ll be able to grow the denominator over the coming years.

Refusing to tackle that all-too-real crisis with the full range of economic resources at our disposal is a shameful moral and political failure. Especially when the reason we’re refusing is fear of shadows cast on the wall.

Source

Leave it to the Market?

13 Feb

Leaveittothemarket0

For more than twenty years now, the “free market” has been the rallying cry of American politics. Conservatives sing its praises while occasionally betraying it when it suits their constituency, liberals won’t criticize it but claim that it needs to be fixed, and then you have the libertarians, for which the market is, for all intents and purposes, a stand-in for God. Like many other words often heard in politics such as “liberty” or “democracy,” the “free market” has been used so frequently that it is rarely ever questioned. This concept of a “free market” is accepted as something real; the only disagreements arise when people discuss what constitutes a violation of free market principles, or in other words, what actions fetter the market to the point where it can no longer be called “free?” All the loudest voices in American politics tell us that one way or another the market will solve our problems, either with prudent regulation by the state or by leaving it completely unfettered by government interference. What you will not hear, at least in the mainstream discourse, is that the market itself, or more correctly its dominance of our society and our entire way of life, is the real root of the problem facing human society.

Before tackling the market and its influence over human society, one point should be clarified. This article will deal primarily with the arguments of neo-liberals and libertarians as opposed to modern liberals. Since liberals do not openly preach the virtues and supremacy of the free market, choosing instead to insist that market excesses can be limited, fixed, or altogether prevented by wise government regulation, their arguments fall outside the scope of this article. There are plenty of arguments to explain why the regulation proposed by liberals will either not succeed or will not have a lasting, much less permanent impact, the strongest being the fact that liberals themselves often point to the regulation and government intervention of past decades to support their own arguments. It stands to reason that if past regulations could be repealed over time thanks to successful lobbying on the part of wealthy corporations and businesses, the same thing could happen again five, ten, or maybe twenty years after the passing of new regulatory laws in some hypothetical future. And of course, this also assumes that these regulations would even pass through the political system at all. In any case, the liberal solution of correcting the market via limited government intervention is a topic for another article. This article shall deal specifically with the arguments of those who exalt the market the most, namely, the libertarians.

Libertarianism has a long history in the United States and a few other privileged countries, all of which, incidentally, achieved their economic greatness by doing more or less the exact opposite of what libertarians believe in. While the Libertarian Party has existed since 1971, the ideology seems to have gained widespread mainstream attention with the presidential campaigns of Representative Ron Paul and his “Ron Paul Revolution,” which has effectively utilized the internet to bring his message to a wider audience. It is amusing to note that the internet, which has its roots in government-sponsored research, serves as the basis for the success of Ron Paul’s movement. Ironic though that may be, no objective observer can deny that Paul’s populist message has gained considerable success among many segments of the population who should otherwise be politically opposed to one another. This fact speaks to two fundamental truths about American politics. The first is that populist messages, which are specifically designed to appeal to a broad spectrum of political belief systems, are highly potent. The second is that widespread dissatisfaction with the mainstream political system and the usual politics of our two-party system has left many people wide open to such populist messages, and it would do well for many of them to dig a little deeper into the ideology espoused by Ron Paul and his ilk. While Paul sets himself up as a hero of the so-called “middle class” against the powerful elite represented by the mainstream candidates of both parties, he is in fact nothing more than an agent of the wealthiest segment of the American ruling class. While Ron Paul and his supporters claim that they oppose corporate power over the United States, the ultimate result of his libertarian rhetoric is the preservation of that very same power.

Of course stating this inevitably causes outrage among Paul’s cultist-like supporters. Many Ron Paul supporters, and in particular the disturbingly large amount of confused “leftists,” insist that they oppose large corporations. In fact they insist that our system is not “real capitalism” and hasn’t been for some time; they say it is “crony capitalism” or “corporatism.” In the past the Red Phoenix has dealt with this question of “real capitalism” vs. “crony capitalism,” and suffice to say that asking people who make this claim to clarify just when the American system was “real capitalism” can provoke some really ridiculous answers, if any answer at all. Here, however, we shall look at one aspect of libertarian ideology, namely the claim that libertarianism opposes corporate power. We shall see that the solution to this problem, like the libertarian solution to every problem, is to leave everything to the market to decide. Lastly, we will see why this non-solution, assuming it actually could be implemented, would only lead to literal corporate tyranny with no democratic accountability.

Many of Ron Paul’s supporters, particularly those lured from the left, are unaware of his ideological background. As it turns out, in the political realm what you don’t know can in fact hurt you. Paul’s economic and social theories are inspired primarily by the so-called Austrian School of economics, so named for the nationality of its original founders and adherents such as Karl Menger, Eugene Bohm-Bauwerk, Ludwig von Mises, and Friedrich Hayek. This article is no place to delve into the myriad of problems with Austrian economic theory, so we shall focus rather on the modern arguments advanced by populists such as Ron Paul when it comes to the market and our current system.

The Austrians were not the first to propose that the market reconciles the self-interest of individuals for the better of society; this idea can be traced to Adam Smith’s idea of the “invisible hand” which would promote the general welfare even though individuals in the market would be acting out of self-interest. There are a few key differences between this classical view and that of Austrian Schoolers, however. The first is that adherents to Austrian School economics, and indeed virtually all libertarians in general, express no concern over whether market activity promotes a better society; society does not matter, only individuals. Secondly, Austrian school supporters see the market as the only reliable source of information which can be used by individuals to allocate scarce resources in the most efficient way. In other words, without the market, which labels commodities with prices, it would be impossible for investors to know the best avenues for investing their capital. Hence it is necessary to leave the market alone so as not to cause any distortions which might lead bad investments. It is obvious that this theory contradicts those in favor of a planned economy, and indeed Austrian School theorists such as Bohm-Bauwerk, Hayek, and von Mises all received great praise for their attempts to “refute” Marxist theory. In fact, while the Austrian School is generally rejected even by mainstream neo-liberal economists, they just happen to more or less agree on the idea that socialist planning will always be inherently flawed. Even the most ridiculous ideas will find their proponents if they serve the status quo, and that is the main reason why people like Ron Paul still have a job.

According to libertarians like Ron Paul and his supporters, government regulation and intervention are to blame for “too-big-to-fail” banks and the consolidation of power into the hands of a small group of multi-national companies. The market, left to its own devices, would supposedly prevent the rise of such mega-corporations, which we are told received their power via government aid on their behalf, including stifling regulations which supposedly bar potential competitors from entering the market. In fact, whatever the issue, you can rest assured that to the libertarian, the culprit is always “government,” and the answer is always the free market. If one wants to try to get a handle on what libertarian society would actually look like, it is necessary to dig into these concepts a little deeper.

First, there is no disputing the claim corporations and private companies have benefitted from government largesse, and this certainly does benefit the largest multinational corporations. Businesses lobby the government, back electoral campaigns, and in return they receive deregulation legislation, subsidies, favorable trade deals and other perks. Libertarians tell us they are against this unholy marriage of the private and state sector, but there are a number of flaws with their understanding of this relationship.

According to libertarians, large corporations use their lobbying power to support stifling regulations which will bar potential competitors from entering the market. In other words, if it weren’t for mean old Monsanto and their lobbying efforts, you’d have all kinds of mom and pop chemical producers popping up all over the country to engage in healthy capitalist competition and prevent the rise of monopolies. Now some people might suggest, for example, that one reason it’s difficult to start your own airline is because airplanes are expensive to buy and operate. This would be wrong however; the market decides the price of airplanes, spare parts, and so on, ergo it is fair and just. Government regulation is the problem!

The problems with this claim are so manifold it’s difficult to decide where to begin. Perhaps the most glaring flaw is the idea that corporate lobbyists support regulatory legislation. In almost all cases the opposite is true; corporations lobby to eliminate, not implement, government regulation in their various spheres. The second most obvious error is the implication that if we could somehow roll back our current system to that non-existent form which libertarians insist is “true capitalism,” successful capitalists wouldn’t use their wealth to influence the remnants of the state to their favor. We’re supposed to believe that the new generation of capitalists, without any restriction whatsoever, will all play fair and not try to gain any unfair advantage by lobbying the government for benefits such as tax breaks or subsidies. The very idea is laughable, but it is by no means the most serious logical flaw this ideology has to offer.

We must at some point in the debate ask, “What is the market?” The market, in abstract, is an institution where exchange and distribution take place. In concrete terms, however, the market consists of people, that is to say individual buyers and sellers. This condition, where individuals confront each other in the market for the purpose of exchange, and more importantly the dominance of this institution in the case of capitalist society, forms the basis for the liberal cult of the “individual,” but this is a matter for another article. Here it is enough to say that in theory, buyers and sellers enjoy formal equality. This is where the problem lies, for while buyers and sellers are formally equal, they are unequal according to their possessions, that is to say they differ according to how much and what kind of property they own, what they have to sell, and how much money they have. Since distribution is determined by market transactions, agents must enter and participate in market exchange to get their necessities of life. To engage in exchange, agents need money, and in order to get money they must have a commodity they can sell. The worker’s commodity is labor power, the capacity to perform productive labor. Again, in theory, the worker and capitalist are allegedly on an equal footing when they confront each other in the market. Outside of the realm of economic theory, we can easily see this isn’t the case. Capitalists own capital, that is both money capital and means of production, hence in the market they hold all the cards. Since workers don’t possess necessary property, that is means of production, to produce everything they need to survive, they do not have the choice of withholding their labor power from the capitalists; starvation would be the result.

Once we step out of the realm of ruling-class economic theory and into the real world, we understand that “leaving it to the market” doesn’t mean leaving our fate to some abstract institution but rather putting it in the hands of a few real, live people, and hoping they will somehow arrive at the best, most beneficial results for all of society out of their own self-interest. In other words, it’s not that far removed from the libertarians’ inaccurate description of socialism, only replace government with private capitalists.

Worse still, libertarians exalt the individual and openly declare that they do not care about society, nor the “greater good,” indeed some have routinely and openly insisted that society doesn’t exist. That should give one pause any time a libertarian evangelist insists that their way of thinking would be best for “our nation.” Try as they might, however, libertarians cannot bend material reality. While their worldview divides human civilization into the “state” and “private sector” and holds as sacred the concept of “private property,” in the real world there can be no private property without the state and its organs of violence with which it enforces the existing property relations. If we look back into history we see that the rise of the very first state coincides with the emerging necessity to establish and enforce property rights, and as these rights and relations changed over time, so too has the state.

Ron Paul and his populist goons are selling a chimerical Utopian vision which runs contrary to the historical record. While his supporters will claim that our contemporary system isn’t “real capitalism,” they aren’t so forthcoming when asked to say when this “real capitalism” allegedly existed. When they attempt to do so, it is only a matter of pointing out the atrocious living conditions of the majority of people, crushing restrictions on civil rights, poor quality products, and of course the ever-present government intervention in the economy, if not in the form of regulation but rather protectionism, subsidies, and other handouts. Whenever they insist that we had a truly “free market” at some time in the past, ask for specifics, do a little research, and you’ll find that the market had restrictions on it then. In fact as Ha Joon Chang so eloquently pointed out in his book 23 Things They Don’t Tell You About Capitalism, there is no such thing as a free market, and never has been. More importantly, there has never been a single country in world history which has followed Austrian School economic theories to economic prosperity, if at all; anyone who tells you otherwise is either blatantly lying or simply ignorant. Support for Ron Paul is ultimately support for the ruling class, only by another route. Do not be fooled by populist hucksters who promise to explain the world in bite-sized nuggets of bumper-sticker “common sense.” If Ron Paul truly believed in his principles he wouldn’t work for the federal government, and that goes doubly if he were truly a threat to the working class. Paul may seem a world apart from Obama or Romney, but he exists to lead us to the very same destination.

The Austrian School of economics is a complicated subject. Though it is generally rejected by all mainstream schools of economic thought, the latter more or less agree with the former on some key concepts, such as the concept of marginal utility. With this in mind, the reader is invited to look into the matter further with a number of critiques of Austrian theory from several different perspectives, including Marxist and mainstream.

Further Reading

http://rationalwiki.org/wiki/Austrian_School

http://world.std.com/~mhuben/austrian.html

https://critiqueofcrisistheory.wordpress.com/responses-to-readers-austrian-economics-versus-marxism/

http://kapitalism101.wordpress.com/2011/11/15/law-of-value-8-subjectobject/

http://www.marxists.org/archive/bukharin/works/1927/leisure-economics/index.htm

World’s 100 richest earned enough in 2012 to end global poverty 4 times over

27 Jan
AFP Photo / Ahmad Al-Rubaye

AFP Photo / Ahmad Al-Rubaye

The world’s 100 richest people earned a stunning total of $240 billion in 2012 – enough money to end extreme poverty worldwide four times over, Oxfam has revealed, adding that the global economic crisis is further enriching the super-rich.

“The richest 1 percent has increased its income by 60 percent in the last 20 years with the financial crisis accelerating rather than slowing the process,” while the income of the top 0.01 percent has seen even greater growth, a new Oxfam report said.

For example, the luxury goods market has seen double-digit growth every year since the crisis hit, the report stated. And while the world’s 100 richest people earned $240 billion last year, people in ”extreme poverty” lived on less than $1.25 a day.

Oxfam is a leading international philanthropy organization. Its new report, ‘The Cost of Inequality: How Wealth and Income Extremes Hurt us All,’ argues that the extreme concentration of wealth actually hinders the world’s ability to reduce poverty.

The report was published before the World Economic Forum in Davos next week, and calls on world leaders to “end extreme wealth by 2025, and reverse the rapid increase in inequality seen in the majority of countries in the last 20 years.”

Oxfam’s report argues that extreme wealth is unethical, economically inefficient, politically corrosive, socially divisive and environmentally destructive.

The report proposes a new global deal to world leaders to curb extreme poverty to 1990s levels by:

- closing tax havens, yielding $189bn in additional tax revenues

- reversing regressive forms of taxation

- introducing a global minimum corporation tax rate

- boosting wages proportional to capital returns

- increasing investment in free public services

The problem is a global one, Oxfam said: ”In the UK inequality is rapidly returning to levels not seen since the time of Charles Dickens. In China the top 10 percent now take home nearly 60 percent of the income. Chinese inequality levels are now similar to those in South Africa, which is now the most unequal country on Earth and significantly more [inequality] than at the end of apartheid.”

In the US, the richest 1 percent’s share of income has doubled since 1980 from 10 to 20 percent, according to the report. For the top 0.01 percent, their share of national income quadrupled, reaching levels never seen before.

“We can no longer pretend that the creation of wealth for a few will inevitably benefit the many – too often the reverse is true,” Executive Director of Oxfam International Jeremy Hobbs said.

Hobbs explained that concentration of wealth in the hands of the top few minimizes economic activity, making it harder for others to participate: “From tax havens to weak employment laws, the richest benefit from a global economic system which is rigged in their favor.”

The report highlights that even politics has become controlled by the super-wealthy, which leads to policies“benefitting the richest few and not the poor majority, even in democracies.”

“It is time our leaders reformed the system so that it works in the interests of the whole of humanity rather than a global elite,” the report said.

The four-day World Economic Forum will be held in Davos starting next Wednesday. World financial leaders will gather for an annual meeting that will focus on reviving the global economy, the eurozone crisis and the conflicts in Syria and Mali.

Source

Unemployed far outnumber job openings in every sector

24 Jan

The figure below shows the number of unemployed workers and the number of job openings by sector. Unemployed workers far outnumber job openings in every sector, underscoring the fact that the main cause of today’s persistent high unemployment is a broad-based lack of demand for workers—and not, as is often claimed, available workers lacking the skills needed for the sectors with job openings.

LAST WEEK’S SNAPSHOT: Unemployment rates by educational attainment

Construction is the sector with the most unemployed workers for every available job, while manufacturing has the second-most number of unemployed workers for every available job, belying recent claims of worker shortages in construction and manufacturing. The education and health services sector has the most favorable ratio of unemployed to job openings, but even it has over 80 percent more unemployed workers than job openings. These data show that the main problem in today’s labor market is not a lack of the right workers for the jobs that are available; it’s that employers do not have enough work to be done to need to hire more workers.

downloadSource

 

The War on Mali. What you Should Know: An Eldorado of Uranium, Gold, Petroleum, Strategic Minerals …

19 Jan

mali1By R. Teichman

The French government has stated that:

“it would send 2,500 troops to support Malian government soldiers in the conflict against Islamist rebels. France has already deployed around 750 troops to Mali, and French carriers arrived in Bamako on Tuesday morning…..

We will continue the deployment of forces on the ground and in the air…..

We have one goal. To ensure that when we leave, when we end our intervention, Mali is safe, has legitimate authorities, an electoral process and there are no more terrorists threatening its territory.” [1]

So this is the official narrative of France and those who support it. And of course this is what is widely reported by the mainstrem media.

France is supported by other NATO members. US Defense Secretary Leon Panetta confirmed that the US was providing intelligence to French forces in Mali. [2]  Canada, Belgium, Denmark and Germany have also publicly backed the French incursion, pledging logistical support in the crackdown on the rebels. [3]

If we are to believe this narrative we are misled again about the real reasons. A look at Mali’s natural resources reveals what this is really about.

Mali’s natural resources  [4] (emphasis added)

mali

Gold: Mali: Africa’s third largest gold producer with large scale exploration ongoing. Mali has been famous for its gold since the days of the great Malian empire and the pilgrimage to Mecca of the Emperor Kankou Moussa in 1324, on his caravan he carried more than 8 tonnes of gold! Mali has therefore been traditionally a mining country for over half a millennium.

Mali currently has seven operating gold mines which include: Kalana and Morila in Southern Mali, Yatela, Sadiola and Loulo in Western Mali, and mines which have recently restarted production notably Syama and Tabakoto. Advanced gold exploration projects include: Kofi, Kodieran, Gounkoto, Komana, Banankoro, Kobada and Nampala.

Uranium: encouraging signs and exploration in full swing. Exploration is currently being carried out by several companies with clear indications of deposits of uranium in Mali. Uranium potential is located in the Falea area which covers 150 km² of the Falea- North Guinea basin, a Neoproterozoic sedimentary basin marked by significant radiometric anomalies. Uranium potential in Falea is thought to be 5000 tonnes. The Kidal Project, in the north eastern part of Mali, with an area of 19,930 km2, the project covers a large crystalline geological province known as L’Adrar Des Iforas. Uranium potential in the Samit deposit, Gao region alone is thought to be 200 tonnes.

Diamonds: Mali has potential to develop its diamond exploration: in the Kayes administrative region (Mining region 1), thirty (30) kimberlitic pipes have been discovered of which eight are show traces of diamonds. Some eight small diamonds have been picked in the Sikasso administrative region (southern Mali).

Precious stones consist of the following and can be found in:

  • Circle of Nioro and Bafoulabe: Garnets and rare magnetic minerals
  • Circle of Bougouni and Faleme Basin: Pegmatite minerals
  • Le Gourma – garnet and corindons
  • L’Adrar des Ilforas – pegmatite and metamorphosing minerals
  • Hombori Douentza Zone: quartz and carbonates

Iron Ore, Bauxite and Manganese: significant resources present in Mali but still unexploited. Mali has according to estimates more than 2 million tonnes of potential iron ore reserves located in the areas of Djidian-Kenieba, Diamou and Bale.

Bauxite reserves are thought to be 1.2 million tonnes located in Kita, Kenieba and Bafing- Makana. Traces of manganese have been found in Bafing – Makana, Tondibi and Tassiga.

Other mineral resources and potential in Mali

Calcarous rock deposits: 10 million tonnes est. ( Gangotery), 30 million tonnes est. ( Astro) and Bah El Heri ( Nord de Goundam) 2.2 Million tonnes est.

  • Copper: potentialities in Bafing Makan ( Western Region) and Ouatagouna ( Northern Region)
  • Marble : Selinkegny ( Bafoulabe) 10.6 MT estimated reserves and traces at Madibaya
  • Gypsum: Taoudenit ( 35 MT est.), Indice Kereit ( Nord de Tessalit) 0.37 MT est.
  • Kaolin: Potential estimated reserves ( 1MT) located in Gao ( Northern Region)
  • Phosphate: Reserve located at Tamaguilelt, production of 18,000 t/per annum and an estimated potential of 12 million tonnes. There are four other potential deposits in the North of 10 million tonnes.

Lead and zinc: Tessalit in the Northern Region ( 1.7 MT of estimated reserves) and traces in Bafing Makana ( Western Region) and Fafa (Northern Mali)

  • Lithium: Indications in Kayes ( Western Region) and estimated potential of 4 million tonnes in Bougouni ( Southern Region)
  • Bitumen schist: Potential estimated at 870 million tonnes, indications found in Agamor and Almoustrat in the Northern Region.
  • Lignite: Potential estimated at 1.3 million tonnes, indications found in Bourem ( Northern Region)
  • Rock Salt: Estimated potential of 53 million tonnes in Taoudenni ( Northern Region)
  • Diatomite: Estimated potential of 65 million tonnes in Douna Behri ( Northern Region)

Mali’s Petroleum potential already attracting significant interest from investors

Mali’s Petroleums potential has been documented since the 1970’s where sporadic seismic and drilling revealed probable indications of oil. With the increasing price of global oil and gas resources, Mali has stepped up its promotion and research for oil exploration, production and potential exports. Mali could also provide a strategic transport route for Sub-Saharan oil and gas exports through to the Western world and there is the possibility of connecting the Taoudeni basin to European market through Algeria.

Work has already begun to reinterpret previously gathered geophysical and geological data collected, focussing on five sedimentary basins in the North of country including: Taoudeni, Tamesna, Ilumenden, Ditch Nara and Gao.

So here we have it

Whatever is reported by the mainstream media, the goal of this new war is no other than stripping yet another country of its natural resources by securing the access of international corporations to do it.  What is being done now in Mali through bombs and bullets is being done to Ireland, Greece, Portugal and Spain by means of debt enslavement.

And the people suffer and die

The Guardian reported 2 days ago [5] :

“The human toll has not yet been calculated, but a communique read on state television late Saturday said that at least 11 Malians were killed in Konna.

“Sory Diakite, the mayor of Konna, says the dead included children who drowned after they threw themselves into a river in an effort to escape the bombs.

“Others were killed inside their courtyards, or outside their homes. People were trying to flee to find refuge. Some drowned in the river. At least three children threw themselves in the river. They were trying to swim to the other side. And there has been significant infrastructure damage,” said the mayor, who fled the town with his family and is now in Bamako.”

Who knows what the death toll is today.

God help any country and its people with natural resources to be exploited.

Notes:

[1] [2] [3] http://rt.com/news/france-mali-french-troops-006/

[4] All information taken from Le Journee Miniere et Petrolieres du Mali (government information)http://www.jmpmali.com/html/miningandpetroleum.html

[5] http://www.guardian.co.uk/world/2013/jan/13/mali-neighbours-troops-french-intervention

Source

The Rise and Fall of Third Worldism – Part 1

1 Jan

third_world_countries_map_world_2

PART ONE: “Two, Three, many Vietnams”: National Liberation and the Rise of the Third World (1945 – 1991)

Asia, Africa and Latin America in the Early Years of the Century

With the exception of Latin America, and several noteworthy cases in Africa and Asia, the pre-1945 history of what came to be known as the “Third World” is overwhelmed by the fact of imperialism. Native voices were silenced and native cultures nearly eradicated.

In Asia, Japan was the only country to industrialize, and thus the only country to emerge as a major player in world affairs. Although at first resistant to Western influences; by the middle of the 19th century Japan had embarked on a major modernization program. Building upon traditional values, Japan built an army and navy powerful enough to challenge Russia over Korea at the turn of the last century; and strong enough to join the British, French, Germans, and Americans in carving out a sphere of influence in China. A hybrid of feudal/warrior institutions and modern technology would characterize Japan throughout most of the 20th century. Some argue that this mixture would enable Japanese economic success.

China, the most populous nation on earth, with a culture going back some 5,000 years, was weak and felt herself victimized by the Great Powers. Unlike Japan, China had not modernized. Chinese institutions had frozen. The Manchu dynasty which had ruled China for some 300 years seemed more interested in maintaining itself in power than in bettering the lot of its people; the majority of whom lived in conditions of appalling poverty. Although there was a strong feeling against foreign domination, which periodically erupted into mass uprisings such as the Boxer Rebellion; China had been effectively divided up amongst the Great Powers, who controlled large areas known as ‘concessions’ where they enjoyed trade monopolies. The corrupt and infirm Manchu dynasty fell underneath its own weight in 1911. The collapse of Manchu rule created a power vacuum which was filled by ambitions local strongmen, the ‘warlords,’ who became a law unto themselves in China’s vast outlying regions and frustrated any attempt at national unification.

Only two nations in Africa escaped colonial rule: Liberia and Ethiopia. Liberia, created by American abolitionists in 1825 as place to which future freed slaves could be “repatriated,” existed as a small anomaly to the general imperialist trend. Ethiopia, the ancient kingdom of Abyssinia, continued as a feudal monarchy surrounded by European protectorates and outright colonies.

Latin America was the great exception. By 1821, most of the old Spanish and Portuguese colonies had become independent states. Most of the 19th Century, in Latin America was consumed by a fierce struggle between traditional elites who favored a continuation of the old colonial plantation system and modernizers who wished to institute capitalist economics and bring in contemporary technologies and ideas. This conflict was further complicated by the beginning of the 20th Century by the active involvement of the United States in the region. Going back to the Monroe Doctrine of 1825, the United States had seen Latin America as its “back yard”; and American investments and interests in Latin America grew exponentially.

In Central America and the Caribbean, the battle between Conservatives (traditionalists) and Liberals (modernizers) lasted, in some case up to the 1930s. The ever increasing US presence stunted indigenous development and encouraged the rise of military dictatorships which maintained a precarious balance between repressing domestic dissent and ensuring continued US support. In Cuba and Puerto Rico, Spanish colonial rule was replaced, in the first instance by an apparent independence masking the reality of outside control, and in the second case, by direct US annexation.

Different scenarios were played out north and south of Central America. To the north, Mexico, which had, shortly after independence, lost much of its territory to the United States in the Mexican-American War of 1842, developed a strong, albeit contradictory state. In 1911, the Mexican Revolution overthrew the 40-year military dictatorship of Porfirio Diaz and inaugurated a period of titanic political/economic/social struggle. Populist radical leaders such as Francisco Villa and Emiliano Zapata vied with conservatives such as Venustiano Carranza and Alvaro Obregon as ad hoc revolutionary armies fought against whom ever happened to constitute the government at the time and each other. Eventually, the radicals were either marginalized or destroyed, and power settled into the hands of a conservative, modernizing elite composed of political strongmen and their followers. This elite held power through the mechanism of the Institutional Revolutionary Party (PRI). The PRI oversaw the secularization and modernization of Mexican society. By 1945, Mexico was a contradictory mixture of large cities with modern industries, and a poor, backward countryside; a strong national sense of self, and control by a coterie of politicians and businessmen; an independent foreign policy, and a sharp awareness of the presence of the United States. In one way or another, this pattern would come to characterize not only Mexico, but much of Latin America.

In the south, Brazil and Argentina were becoming industrial power houses – albeit conflicted ones. Brazil seemed to follow the pre-established Mexican pattern: large, sprawling urban areas surrounded by impoverished rural zones. Brazil’s industries were concentrated in the north and along the coast; the wealth of the interior was only sporadically exploited. Argentina, with its large immigrant population (mainly Italian and Eastern European) provided something of a contrast. Heavy industry had appeared at the dawn of the century; the immense volume of European immigrant coming to work in those industries. The immigrants brought with them European ideas and social relations; both of which conflicted with traditional values. By 1945 the dictatorship of Juan Peron which combined a fascist core with modernizing elements initiated a period of military rule which would, by and large, characterize Argentina until the 1980s.

Imperialism and Colonialism Revisited

The decisions of the Versailles Conference of 1919 dismantled the Turkish, German and Austro-Hungarian Empires, but kept the British and French Empires intact. Not only that, but the Portuguese continued to rule Angola and Mozambique in Africa; the Belgians continued to rule the Congo; and the Dutch continued to govern Indonesia. The Middle East was divided between British French spheres of influence and protectorates. Canada, Australia, and New Zealand did become independent commonwealths – and Ireland did fight her way to a disunited independence – but, by and large, imperialism remained intact after World War I.

It wouldn’t be until after World War II that powerful drives towards independence and de-colonization would shatter the old European empires and create the modern states of Asia and Africa. The Second World War, with its anti-fascist and democratic aspirations, would impel the peoples of the colonial world to demand the same.

National Independence Struggles

In some cases, indigenous forces had played a major role in the defeat of the Axis powers. In Vietnam and Indonesia, Ho Chi Minh and Sukarno (respectively) emerged from the war as venerated national leaders. After the war, the French attempted to restore their rule in South East Asia. This misguided attempt came to an end in 1954 when, at the battle of Dien Bien Phu, Vietnamese forces under the Communist leader Ho Chi Minh which had previously defeated the Japanese; now prevented the French from returning. When the Americans tried to supplant the French, they too came to grief. A similar situation unfolded in Indonesia when the Dutch tried to restore the pre-war order. A similar outcome resulted: Sukarno, who had led resistance to the Japanese, now oversaw the independence of Indonesia.

The British came out of World War II in no condition to hold their empire together. In India, the Congress Party, under the leadership of Mohandas Gandhi, Jawaharlal Nehru, and Mohammed Ali Jinnah had been the focus of the independence movement there for decades. Their moment arrived in 1948 when the British pulled out and Indian independence was declared. But independence brought crisis. Perhaps with British encouragement, Jinnah led a faction which demanded that a separate Muslim state be created. In multi-religious, polyglot India, this demand led to massive disruption, forced resettlement of huge amounts of people, and a great amount of ethnic and sectarian bloodshed. In the end, India (Hindu) and Pakistan (Muslim) were created as two separate – and mutually hostile – states.

In Africa, decolonization quite often led to extended periods of instability. Independence leaders such as Jomo Kenyatta (Kenya), Julius Nyere (Tanzania), and Kwame Nkrumah (Ghana) strove to modernize their countries by following a socialist model of development. In the Congo, Patrice Lumumba failed to establish a fully independent state, at the cost of his life. In many parts of Africa, the pull out of the colonial powers created confusion, chaos, and ethnic strife. Often this was caused by old imperial states themselves, as they continued to try to exert influence in their former possessions by sponsoring ethnic and political rivalries. Portugal refused to divest itself of its colonies, with the result that it took nationalist guerrilla movements until the 1970s to establish the independent nations of Mozambique and Angola. In the former British colonies of Rhodesia and South Africa, the white settler population refused to yield to demands for civil equality for the native Africans. Fighting lasted until 1975 when Rhodesia became the majority-African governed Zimbabwe (under Robert Mugabe); and until 1989 when the racist apartheid system was destroyed in South Africa (under Nelson Mandela).

In the Middle East, the Algerian Revolution of 1956 forced the French out of that country. In Egypt, Gamel Abdel Nasser came to power with a promise to encourage “Arab unity” and “Arab Socialism.” Nasser’s ideas spread to Syria and Iraq, where a movement claiming to champion Arab Socialism, but in fact more reminiscent of Italian Fascism took hold, Baathism. In many cases, interference by Western powers led to the displacement of radical, modernizing regimes with repressive conservative governments. The neutralization of the Left and the bankruptcy of the Right led many to see radical Islam as a viable political alternative.

The creation, by UN mandate, of the state of Israel in 1948 exacerbated the crises endemic to the area. The flow of immigrants to the new Jewish state led to the displacement of much of the native Palestinian population. The new Israel developed into a thoroughly militarized state, eventually going to war with the surrounding Arab states in 1967 and 1973.

The movement for de-colonization was strongly affected by the Cold War. Many independence movements had adopted one or another variety of socialism as its ideology, and many post-independence regimes sought Soviet aid. Other, more conservative post-independence governments became allies of the United States. Some changed sides. Thus, movements such as the National Liberation Front of Vietnam, Frelimo in Mozambique, and the MPLA in Angola saw themselves as Marxist; Israel, South Africa, and Saudi Arabia were in the US camp; while governments in Algeria, Egypt, and the Congo (Zaire) switched from Soviet to American sponsorship. The proxy conflict between the US and USSR was played out in the post-colonial world. Soon, two other forces, China and Cuba, would enter the fray.

The Chinese Revolution

China has seen a century of revolution – and some would say that it’s far from over. Revolution overthrew the decrepit Manchu dynasty in 1911. The newly created Chinese Republic, under the leadership of Dr. Sun Yat-sen and his Nationalist Party (Kuomintang), wanted to create a united, modern, and democratic China. The first step in achieving this would be the cancellation of foreign concessions and the bringing to heel of the regional warlords. It was ‘simple’ enough to ask the British, French, etc. to leave; the second part of that equation was more difficult to achieve. The warlords were ensconced in remote areas, unseating them would require a trained, professional army. In order to raise an officer class capable of leading such an army, the Whampoa military academy was established in 1920. The Whampoa academy attracted many young, patriotic Chinese of all political persuasions. Many of China’s future leaders would come out of the Whampoa Academy. At the head of the academy, as director, was Sun yat-Sen’s protégé, Chiang Kai-Shek. By the end of the 1920s, the “Northern Expedition,” as the anti-warlord campaign was termed, was largely successful. By that time, however, a new conflict had developed.

The new China was alone in the world. The former imperial powers, who had just been asked to leave, weren’t about to render any aid. Desperate for support, China turned to another nation just then going through a revolution of their own, the Soviet Union. The Soviets agreed to provide political and military aid to China, but at a price: that the Kuomintang bring into the government, as partners, the newly-created Communist Party of China. Sun Yat-Sen agreed, and the Communists were essential to victory in the Northern Expedition. However, Sun Yat-Sen’s lieutenant Chiang Kai-shek vehemently disagreed with any cooperation with the Communists. After Sun’s death in 1925, he was succeeded by Chiang who jettisoned any pretense of democracy, making himself military dictator. Chiang also wanted to get rid of the Communists at the first available opportunity.

In November of 1927, Chiang struck. Nationalist troops unexpectedly turned on their Communist fellows. In all of China’s major cities, Communists and their sympathizers were massacred in the streets. Overnight, the Chinese Communist Party was almost exterminated. In a state of confusion and disarray, the surviving Communists, made their way to the southern province of Jianxi where, a local Communist leader, an ex-librarian named Mao Tse-tung, had managed to hold the party together.

Organizing Communist guerrilla forces into a Red Army, Mao managed to hold off the Nationalists long enough to force an escape out of Jianxi. Known as the “Long March,” the Communists embarked on a 6,000 mile trek over rivers, mountains, and deserts, fighting Nationalists troops all the way. Finally, the Communists found sanctuary in the area of Yenan in China’s northern mountains. This, then, became their base. The Long March solidified Mao as the unquestioned leader of the Communist Party. From Yenan, Mao’s Communists engaged Chiang’s Nationalists in guerrilla warfare, and extended the Communist-controlled zone.

The full-scale Japanese invasion of China brought a temporary truce between the Communists and Nationalists, as they agreed to join forces against the foreign occupiers. Overall, as American advisers during World War II pointed out, the Communists were the more effective fighters against the Japanese. Chiang seemed to be more afraid of the Chinese Communists than he was of the invading Japanese; and American aid sent to Chiang often ended up in the pockets of Nationalist politicians. The end of the war and the defeat of Japan signaled a resumption of hostilities between the Nationalists and Communists. After an intense four-year civil war, Communist forces gained the upper hand. Chiang’s Nationalists were forced to flee the mainland; establishing themselves, as the republic of China, on the island of Taiwan – where they have remained to this very day. On October 10, 1949, from Beijing, Mao proclaimed the creation of the new, communist, Peoples Republic of China.

Communist China became a new and powerful ally of the Soviet Union during the Cold War. In fact, Chinese troops entered the Korean War against the United States. Domestically, the Communists embarked on numerous developmental and modernization campaigns. Campaigns to eliminate infectious disease and illiteracy, as well as campaigns to ensure the equality of women were, in great part, successful. Attempts to industrialize China’s economy were less so. The best known of these, the “Great Leap Forward” (1959), which tried to jump start China’s development through mass participation in the form of things such as encouraging the building of backyard blast furnaces to produce steel, was a failure.

Khrushchev’s de-Stalinization of the Soviet Union and his policy of Peaceful Coexistence with the West met with disapproval in Beijing. Mao felt that the new Soviet leaders were abandoning revolutionary principles and bowing to the US. Tensions within the Communist camp came to the breaking point in 1961 when, at a meeting of Communist parties in Moscow, the Chinese and Albanian delegations denounced the Soviets and their supporters and walked out. The Sino-Soviet split divided the world Communist movement and led to the creation of new, more militant Communist groups dedicated to the Chinese position. China felt itself to be the new center of the world revolutionary movement and, as such, supported and encouraged revolutionary parties and guerrilla groups in the Third World. The Cold War was developing into a three-cornered fight.

Within the Communist Party of China itself, Mao feared that elements similar to those represented by Khrushchev in the USSR would derail his revolutionary vision. Starting in 1964, Mao moved to isolate “conservative” and “pragmatic” elements in the Party. His attempt at a mass mobilization to reinvigorate revolutionary enthusiasm resulted in the upheaval known as the “Great Proletarian Cultural Revolution.” The Cultural Revolution consumed China in chaos as radical and moderate forces, through the medium of youth organizations known as “Red Guards,” jostled each other for power and influence. Reaching a crescendo in 1966 – 1967, the Cultural Revolution involved pitched armed battles between rival Red Guard units. Mao called a halt to the anarchy in 1969, castigating some of the excesses of the more extreme radicals. However, tension and conflict between the more radical and the more pragmatic members of Mao’s inner circle remained.

The same year, 1969, that Mao rolled back the Cultural Revolution saw an intensification of the Sino-Soviet crisis as the Chinese and Soviets came to blows over a border dispute. This event seems to have convinced Mao that the Soviet Union was a greater threat to China than the United States. China offered the United States an opportunity to begin a normalization of relations; an opportunity the American President Richard Nixon took advantage of. In 1972, Nixon traveled to China, met with Mao and Chinese Premier Chou En-lai, and the thaw in the Chinese- American Cold War began.

Chou En-lai’s, a protector of the moderates in Mao’s circle, death in 1976, followed by Mao’s own passing later that year renewed the conflict between radicals and moderates within ruling Party circles. After a brief and intense power struggle, the radicals were defeated. Deng Xiaoping, who had been exiled as a “capitalist roader” during the Cultural Revolution emerged as China’s new leader. Deng’s policies not only reversed the Cultural Revolution, but effectively dismantle communism itself. Throughout the 1980s, China more and more embraced a pro-market orientation, encouraging foreign investment and development of key industries. By the 1990s, China had emerged as a major economic force, exporting goods across the globe. Although the People’s Republic of China is still ruled by the Communist Party, it has, in fact, become a modern capitalist power.

The Cuban Revolution

Although conducted on a much smaller scale than the Chinese Revolution, the Cuban Revolution of 1959 would send even stronger shock waves throughout the Third World. On New Year’s Eve of 1959, guerrilla forces led by Fidel Castro overthrew the long-standing government of dictator Fulgencio Batista. Batista had been supported by the United States since 1933; and, under his leadership, the island had become a haven for US interests which virtually managed the Cuban economy.

Castro’s victory signaled major reform, including land redistribution, literacy and public health campaigns, and the nationalization of major utilities and industries. These latter reforms incurred the ire of American corporations which lost their investments in Cuba. The United States’ severing of diplomatic relations followed by the failed Bay of Pigs Invasion and an economic embargo against Cuba caused the Castro government to fully enter the Soviet orbit. However, the relationship between Cuba and the Soviet Union was far from smooth. Having come to power in through a guerrilla movement in a peasant society, Cuba had much in common with China. Both China and the USSR courted Cuba to support them in their struggle with each other. Cuba was, for a time, caught between the feuding Communist powers. Instead, Cuba developed a unique image and presented itself as a model for Third World nations to follow. This pleased neither China nor the Soviet Union. Adding to the conflict with the Soviets was Cuba’s support for armed guerrilla movements, especially in Latin America, which threatened Soviet attempts at a rapprochement with the US.

In the wake of the Cuban Revolution guerrilla and national liberation movements emerged, aiming at spreading the Cuban example in Latin America. Castro’s right-hand-man, the Argentine born Ernesto “Che” Guevara, was central to this endeavor. Guevara personally led Cuban-trained guerrillas in Africa; and, in an attempt to foment revolution in South America, died while organizing a guerrilla force in Bolivia, becoming a revolutionary icon in the process. Although most of the guerrilla organizations spawned in the 1960s failed, they had the unexpected consequence of producing a severe reaction in the form of repressive military regimes devoted to their destruction. Thus, in Brazil, Peru, Bolivia, El Salvador, Guatemala, and Argentina, extremely violent military dictatorships characterized those nations in the 1970s. In Chile, the election and subsequent overthrow of a Socialist president, Salvador Allende, produced a similar phenomenon. Cuban advisers trained guerrillas in other parts of the world, as well, namely Angola and South Africa.

Cuban attempts at developing an independent, diversified, modern economy met with failure. By the 1970s, Cuba had abandoned overtly encouraging armed struggle and integrated itself into the Soviet system. This would continue until the collapse of the Soviet Union itself in 1991.

In the 1950s, Indian Prime Minister Nehru stated that the modern world was divided into “Three Worlds.” The “First World” consisted of the United States and the advanced capitalist countries of Western Europe; the “Second World” was the Soviet Union and its Communist Bloc allies; the “Third World” was the poor, underdeveloped nations of Asia, Africa, and Latin America. Fought over by both the First and Second Worlds, Nehru urged the Third World to develop an independent stance, find its own voice, and put forward its own demands and aspirations. Thus, the “Non-Aligned Movement” came into being.

Led by India’s Nehru, Yugoslavia’s Tito, and Egypt’s Nasser, Non-Alignment did not mean neutrality. India leaned to the West, Cuba (who later joined the Non-Aligned Movement), leaned towards the Soviets; instead, Non-Alignment meant that the Third World countries recognized that they shared a commonality of interests. Indeed, many of the Non-Aligned nations were bitter rivals; India and Pakistan readily come to mind. However, despite sometimes serious differences, the Non-Aligned nations managed to bring questions of development and industrialization, debt and poverty, national independence and self-determination to the world’s attention.

Although the Non-Aligned movement seems to have greatly dissipated with the collapse of the Soviet Union and the appearance of a unipolar world dominated by the United States, non-alignment did shift world politics from the East vs. West emphasis of the Cold War to the North vs. South conflict that persists to this very day.

FORTHCOMING:

PART TWO: “The coming of the new international:” Third Worldist Theory in the 1950s – 1970s.

Privatization in Ex-Communist Countries Killed Over One Million People

30 Dec

5500_Globe_-_Russia___iStockphoto-FotograflaBasica

As many as one million working-age men died due to the economic shock of mass privatisation policies followed by post-communist countries in the 1990s, according to a new study published in The Lancet.

The Oxford-led study measured the relationship between death rates and the pace and scale of privatisation in 25 countries in the former Soviet Union and Eastern Europe, dating back to the early 1990s. They found that mass privatisation came at a human cost: with an average surge in the number of deaths of 13 per cent or the equivalent of about one million lives.

The rapid privatisation programme, part of a plan known by economists as ‘shock therapy’, led to a 56 per cent increase in unemployment, which the study says played an important role in explaining why privatisation claimed so many lives. Many employers provided extensive health and social care for their employees, so through privatisation workers experienced the ‘double whammy’ of losing not only their livelihood but also their means of surviving the crisis.

David Stuckler from Oxford, and colleagues Dr Lawrence King from Cambridge University and Professor Martin McKee, from the London School of Hygiene and Tropical Medicine, took death rates reported by the World Heath Organisation for men of working age (15-59 years) in 25 post-communist countries and compared them to the timing and extent of participation in mass privatisation and other transition policies.

The team took into account other factors that might affect rising death rates (such as economic depression, initial conditions and health infrastructure). They also examined other measures of privatisation from the European Bank for Reconstruction and Development, a bank which gave loans in support of radical mass privatisation.

During the 1990s, former communist countries underwent the world’s worst peacetime mortality crisis in the past 50 years – with over three million avoidable deaths and 10 million ‘missing’ men, according to the United Nations.

However, while life expectancy plummeted in some countries, like Russia and Kazakhstan; the populations’ health steadily improved in other countries, such as Slovenia. Previous research shows that unemployment and levels of alcohol consumption are major factors behind these differences, but this study is thought to be the first to isolate aspects of the reforms process that might cause these variations. It finds that death rates are linked to the speed and type of privatisation and resulting unemployment – and also to the level of social support available. If at least 45 per cent of the country’s population were members of at least one social organisation, such as a church or trade union, they were better protected from the economic shocks, the authors found.

David Stuckler, from Oxford’s Department of Sociology, said: ‘Our study helps explain the striking differences in mortality in the post-communist world.  Countries which pursued rapid privatisation, or ‘shock therapy’, had much greater rises in deaths than countries which followed a more gradual path. Not only did rapid privatisation lead to mass unemployment but also wiped out the social safety nets, which were critical for helping people survive during this turbulent period.’

Professor Martin McKee said: ‘As variants of rapid reform policies are being debated in China, India, Egypt and other developing and middle-income countries, including Iraq, our study reminds us that radical economic reforms affect ordinary people and, in some cases, cost them their lives.’

Source

Over 100 million US residents on welfare

8 Dec
Reuters / Eduardo Munoz

Reuters / Eduardo Munoz

Government handouts are designed to help the needy across America, but how many US residents actually reap those benefits? According to a presentation to be delivered in Washington this week, it might be way more than you thought.

Republican Party representatives sitting on the Senate Budget Committee plan to present Congress with their latest findings on welfare programs in the United States this week, and their research reveals that the number of US residents receiving federal assistance isn’t only on the up but now is at its highest ever in the history of the country. 

According to an excerpt from the committee’s new presentation, nearly one-in-three US residents receive government assistance — and that’s not even including those benefitting from Social Security or Medicare.

Over 100 million people in the United States are now receiving some form of federal welfare, GOP reps claim, a figure they’ve found after combing through statistics collected from the US Census’s Survey of Income and Program Participation. Paired with recent figures out of the Census Bureau, that brings the percentage of people residing in the States receiving some form or another of federal welfare at nearly one-in-three, given that the country’s population is estimated to be around 314 million, according to the department’s most recent statistics.

The committee’s findings actually put the figure of US residents on welfare close to around 107 million, which appears substantial when compared to statistics from only a few years ago. During the first quarter of 2009 when Barack Obama was inaugurated as president of the United States, roughly 97 million US residents were on the receiving end of federal programs.

And although the committee’s research does not take into account Social Security and Medicare, the Supplemental Nutrition Assistance Program (SNAP), or food stamps, more than makes up for that exclusion: the study finds that the number of American receiving SNAP benefits have doubled in barely a decade.

“Among the major means tested welfare programs, since 2000 Medicaid has increased from 34 million people to 54 million in 2011 and the Supplemental Nutrition Assistance Program from 17 million to 45 million in 2011,” the Senate Budget Committee reports.

Researchers add that the expect spending on food stamps to reach $800 billion during the next ten years.

Source

Supply, Demand, Value & the “Mud Pie” Argument

7 Dec

6a00e54f8bcd4e883300e550171a068833-800wi

The labor theory of value is an essential concept in a Marxist understanding of the world. It explains how value finds its origin in the productive efforts of human beings, that workers are essential to the realization of value in production. Their labor power is exploited in this dynamic, because while they are essential to the realization of value, they are only compensated a meager wage, rather than being compensated for the full value they worked to create. It is in this way that value requires labor to be realized, because without workers and their labor power, there can be no production. Without people working to build and manufacture goods, to extract natural resources, to transport them and to facilitate their use, value is impossible to realize.

This would seem to make sense to anyone willing to critically analyze our system, to see who does the work in our society and who ends up taking home the products of the blood, sweat and tears of workers, yet this theory is contested by the proponents of bourgeois ideology and analysis. In any classroom one would attend teaching economics under capitalism, it is impossible to avoid the analysis that “market forces” decide value, not labor. “Supply and demand” are seen as the chief determiners of the value of commodities. To illustrate their point of contention with the labor theory of value, they lay out a ludicrous scenario known as the infamous “mud pie” argument. Here we will examine the validity of this “argument” and offer refutation.

The “Mud Pie” Argument Itself

“Imagine you spend hours and hours of time working to make a mud pie. Would it be worth more for the labor you had put into it? Of course not, because no matter how hard you work to make a mud pie, it is still a mud pie, regardless of how much or how little time you put into something. There is no demand for mud pies, and if someone needed one, they could make it themselves, because mud isn’t in short supply.”

The Contortions of a Thought-Experiment Gone Wrong

The astute reader would hear this feeble analogy and not be convinced, since the hypothetical situation required to call this theory into question is absurd, yet the labor theory of value can be demonstrated in every workplace. In explaining the labor theory of value, one need only give the example of a workplace, a simple wage, the products produced and the difference between what a commodity sells for and how the workers is paid by comparison, showing the surplus value as being a product of the exploitation of a worker’s labor. Yet in this attempt to “debunk” we have a goofy story wherein someone spends a great deal of time playing with mud and asking to be paid for it. The question is, how exactly is an unrealistic scenario about making mud pies supposed to “disprove” the idea that value cannot truly be realized without human labor?

In the course of philosophical debate, hypothetical scenarios like the “mud pie” are referred to as Gedankenexperiments, or thought-experiments, wherein perspectives can be applied, challenged and assessed within the context of a scenario. These can vary in extremeness from being a realistic, everyday occurrence to being outlandish and bizarre. They are important in philosophy since they allow ideas to be tried out when the application of these ideas would be difficult, unethical or inconvenient to create within reality.

Some philosophical proclamations, such as perceptions of what a god or gods are like, how perfect worlds might function, how morality relates to these sort of concepts, etc., require experiments of thought because they cannot be tested in reality. If an idea cannot be applied to material conditions, the idealist will create idealized conditions with which to apply it to. This is precisely the case with our mud pie. Is anyone in their lifetime going to see someone work for 7 hours on a mud pie and attempt to sell it for, say, $700 dollars if they aren’t mentally disturbed? Probably not. Yet, tomorrow, are we going to see workers make the products which will stock stores and be paid a fraction of the wealth they’ve helped bring about for their bosses? Yes, without fail. The lengths of silliness that this argument must go to make it a silly argument.

The Market is the Chief Source of Value?

Ignoring, for a moment, the silly knots with which capitalism’s apologists will tie themselves into to attempt to “disprove” Marxism, let’s examine the position their argument seems to suggest. If someone can spend hours making a mud pie, and its value not increase, then its value must not be determined by labor, but by the market. Without market, without supply and demand in the context of a market, there can be no value yielded from labor. Essentially, if we believe the premise of this argument, then this “market” is the generator and arbiter over all value.

Yet how can this be the case? The “market” can’t build things, cannot mine coal or run machinery for the purpose of producing industrial and consumer products. Yet, we are supposed to see it as the chief decider of value, as if labor could be removed from the situation effectively. It is only in the realm of the hypothetical that this could be achieved. Labor is, and always will be, the key to unlocking any value, whether it is a highly processed commodity or an item picked off of the ground. As well, one doesn’t require a market to find value in something, since someone can find use-value in something they acquire, with the supply being irrelevant and their demand being the only demand taken into consideration. Let’s say someone has an itch on a hard-to-reach spot on their back, picks up a stick from the grass, and proceeds to use it to scratch that itch. This person is gaining use value, and needs not evaluate it in the context of how many sticks are in the nearby area. This value was not realized by a market, but was realized by the physical exertion of bending over, picking up the stick and manipulating it to work for their needs. Again, as well, here we have an example that anyone with access to a stick can try out to see the validity of labor determining value rather than exclusively markets determining value.

Misreading Marxism to “Defeat” Marxism

This mention of “use value” brings us to another problem with the “mud pie” problem. In addition to notions of the origin of value that are, at their core, idealist, there is also a logical fallacy that this argument takes up as its backbone. This argument mischaracterizes the Marxist labor theory of value, and thus succeeds only at arguing with a straw-man of its own creation, rather than actual Marxism. It assumes that value is generated only through labor, which makes it possible to create value whenever labor is done. Is there only one value that has as its creator the human hand? The answer is no.

Marxists understand a variety of different expressions of value: use value, exchange value, surplus value, to name a few. The Marxist understanding of value is fluid; it endeavors to understand the context of the creation of commodities, the use of commodities, the purchase and sale of commodities. As value is something that must be understood in its material context, Marxists endeavor to understand production in its different phases to be able to apply the correct understanding of value and exploitation.

There can be no Supply or Demand without Labor

The nature of their argument would seem to suggest a universal and omnipotent characterization of the “market” as the creator of value, since their mud pie example would seem to imply that labor entirely incidental to the creation of value. If this is truly the case, that supply and demand are the central mechanisms for understanding value, then where does this supply come from? How can there be a demand without there being people who have the purchasing power to fulfill the “demand for demand” by using their wages to purchase everyday items? Clearly, somebody has to physically do something at some point for value to be realized, so value is at least partially contingent on labor power.

It is possible for us to further deconstruct and abolish this argument by demonstrating a scenario wherein demand is high, supply is low yet the prices for a commodity are low. Imagine a poor society suffering from famine, the likes of which are not uncommon. The people in this society are incredibly poor, the harvest has been poor and food is scarce. Those who are able to sell the little food that is available cannot sell it for very high. Why? Because if you are holding onto a highly valued commodity and price it to a level where no one can afford it, you cannot realize any value for that commodity. High demand and low supply do not, as the mud pie apologists would argue, account for value in every situation that realistically takes place in the material world. Yet because there was someone who invested the energy to harvest, despite the horrendous conditions for agriculture, value can be realized through the little food that remains.

Mud Pies for Sale!

After pointing out these holes, it might seem to be an afterthought to point out that mud pies are bought and sold under capitalism, and found use value for thousands of years. Mud has been, and still is, utilized as a material for building and sculpting. Bricks are, essentially, baked mud. Pottery is still made using mud. Mud is bathed in, is used in landscaping and finds other uses in everyday life. A mass of “mud” could, arguably, be sold if it were sculpted into something useful such as a brick or container of some sort.

Again, a commodity exchange evaluating the supply of mud and how much people are willing to pay for a mud pie do not capture the origins of the value for mud. However, having human hands sculpt it into something useful does. Human beings engender value when they take something that is needed elsewhere and use their bodies in the process of facilitating its transport. The genius of human production can, and does, take something from being in a state where it is less useful, less valuable, and turns it into something precious through their labor. Scientists can take a lump of carbon, subject it to incredible heat and pressure, and create synthetic diamonds. The supply and demand for carbon didn’t create the value here, but the efforts of human labors have.

Conclusion: The “Mud Pie” Argument isn’t much of an Argument

The “mud pie” argument is ubiquitous, but not hard to defeat. While the enemies of Marxism see it as an Achilles heel, the Marxist understands that the “vulnerability” they exploit does not come from an objective flaw in Marxist theory, but flaws in the deluded thinking of bourgeois economists and those who hear and repeat this argument without seriously examining Marxism or their own argument. What this weak argument reveals is that absurd analogies, one liners and straw-men is the best capitalism can do against Marxism. With “problems” like the “mud pie argument,” the Marxist has little to worry about.

US Homelessness: 1.6 Million Children Are Homeless, Up by 38 Percent Since 2007

21 Oct

By Gilbert Mercier
NEWS JUNKIE POST

According to a report released today by the National Center on Homelessness, more than 1.6 million children are currently homeless in America. This amounts to one child in 45. It represents a dramatic increase of 38 percent since the onset of the recession in 2007. The report “America’s Youngest Outcasts” paints a grim picture, and it provides a ranking between the 50 states. It also recommends some policy solutions to be implemented both on  Federal and State levels.

“The recession has been a man-made disaster for vulnerable children. There are more homeless children today than after the natural disasters of hurricanes Katrina and Rita, which caused historic levels of homelessness in 2006. The recession’s economic devastation has left one in 45 children homeless, an increase of 38 percent from 2007 to 2010,” says MD Ellen Bassuk, President and Founder of the National Center on Family Homelessness and associate Professor of psychiatry at Harvard Medical School.

The report shows that homeless children in the United States suffer from hunger, poor physical condition and emotional health as well as limited academic proficiency in reading and math. “The constant barrage of stressful and traumatic experiences has profound effects on their development and ability to learn,” says the report. According to the report, 30,000 children become homeless each week, and more than 4,400 each day.

Yet the planning and social safety net to protect these vulnerable children is extremely limited. Sixteen states have no planning at all, and only seven states are actively addressing the issue. The states fairing the best are Vermont, Minnesota, Nebraska, North Dakota, Maine, New Hampshire, New Jersey, Massachusetts, Montana and Iowa. At the very bottom of the ranking are Georgia, Florida, Nevada, Louisiana, New Mexico, California, Arizona, Arkansas, Mississippi and, at the very bottom, Alabama.

“In the face of this man-made disaster, there must be no further cuts in federal and state programs to help homeless children and families. Deeper cuts will only create more homelessness that will cost us more to fix in the long run. We can take specific actions now in areas of housing, child care, education, domestic violence, and employment and training to stabilize vulnerable families and prevent child homelessness,” says Bassuk.

Source

Walmart Black Friday Strike: Workers Threaten To ‘Take Action’ On Retailer’s Busiest Day

18 Oct

By Harry Bradford

Employees at 28 Walmarts in 12 different cities walked out of work Tuesday, but things may get a whole lot worse for the biggest retailer in the U.S. come Black Friday.

United Food and Commercial Workers’ Making Change At Walmart, the group behind the protesters alleging unfair labor practices by Walmart, has warned that the campaign will come to a head on Black Friday, the day after Thanksgiving that’s regarded as one of the biggest shopping days of the year, according to a conference call organized by the group Wednesday.

“We feel like if they refuse to listen to our proposition we will make sure that on Black Friday we will take action inside and outside of stores,” said Colby Harris, 22, a Walmart worker from Dallas, Texas, and a member of OUR Walmart, a UFCW-backed worker organization closely affiliated with Making Change at Walmart. “We’ll make it known that Walmart’s deadline is Black Friday,” he added.

The Black Friday protests could include any “non-violent action, from flash mobs to strikes to public awareness,” Harris added.

David Tovar, Walmart VP of communications, countered the protesters’ claims in an interview with The Huffington Post. “These strikes are an attempt by the unions to further their own political and financial agendas,” he said, noting that the majority of Walmart’s 1.4 million workers are pleased with their jobs. Tovar wouldn’t comment on the possibility of Black Friday strikes.

“More than half of Walmart’s one million hourly store associates have an hourly wage at least $10.00 or higher,” he said. “In fact, in many metropolitan areas in which we operate, our entry level start rates regularly exceeds that of new hires for comparable positions under the UFCW contracts.”

Tovar also said that three quarters of Walmart’s store management teams started out in hourly positions, noting that the company promoted 160,000 hourly workers last year.

If the protesters go through with the Black Friday strike, the move would be unprecedented and could cause a major headache for the retailer on a day when consumers traditionally wait in long lines outside stores for the best deals. But the activists have proven they’re not afraid to break barriers. Before last Friday, no retail Walmart workers had ever gone on strike, United Food and Commercial Workers’ Making Change At Walmart told The Huffington Post.

Still, this is far from the first time Walmart workers have butted heads with their employer. Current and former female Walmart workers filed one of the largest class action lawsuits in history earlier this year, accusing the retail giant of discriminating against women based on gender. The case was ultimately struck down by the Supreme Court. Echoes of that lawsuit persist, as the National Organization of Women has pledged to join the protests on Black Friday, the organization’s president Terry O’Neill confirmed during Wednesday’s conference call.

Also speaking on the call were Sally Greenberg, executive director of the National Consumers League, Pastor Edwin Jones of the Living Faith Baptist Church and International Ministries in Washington, D.C., and Hector Sanchez, executive director of Labor Council for Latin American Advancement. All three speakers reiterated their members’ support for a Black Friday action to protest Walmart.

More recently, Walmart warehouse workers in Southern California marched 50 miles over six days to protest working conditions.

Still, if Walmart were to close on Black Friday, it may help the retailer avoid some dangerous situations. The discounts traditionally offered on the day have a history of inciting violence among shoppers. One woman was arrested last year after pepper-spraying 20 other customers waiting to purchase discounted Xbox video game consoles in order to “get an advantage.”

Source

Against the illusions of “movement building” for the party of insurrection

16 Oct

More realistic than any attempt to push Obama to the left.

We are all familiar with the organizer who organizer who organizes for the sake of organizing, with the politics which prioritizes tactical success in immediate daily work, while paying sterile lip service to an ultimate goal which is hardly taken seriously.

Indeed this type of activism is the norm at least in North America:

Take the case of Wisconsin where a puerile excitement over the manipulative games of Democratic Party state legislators (or worse the police “joining the people”), was far more common then a sober class perspective. Or the incoherent enthusiasm over the Arab uprisings which culminated in the idiotic comparison of the Libyan rebels to the social revolutionary factions in the Spanish Civil War.

Reactions such as these are symptomatic of a tendency which reduces political militancy to glorified social work and drowns any long term revolutionary perspective in the “urgent need” to achieve “practical” goals. .

Thus one is reduced to a disjointed struggle for reform, cheering all the representatives of populist nationalism and social democracy from Micheal Moore to Evo Morales with equal enthusiasm.

Any specific and analytical understanding of social reality which seeks to transcend the structural contradictions of the capitalist mode of production through the abolition of wage labor and the dichotomies it perpetuates is passed over in favor of an insubstantial lowest common denominator demand for “social justice”.

Obtaining the broadest base of “support” through the whole jettisoning of meaningful political content is prioritized over the hard work of contributing to the political construction of the class by the uncompromising assertion of the communist program.

There is nothing “realistic” about accepting the social democratic conception of what is possible, and reducing ones own political commitment to a paid position applying bandages to the gaping wounds of a slowly collapsing system.

France, Greece, the Arab insurrections, the European uprisings against austerity from Iceland to the Baltic, the flaming factories of Dhaka, the street fighting in Bishkek and the strike wave in China.

The spontaneous and incoherent response of the working class to the escalating capitalist offensive is already a global material reality. And the occasional explosions of mass violence occur against the backdrop of the universal experience of disaffection with the wage, the “pre-political” expression of nascent proletarian antagonism in mental illness, social dysfunction and apathy.

What do the populist politics of reform, disconnected single issue campaigns and “coalition building” have to say to this mute experience which struggles to find a voice?

Nothing:

They smother it and do their part in reproducing the ideological hegemony of the bourgeois with appeals to democracy, worker’s rights and the whole rhetorical paraphernalia of the commodity producing subject.

Because open articulation of the need to impose the communist program through insurrection would (we are told) “alienate” the mass of people. As if the mass of people were not already “alienated” from themselves in a quite literal sense of the word.

Constructed as functional subjects in the course of a violent dissociation from our own experience generated by waged and unwaged labor, sexual abuse, prisons, mass media and education, and medical and psychiatric “care”, the best the reformist left can offer us is complacent assistance in the perpetuation of the state of constant disassociation which is the substance of our daily misery.

And when the ever present contradiction between the forces and the relations of production erupts into the open we are enjoined to watch enthusiastically or offer our uncritical support when such explosions are inevitably recuperated into struggles for democratic social and political reform.

The task at hand is not the “struggle for social justice” but the organization of the party to coordinate and diffuse proletarian violence and affinity within the context of the protracted class war for the imposition of the communist program.

A program which can be summed up with elegant simplicity:

Freedom from wage dependency and freedom from sexual violence, the decisive end of the expropriation and mutilation of the creative energy of the body.

The death blow to the process which begins historically with the commodification of women and climaxes in the commodification of everything.

Any other program has nothing to say to the speechless forcibly silenced suffering which defines our lives.

Source

Morsi says IMF loan compatible with Islamic banking

15 Oct

Egyptian President Mohamed Morsi, pictured in September 2012, sought to reassure conservatives at home that a request for a loan of nearly $5 billion (3.8 billion euros) in aid from the IMF would be compatible with Islamic banking principles.

AFP – Egyptian President Mohamed Morsi sought to reassure conservatives at home that a request for a loan of nearly $5 billion (3.8 billion euros) in aid from the IMF would be compatible with Islamic banking principles.

Egypt in August asked for a $4.8 billion loan from the International Monetary Fund, which in turn urged economic reforms.

“This does not constitute Riba” said Morsi, in reference to abusive interest rates as defined by Islamic jurisprudence.

Islamic law prohibits usury but applying interest in some circumstances is acceptable.

“I would never accept that Egyptians live off Riba,” Morsi told tens of thousands of people who packed the Cairo stadium to commemorate the 39th anniversary of the 1973 Yom Kippur war.

“We would rather starve than eat off Riba,” Morsi said.

IMF approval of Egypt’s request would come as a vital boon to its reeling economy.

An economic slump following the February 2011 ouster of Hosni Mubarak aggravated the main problems inherited from his regime: budget-draining subsidies, extreme social inequality, corruption and poor energy infrastructure.

A chief concern is the decline in central bank reserves which have plunged from $36 billion at the start of January 2011 to $14.4 billion, threatening Egypt’s ability to import basic goods such as wheat and refined oil products.

IMF director general Christine Lagarde, who was presented with the loan request during a visit to Cairo in August, said the lender “will accompany Egypt” as it undertakes its challenging journey of reform.

But Lagarde made no firm commitments, saying the amount, details and terms of the loan programme — which Cairo hopes to seal by the end of the year — were still under discussion.

Speaking in Riyadh on Saturday, Lagarde said the IMF was not imposing prior conditions on the negotiations.

Source

Follow

Get every new post delivered to your Inbox.

Join 143 other followers

%d bloggers like this: