Posts Tagged ‘IMF’

“The United States is the most successfully repressed country in the world ” – Stokely Carmichael, Black power activist.

“Repression is when you can get 90% of the students in the U.S to name you all the Three Stooges but can’t tell you what the WTO is.” – Michael Parenti

“The People are the very substance of Power. We have to organise.” – Michael Parenti

A classic talk from 1999 by political scientist Michael Parenti.
It’s just as illuminating today as it was then–and often funny, too.

Parenti shows how the Western colonial powers un-developed the “Third-World”–increasing poverty there in order to enrich private corporations at home.
Indeed (Parenti argues), almost all U.S. foreign policy seems aimed at increasing the profits of the Fortune 500.

This is the real purpose of the hundreds of U.S. military interventions abroad–many of which overthrew democratically elected governments, replacing them with dictatorships friendly to U.S. corporate interests. Boosting corporate profits likewise is the reason behind “humanitarian” military interventions.

Parenti shows that imperialism’s current form is “multilateral free-trade agreements” such as NAFTA and GATT.
These draconian, anti-democratic treaties give corporations the power to veto any national laws that might interfere with their profits.

Parenti’s brilliant, passionate, and funny talk is as relevant today as it was in 1999.


Globalization And Democracy: 

Some Basics

By Michael Parenti

26 May, 2007
Michaelparenti.org


The goal of the transnational corporation is to become truly transnational, poised above the sovereign power of any particu­lar nation, while being served by the sovereign powers of all nations.

Cyril Siewert, chief financial officer of Colgate Palmol­ive Company, could have been speaking for all transnationals when he remarked, “The United States doesn’t have an automatic call on our [corporation’s] resources. There is no mindset that puts this country first.”[i]

With international “free trade” agreements such as NAFTA, GATT, and FTAA, the giant transnationals have been elevated above the sovereign powers of nation states. These agreements endow anonymous international trade committees with the authority to prevent, over-­rule, or dilute any laws of any nation deemed to burden the investment and market prerogatives of transnational corporations. These trade committees–of which the World Trade Organization (WTO) is a prime example—set up panels composed of “trade special­ists” who act as judges over economic issues, placing themselves above the rule and popular control of any nation, thereby insuring the supremacy of international finance capital. This process, called globalization, is treated as an inevitable natural “growth” development beneficial to all. It is in fact a global coup d’état by the giant business interests of the world.

Elected by no one and drawn from the corporate world, these panelists meet in secret and often have investment stakes in the very issues they adjudicate, being bound by no con­flict-of-interest provisions. Not one of GATT’s five hundred pages of rules and restrictions are directed against private corporations; all are against govern­ments.
Signatory governments must lower tariffs, end farm subsidi­es, treat foreign companies the same as domestic ones, honour all corporate patent claims, and obey the rulings of a permanent elite bureaucracy, the WTO. Should a country refuse to change its laws when a WTO panel so dictates, the WTO can impose fines or international trade sanctions, depriving the resistant country of needed markets and materials.[ii]

Acting as the supreme global adjudicator, the WTO has ruled against laws deemed “barriers to free trade.” It has forced Japan to accept greater pesticide residues in imported food. It has kept Guatemala from outlawing deceptive advertising of baby food. It has eliminated the ban in various countries on asbestos, and on fuel-economy and emission stan­dards for motor vehicles. And it has ruled against marine-life protection laws and the ban on endangered-species products. The European Union’s prohibition on the importation of hormone-ridden U.S. beef had overwhelming popular support throughout Europe, but a three-member WTO panel decided the ban was an illegal restraint on trade. The decision on beef put in jeopardy a host of other food import regulations based on health concerns. The WTO overturned a portion of the U.S. Clean Air Act banning certain additives in gasoline because it interfered with imports from foreign refineries. And the WTO overturned that portion of the U.S. Endangered Species Act forbidding the import of shrimp caught with nets that failed to protect sea turtles.[iii]

Free trade is not fair trade; it benefits strong nations at the expense of weaker ones, and rich interests at the expense of the rest of us. Globalization means turning the clock back on many twentieth-century reforms: no freedom to boycott products, no prohibitions against child labor, no guaranteed living wage or benefits, no public services that might conceivably compete with private services, no health and safety protections that might cut into corporate profits.[iv]

GATT and subsequent free trade agreements allow multinationals to impose monopoly property rights on indigenous and communal agriculture.
In this way agribusiness can better penetrate locally self-sufficient communities and monopolize their resources.
Ralph Nader gives the example of the neem tree, whose extracts contain natural pesti­cidal and medicinal proper­ties.
Cultivat­ed for centuries in India, the tree attracted the attention of vari­ous pharmaceutical companies, who filed monopoly patents, causing mass protests by Indian farmers. As dictated by the WTO, the pharmaceuticals now have exclusive control over the marketing of neem tree products, a ruling that is being reluctantly enforced in India.
Tens of thousands of erstwhile independent farmers must now work for the powerful pharmaceuticals on profit-gorging terms set by the companies.

A trade agreement between India and the United States, the Knowledge Initiative on Agriculture (KIA), backed by Monsanto and other transnational corporate giants, allows for the grab of India’s seed sector by Monsanto, its trade sector by Archer Daniels Midland and Cargill, and its retail sector by Wal-Mart. (Wal-Mart announced plans to open 500 stores in India, starting in August 2007.)
This amounts to a war against India’s independent farmers and small businesses, and a threat to India’s food security.
Farmers are organizing to protect themselves against this economic invasion by maintaining traditional seed-banks and setting up systems of communal agrarian support.
One farmer says, “We do not buy seeds from the market because we suspect they may be contaminated with genetically engineered or terminator seeds.”[v]

In a similar vein, the WTO ruled that the U.S. corporation RiceTec has the patent rights to all the many varieties of basmati rice, grown for centuries by India’s farmers.
It also ruled that a Japanese corporation had exclusive rights in the world to grow and produce curry powder. As these instances demonstrate, what is called “free trade” amounts to international corporate monopoly control.
Such developments caused Malaysian prime minister Mahathir Mohamad to observe:

We now have a situation where theft of genetic resources by western biotech TNCs [transnational corporations] enables them to make huge profits by producing patented genetic mutations of these same materials. What depths have we sunk to in the global marketplace when nature’s gifts to the poor may not be protected but their modifications by the rich become exclusive property?

If the current behaviour of the rich countries is anything to go by, globalization simply means the breaking down of the borders of countries so that those with the capital and the goods will be free to dominate the markets.[vi]

Under free-trade agreements like General Agreements on Trade and Services (GATS) and Free Trade Area of the Americas (FTAA), all public services are put at risk. A public service can be charged with causing “lost market opportunities” for business, or creating an unfair subsidy.

To offer one in­stance: the single-payer automobile insurance program proposed by the province of Ontario, Canada, was declared “unfair competi­tion.” Ontario could have its public auto insurance only if it paid U.S. insurance companies what they estimated would be their present and future losses in Ontario auto insurance sales, a prohibitive cost for the province.
Thus the citizens of Ontario were not allowed to exercise their democratic sovereign right to institute an alterna­tive not-for-profit auto insurance system. In another case, United Postal Service charged the Canadian Post Office for “lost market opportunities,” which means that under free trade accords, the Canadian Post Office would have to compensate UPS for all the business that UPS thinks it would have had if there were no public postal service. The Canadian postal workers union has challenged the case in court, arguing that the agreement violates the Canadian Constitution.

Under NAFTA, the U.S.-based Ethyl Corporation sued the Canadian government for $250 million in “lost business opportunities” and “interference with trade” because Canada banned MMT, an Ethyl-produced gasoline additive considered carcinogenic by Canadian officials. Fearing they would lose the case, Canadian officials caved in, agreeing to lift the ban on MMT, pay Ethyl $10 million compensation, and issue a public statement calling MMT “safe,” even though they had scientific findings showing otherwise. California also banned the unhealthy additive; this time a Canadian based Ethyl company sued California under NAFTA for placing an unfair burden on free trade.[vii]

International free trade agreements like GATT and NAFTA have hastened the corporate acquisition of local markets, squeezing out smaller businesses and worker collectives. Under NAFTA better-paying U.S. jobs were lost as firms closed shop and contracted out to the cheaper Mexican labor market. At the same time thousands of Mexican small companies were forced out of business. Mexico was flooded with cheap, high-tech, mass produced corn and dairy products from giant U.S. agribusiness firms (themselves heavily subsidized by the U.S. government), driving small Mexican farmers and distributors into bankruptcy, displacing large numbers of poor peasants. The lately arrived U.S. companies in Mexico have offered extremely low-paying jobs, and unsafe work conditions. Generally free trade has brought a dramatic increase in poverty south of the border.[viii]

We North Americans are told that to remain competitive in the new era of globalization, we will have to increase our output while reducing our labor and production costs, in other words, work harder for less. This in fact is happening as the work-week has lengthened by as much as twenty percent (from forty hours to forty-six and even forty-eight hours) and real wages have flattened or declined during the reign of George W. Bush. Less is being spent on social services, and we are enduring more wage conces­sions, more restructuring, deregula­tion, and privat­ization. Only with such “adjustments,” one hears, can we hope to cope with the impersonal forces of globalization that are sweeping us along.

In fact, there is nothing impersonal about these forces. Free trade agreements, including new ones that have not yet been submitted to the U.S. Congress have been consciously planned by big business and its government minions over a period of years in pursuit of a deregulated world economy that undermines all democratic checks upon business practices. The people of any one province, state, or nation are now finding it increasingly difficult to get their govern­ments to impose protective regulations or develop new forms of public sector production out of fear of being overruled by some self-appointed international free-trade panel.[ix]

Usually it is large nations demanding that poorer smaller ones relinquish the protections and subsidies they provide for their local producers. But occasionally things may take a different turn. Thus in late 2006 Canada launched a dispute at the World Trade Organization over the use of “trade-distorting” agricultural subsidies by the United States, specifically the enormous sums dished out by the federal government to U.S. agribusiness corn farmers. The case also challenged the entire multibillion-dollar structure of U.S. agricultural subsidies. It followed the landmark WTO ruling of 2005 which condemned “trade-distorting” aid to U.S. cotton farmers. A report by Oxfam International revealed that at least thirty-eight developing countries were suffering severely as a result of trade distorting subsidies by both the United States and the European Union. Meanwhile, the U.S. government was manoeuvring to insert a special clause into trade negotiations that would place its illegal use of farm subsidies above challenge by WTO member countries and make the subsidies immune from adjudication through the WTO dispute settlement process.[x]

What is seldom remarked upon is that NAFTA and GATT are in violation of the U.S. Constitution, the preamble of which makes clear that sovereign power rests with the people: “We the People of the United States . . . do ordain and establish this Constitution for the United States of America.” Article I, Section 1 of the Constitution reads; “All legislative Powers herein granted shall be vested in a Congress of the United States.” Article I, Section 7 gives the president (not some trade council) the power to veto a law, subject to being overridden by a two-thirds vote in Congress. And Article III gives adjudication and review powers to a Supreme Court and other federal courts as ordained by Congress.

The Tenth Amendment to the Constitution states:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

There is nothing in the entire Constitution that allows an international trade panel to preside as final arbiter exercising supreme review powers undermining the constitutionally mandated decisions of the legislative, executive, and judicial branches.

True, Article VII says that the Constitution, federal laws, and treaties “shall be the supreme Law of the land,” but certainly this was not intended to include treaties that overrode the laws themselves and the sovereign democratic power of the people and their representatives.

To exclude the Senate from deliberations, NAFTA and GATT were called “agreements” instead of treaties, a semantic ploy that enabled President Clinton to bypass the two-third treaty ratification vote in the Senate and avoid any treaty amendment process. The World Trade Organization was approved by a lame-duck session of Congress held after the 1994 elections. No one running in that election uttered a word to voters about putting the U.S. government under a perpetual obligation to insure that national laws do not conflict with international free trade rulings.

What is being undermined is not only a lot of good laws dealing with environment, public services, labor standards, and consumer protection, but also the very right to legislate such laws. Our democratic sovereignty itself is being surrendered to a secretive plutocratic trade organization that presumes to exercise a power greater than that of the people and their courts and legislatures. What we have is an international coup d’état by big capital over the nations of the world.

Globalization is a logical extension of imperialism, a victory of empire over republic, international finance capital over local productivity and nation-state democracy (such as it is). In recent times however, given popular protests, several multilateral trade agreements have been stalled or voted down. In 1999, militant protests against free trade took place in forty-one nations from Britain and France to Thailand and India.[xi] In 2000-01, there were demonstrations in Seattle, Washington, Sydney, Prague, Genoa, and various other locales. In 2003-04 we saw the poorer nations catching wise to the free trade scams and refusing to sign away what shreds of sovereignty they still had. Along with the popular resistance, more national leaders are thinking twice before signing on to new trade agreements.

The discussion of globalization by some Marxists (but not all) has focused on the question of whether the new “internationalization” of capital will undermine national sovereignty and the nation state. They dwell on this question while leaving unmentioned such things as free trade agreements and the WTO. Invariably these observers (for instance Ellen Wood and William Taab in Monthly Review, Ian Jasper in Nature, Society and Thought, Erwin Marquit in Political Affairs) conclude that the nation state still plays a key role in capitalist imperialism, that capital-while global in its scope–is not international but bound to particular nations, and that globalization is little more than another name for overseas monopoly capital investment.

They repeatedly remind us that Marx had described globalization, this process of international financial expansion, as early as 1848, when he and Engels in the Communist Manifesto wrote about how capitalism moves into all corners of the world, reshaping all things into its own image. Therefore, there is no cause for the present uproar. Globalization, these writers conclude, is not a new development but a longstanding one that Marxist theory uncovered long ago.

The problem with this position is that it misses the whole central point of the current struggle. It is not only national sovereignty that is at stake, it is democratic sovereignty. Millions, of people all over the world have taken to the streets to protest free trade agreements. Among them are farmers, workers, students and intellectuals (including many Marxists who see things more clearly than the aforementioned ones), all of whom are keenly aware that something new is afoot and they want no part of it. As used today, the term globalization refers to a new stage of international expropriation, designed not to put an end to the nation-state but to undermine whatever democratic right exists to protect the social wage and restrain the power of transnational corporations.

The free trade agreements, in effect, make unlawful all statutes and regulations that restrict private capital in any way. Carried to full realization, this means the end of whatever imperfect democratic protections the populace has been able to muster after generations of struggle in the realm of public policy. Under the free trade agreements any and all public services can be ruled out of existence because they cause “lost market opportunities” for private capital. So too public hospitals can be charged with taking away markets from private hospitals; and public water supply systems, public schools, public libraries, public housing and public transportation are guilty of depriving their private counterparts of market opportunities, likewise public health insurance, public mail delivery, and public auto insurance systems.

Laws that try to protect the environment or labor standards or consumer health already have been overthrown for “creating barriers” to free trade.

What also is overthrown is the right to have such laws. This is the most important point of all and the one most frequently overlooked by persons from across the political spectrum. Under the free trade accords, property rights have been elevated to international supremacy, able to take precedent over all other rights, including the right to a clean livable environment, the right to affordable public services, and the right to any morsel of economic democracy. Instead a new right has been accorded absolutist status, the right to corporate private profit. It has been used to stifle the voice of working people and their ability to develop a public sector that serves their interests.

Free speech itself is undermined as when “product disparagement” is treated as an interference with free trade. And nature itself is being monopolized and privatized by transnational corporations.

So the fight against free trade is a fight for the right to politico-economic democracy, public services, and a social wage, the right not to be completely at the mercy of big capital. It is a new and drastic phase of the class struggle that some Marxists–so immersed in classical theory and so ill-informed about present-day public policy–seem to have missed. As embodied in the free trade accords, globalization has little to do with trade and is anything but free. It benefits the rich nations over poor ones, and the rich classes within all nations at the expense of ordinary citizens. It is the new specter that haunts the same old world.

Michael Parenti’s recent books include The Assassination of Julius Caesar (New Press), Superpatriotism (City Lights), and The Culture Struggle (Seven Stories Press). For more information visit: www.michaelparenti.org.


© 2007 Michael Parenti

[i] Quoted in New York Times, May 21, 1989.[ii] See Lori Wallach and Michelle Sforza, The WTO (New York: Seven Stories Press, 2000); and John R. MacArthur, The Selling of Free Trade: Nafta, Washington, and the Subversion of American Democracy (New York: Hill and Wang, 2000).

[iii] New York Times, April 30, 1996 and May 9, 1997;Washington Post, October 13, 1998.

[iv] See the report by the United Nations Development Program referenced in New York Times, July 13, 1999.

[v] Project Censored, “Real News,” April 2007; also Arun Shrivastava, “Genetically Modified Seeds: Women in India take on Monsanto,” Global Research, October 9, 2006.

[vi] Quoted in People’s Weekly World, December 7, 1996.

[vii] John R. MacArthur, The Selling of “Free Trade”: NAFTA, Washington, and the Subversion of American Democracy (New York: Hill & Wang, 2000; and Sarah Anderson and John Cavanagh, “Nafta’s Unhappy Anniversary,” New York Times, February 7, 1995.

[viii] John Ross, “Tortilla Wars,” Progressive, June 1999

[ix] For a concise but thorough treatment, see Steven Shrybman, A Citizen’s Guide

to the World Trade Organization (Ottawa/Toronto: Canadian Center for Policy

Alternatives and James Lorimer & Co., 1999).

[x] “US seeks “get-out clause” for illegal farm payments” Oxfam, June 29, 2006,

http://www.oxfam.org/en/news/
pressreleases2006/pr060629_wto_geneva

[xi] San Francisco Chronicle, June 19, 1999.

 

 

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One you doesn’t need to be a Professor to realise that we’re in deep sh*t. But if you ever needed it explained just “How Deep”,  Prof. Steve Keen is the guy to do it. Empirical data trumps theories built on sand any day, however, the economies of the western world are based on a failed neoclassical model, and the ideology of austerity is a busted flush!

 

Prof. Steve Keen – Published on Sep 23, 2016

Some papers that are remarkably critical of mainstream economics have been published recently, not by the usual suspects like myself, but by prominent mainstream economists:
ex-Minneapolis Fed Chairman Narayana Kocherlokata,
ex-IMF Chief Economist Olivier Blanchard, and
current World Bank Chief Economist Paul Romer.

I discuss these papers in a tongue-in-cheek introduction to another key problems of unrealism in economics — the absence of any role for energy in both Post Keynesian and Neoclassical production functions.

I also address Olivier Blanchard’s desire for a “widely accepted analytical macroeconomic core”, explain the role of credit in aggregate demand and income, and identify the countries most likely to face a credit crunch in the near future.

I gave this talk to staff and students of the EPOG program at the University of Paris 13 on Friday September 23rd.

5 years ago spoke at Occupy Sydney. The day before terrorists attacked the Occupy Protestors.


The Modern Debt Jubilee

Bill Buckler, author of The Privateer http://www.zerohedge.com/news/modern-debt-jubilee 

The modern “debt jubilee” is characterised as “quantitative easing for the public”.

It has been boiled down to a procedure where the central bank does not create new money by buying the sovereign debt of the government.

Instead, it takes an arbitrary number, writes a cheque for that number, and deposits it in the bank account of every individual in the nation.
Debtors must use the newly-created money to pay down or pay off debt.
Those who are not in debt can use it as a free windfall to spend or “invest” as they see fit.
This, it is said, is the only way left to restart economic “growth” and finally get the spectre of unending financial crisis out of the headlines.
It is the latest of a long string of “print to cover” remedies.

The major selling feature of this “method” is that it provides the only sure means out of what is called the global “deleveraging trap”.
This is the trap which is said to have ensnared Japan more than two decades ago and which has now snapped shut on the whole world.

And what is a “deleveraging trap”?
It is simply the obligation assumed when one becomes a debtor.
This is the necessity to repay the debt.

There are only three ways in which a debt can be honestly repaid.

  • It can be repaid with new wealth which the proceeds of the debt made it possible to create.
  • It can be repaid by an excess of production over consumption on the part of the debtor.
  • Or it can be repaid from already existing savings.

If none of those methods are feasible, the debt cannot be repaid.
It can be defaulted upon or the means of “payment” can be created out of thin air, but that does not “solve” the problem, it merely makes it worse.

The “deleveraging trap”, so called, is merely a rebellion against the fact that you can’t have your cake and eat it too. So is the genesis of the entire GFC.

Debt can always be extinguished by means of an arbitrarily created means of payment. But calling that process QE or a Debt Jubilee doesn’t (or shouldn’t) mask its essence, which is simple and straightforward debt repudiation.

(A “debt jubilee” is the latest attempt to make a silk purse out of a sow’s ear. It is the latest pretence that we CAN print our way to prosperity, but only if we do it in the “right” way.)


Glossary of economic terms: http://www.zerohedge.com/taxonomy_vtn/voc/3


A superb piece from George Monbiot, covering a lot of ground about a system that some people are not even aware exists. It is important that people start to wake up to the this. We are sleep walking our way towards disaster, be it climate change, economic and social collapse or catastrophic war.


Neoliberalism – the ideology at the root of all our problems

Financial meltdown, environmental disaster and even the rise of Donald Trump – neoliberalism has played its part in them all. Why has the left failed to come up with an alternative?

Ronald Reagan and Margaret Thatcher at the White House.

 

Imagine if the people of the Soviet Union had never heard of communism.

The ideology that dominates our lives has, for most of us, has no name.
Mention it in conversation and you’ll be rewarded with a shrug.
Even if your listeners have heard the term before, they will struggle to define it.

Neoliberalism: do you know what it is?
Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises:
the financial meltdown of 2007‑8,
the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse,
the slow collapse of public health and education,
resurgent child poverty,
the epidemic of loneliness,
the collapse of ecosystems,
the rise of Donald Trump.

But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name.

What greater power can there be than to operate namelessly?

So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers.
Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone.
Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it.

The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.

  • Never mind structural unemployment: if you don’t have a job it’s because you are unenterprising.
  • Never mind the impossible costs of housing: if your credit card is maxed out, you’re feckless and improvident.
  • Never mind that your children no longer have a school playing field: if they get fat, it’s your fault.

In a world governed by competition, those who fall behind become defined and self-defined as losers. Among the results, as Paul Verhaeghe documents in his book What About Me? are epidemics of self-harm, eating disorders, depression, loneliness, performance anxiety and social phobia.

Perhaps it’s unsurprising that Britain, in which neoliberal ideology has been most rigorously applied, is the loneliness capital of Europe. We are all neoliberals now.

The term neoliberalism was coined at a meeting in Paris in 1938.

Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control.
Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

With their help, he began to create what Daniel Stedman Jones describes in Masters of the Universe as “a kind of neoliberal international”: a transatlantic network of academics, businessmen, journalists and activists.

The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute. They also financed academic positions and departments, particularly at the universities of Chicago and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that governments should regulate competition to prevent monopolies from forming gave way – among American apostles such as Milton Friedman – to the belief that monopoly power could be seen as a reward for efficiency.

Something else happened during this transition: the movement lost its name. In 1951, Friedman was happy to describe himself as a neoliberal. But soon after that, the term began to disappear. Stranger still, even as the ideology became crisper and the movement more coherent, the lost name was not replaced by any common alternative.

At first, despite its lavish funding, neoliberalism remained at the margins. The postwar consensus was almost universal: John Maynard Keynes’s economic prescriptions were widely applied, full employment and the relief of poverty were common goals in the US and much of western Europe, top rates of tax were high and governments sought social outcomes without embarrassment, developing new public services and safety nets.

But in the 1970s, when Keynesian policies began to fall apart and economic crises struck on both sides of the Atlantic, neoliberal ideas began to enter the mainstream. As Friedman remarked, “when the time came that you had to change … there was an alternative ready there to be picked up”.
With the help of sympathetic journalists and political advisers, elements of neoliberalism, especially its prescriptions for monetary policy, were adopted by Jimmy Carter’s administration in the US and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the package soon followed:
massive tax cuts for the rich,
the crushing of trade unions,
deregulation,
privatisation,
outsourcing and
competition in public services.
Through the IMF, the World Bank, the Maastricht treaty and the World Trade Organisation, neoliberal policies were imposed – often without democratic consent – on much of the world.

Most remarkable was its adoption among parties that once belonged to the left: Labour and the Democrats, for example. As Stedman Jones notes, “it is hard to think of another utopia to have been as fully realised.”

It may seem strange that a doctrine promising choice and freedom should have been promoted with the slogan “there is no alternative”.
But, as Hayek remarked on a visit to Pinochet’s Chile – one of the first nations in which the programme was comprehensively applied –

“my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism”.

The freedom that neoliberalism offers, which sounds so beguiling when expressed in general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means;
the freedom to suppress wages.
Freedom from regulation means the freedom to poison rivers,
endanger workers,
charge iniquitous rates of interest and
design exotic financial instruments.
Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty.

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists advocated the use of crises to impose unpopular policies while people were distracted: for example, in the aftermath of Pinochet’s coup, the Iraq war and Hurricane Katrina, which Friedman described as; “an opportunity to radically reform the educational system” in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are imposed internationally, through trade treaties incorporating “investor-state dispute settlement”: offshore tribunals in which corporations can press for the removal of social and environmental protections.

When parliaments have voted to restrict sales of cigarettes, protect water supplies from mining companies, freeze energy bills or prevent pharmaceutical firms from ripping off the state, corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies upon universal quantification and comparison. The result is that workers, job-seekers and public services of every kind are subject to a pettifogging, stifling regime of assessment and monitoring, designed to identify the winners and punish the losers.
The doctrine that Von Mises proposed would free us from the bureaucratic nightmare of central planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly became one. Economic growth has been markedly slower in the neoliberal era (since 1980 in Britain and the US) than it was in the preceding decades; but not for the very rich.
Inequality in the distribution of both income and wealth, after 60 years of decline, rose rapidly in this era, due to the smashing of trade unions, tax reductions, rising rents, privatisation and deregulation.

The privatisation or marketisation of public services such as energy, water, trains, health, education, roads and prisons has enabled corporations to set up tollbooths in front of essential assets and charge rent, either to citizens or to government, for their use. Rent is another term for unearned income.
When you pay an inflated price for a train ticket, only part of the fare compensates the operators for the money they spend on fuel, wages, rolling stock and other outlays.
The rest reflects the fact that they have you over a barrel.

Those who own and run the UK’s privatised or semi-privatised services make stupendous fortunes by investing little and charging much. In Russia and India, oligarchs acquired state assets through firesales. In Mexico, Carlos Slim was granted control of almost all landline and mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich, has had a similar impact. “Like rent,” he argues, “interest is … unearned income that accrues without any effort”.
As the poor become poorer and the rich become richer, the rich acquire increasing control over another crucial asset: money.
Interest payments, overwhelmingly, are a transfer of money from the poor to the rich.
As property prices and the withdrawal of state funding load people with debt (think of the switch from student grants to student loans), the banks and their executives clean up.

Sayer argues that the past four decades have been characterised by a transfer of wealth not only from the poor to the rich, but within the ranks of the wealthy: from those who make their money by producing new goods or services to those who make their money by controlling existing assets and harvesting rent, interest or capital gains.
Earned income has been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only are the banks too big to fail, but so are the corporations now charged with delivering public services. As Tony Judt pointed out in Ill Fares the Land, Hayek forgot that vital national services cannot be allowed to collapse, which means that competition cannot run its course.
Business takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes.
Governments use neoliberal crises as both excuse and opportunity to;
cut taxes,
privatise remaining public services,
rip holes in the social safety net,
deregulate corporations and
re-regulate citizens.

The self-hating state now sinks its teeth into every organ of the public sector. Perhaps the most dangerous impact of neoliberalism is not the economic crises it has caused, but the political crisis.
As the domain of the state is reduced, our ability to change the course of our lives through voting also contracts.
Instead, neoliberal theory asserts, “people can exercise choice through spending”.
But some have more to spend than others: in the great consumer or shareholder democracy, votes are not equally distributed. The result is a disempowerment of the poor and middle.
As parties of the right and former left adopt similar neoliberal policies, disempowerment turns to disenfranchisement.
Large numbers of people have been shed from politics.

Chris Hedges remarks that;

“fascist movements build their base not from the politically active but the politically inactive, the ‘losers’ who feel, often correctly, they have no voice or role to play in the political establishment”.

When political debate no longer speaks to us, people become responsive instead to slogans, symbols and sensation. To the admirers of Trump, for example, facts and arguments appear irrelevant.

Judt explained that when the thick mesh of interactions between people and the state has been reduced to nothing but authority and obedience, the only remaining force that binds us is state power.
The totalitarianism Hayek feared is more likely to emerge when governments, having lost the moral authority that arises from the delivery of public services, are reduced to “cajoling, threatening and ultimately coercing people to obey them”.

Like communism, neoliberalism is the God that failed.
But the zombie doctrine staggers on, and one of the reasons is its anonymity. Or rather, a cluster of anonymities.

The invisible doctrine of the invisible hand is promoted by invisible backers. Slowly, very slowly, we have begun to discover the names of a few of them. We find that the Institute of Economic Affairs, which has argued forcefully in the media against the further regulation of the tobacco industry, has been secretly funded by British American Tobacco since 1963. We discover that Charles and David Koch, two of the richest men in the world, founded the institute that set up the Tea Party movement.
We find that Charles Koch, in establishing one of his thinktanks, noted that
“in order to avoid undesirable criticism, how the organisation is controlled and directed should not be widely advertised”.

The words used by neoliberalism often conceal more than they elucidate. “The market” sounds like a natural system that might bear upon us equally, like gravity or atmospheric pressure. But it is fraught with power relations.
What “the market wants” tends to mean what corporations and their bosses want.

“Investment”, as Sayer notes, means two quite different things.

One is the funding of productive and socially useful activities,
the other is the purchase of existing assets to milk them for rent, interest, dividends and capital gains.

Using the same word for different activities “camouflages the sources of wealth”, leading us to confuse wealth extraction with wealth creation.

A century ago, the nouveau riche were disparaged by those who had inherited their money. Entrepreneurs sought social acceptance by passing themselves off as rentiers. Today, the relationship has been reversed: the rentiers and inheritors style themselves entrepreneurs. They claim to have earned their unearned income.

These anonymities and confusions mesh with the namelessness and placelessness of modern capitalism:

The anonymity of neoliberalism is fiercely guarded.
Those who are influenced by Hayek, Mises and Friedman tend to reject the term, maintaining – with some justice – that it is used today only pejoratively. But they offer us no substitute.
Some describe themselves as classical liberals or libertarians, but these descriptions are both misleading and curiously self-effacing, as they suggest that there is nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s classic work, Capitalism and Freedom.

For all that, there is something admirable about the neoliberal project, at least in its early stages. It was a distinctive, innovative philosophy promoted by a coherent network of thinkers and activists with a clear plan of action. It was patient and persistent. The Road to Serfdom became the path to power.

 

(I have shared this important article under “fair use”, with full recognition to the author)

Vice News article: By Samuel Oakford April 19, 2016 | 8:05 pm

https://news.vice.com/article/ungass-portugal-what-happened-after-decriminalization-drugs-weed-to-heroin

As diplomats gather at the United Nations in New York this week to consider the future of global drug policy, one Portuguese official, João Goulão, will likely command attention that far outstrips his country’s influence in practically any other area. That’s because 16 years ago, Portugal took a leap and decriminalized the possession of all drugs — everything from marijuana to heroin. By most measures, the move has paid off.

Today, Portuguese authorities don’t arrest anyone found holding what’s considered less than a 10-day supply of an illicit drug — a gram of heroin, ecstasy, or amphetamine, two grams of cocaine, or 25 grams of cannabis. Instead, drug offenders receive a citation and are ordered to appear before so- called “dissuasion panels” made up of legal, social, and psychological experts. Most cases are simply suspended. Individuals who repeatedly come before the panels may be prescribed treatment, ranging from motivational counselling to opiate substitution therapy.

“We had a lot of criticism at first,” recalled Goulão, a physician specializing in addiction treatment whose work led Portugal to reform its drug laws in 2000, and who is today its national drug coordinator. After decriminalizing, the first inquiries Portugal received from the International Narcotics Control Board — the quasi-judicial UN oversight body established by the UN drug convention system — were sharp and scolding.

“Now things have changed completely,” he went on. “We are pointed to as an example of best practices inside the spirit of the conventions.” Indeed, Werner Sipp, the new head of the board, said as much at the UN’s Commission on Narcotic Drugs in Vienna earlier this year.

‘It was the combination of the law and these services that made it a success. It’s very difficult to find people in Portugal who disagree with this model.’

Though often narrowly assessed in reference to its decriminalization law, Portugal’s experience over the last decade and a half speaks as much to its free public health system, extensive treatment programs, and the hard to quantify trickle down effects of the legislation. In a society where drugs are less stigmatized, problem users are more likely to seek out care. Police, even if they suspect someone of using drugs, are less likely to bother them. Though at least 25 countries have introduced some form of decriminalization, Portugal’s holistic model and its use of dissuasion panels sets it apart.

The rate of new HIV infections in Portugal has fallen precipitously since 2001, the year its law took effect, declining from 1,016 cases to only 56 in 2012. Overdose deaths decreased from 80 the year that decriminalization was enacted to only 16 in 2012.

In the US, by comparison, more than 14,000 people died in 2014 from prescription opioid overdoses alone. Portugal’s current drug-induced death rate, three per million residents, is more than five times lower than the European Union’s average of 17.3, according to EU figures ( http://www.emcdda.europa.eu/attachements.cfm/att_239505_EN_TDAT15001ENN.pdf).

Related: Here’s What to Expect at the Big Drug Meeting This Week at the UN

When Portugal decided to decriminalize in 2000, many skeptics assumed that the number of users would skyrocket. That did not happen. With some exceptions, including a marginal increase among adolescents, drug use has fallen over the past 15 years and now ebbs and flows within overall trends in Europe. Portuguese officials estimate that by the late 1990s roughly one percent of Portugal’s population, around 100,000 people, were heroin users.

Today, “we estimate that we have 50,000, most of them under substitution treatment,” said Goulão before adding that he’s recently seen a small uptick in use of the drug, predominantly among former addicts that got clean. This reflects Portugal’s tenuous economic condition, he contends.

“People use drugs for one of two reasons — either to potentiate pleasures or relieve unpleasure — and the types of drugs and the type of people who use drugs carries a lot according to the conditions of life in the country,” he remarked.

Parallel harm reduction measures, such as needle exchanges and opioid substitution therapy using drugs like methadone and buprenorphine, he said, serve as a cushion to prevent the spread of communicable diseases and a rise in overdoses even if the number of users injecting heroin happens to increase for a period of time.

“I think harm reduction is not giving up on people,” said Goulão. “I think it is respecting their timings and assuming that even if someone is still using drugs, that person deserves the investment of the state in order to have a better and longer life.”

Such statements, once considered radical, are becoming more appealing to drug officials in other countries. Decriminalization and harm reduction lends greater attention to the human rights of users while allowing law enforcement resources to be spent elsewhere. And though it’s a major shift, Portuguese decriminalization is not a revolution in terms of international law.

Drugs are still illegal in Portugal, drug dealers and traffickers are still sent to jail, and the country has carefully kept itself within the confines of the UN’s drug convention system that inform national drug laws. For decades the three treaties were seen as prescribing jail time for users, but experts have long contended — and governments now increasingly recognize — that they give countries wide latitude in how to treat and police users.

When Portugal decriminalized, UN member states were just years removed from a 1998 special session of the General Assembly that convened under the fanciful pretext of eliminating drug use worldwide. On Tuesday, member states adopted a new outcome document that is meant to reposition drug policy. It stops short of what many advocates would have liked, excluding the actual words “harm reduction” while failing to address the death penalty for drug offenders, which member states noted repeatedly on Tuesday. The document reflects both an evolution in drug policy in many parts of the world over the last two decades, but is also a testament to the continued influence of conservative countries that still favour interdiction.

Related: How Russia Became the New Global Leader in the War on Drugs

Goulão himself is skeptical of some aspects of marijuana reform in places like the United States, which he says can conflate medical use with recreational markets. “Sometimes I feel the promoters of this discussion are mixing things together using a lack of intellectual seriousness,” he said.

Though heroin use is often highlighted to show the efficacy of Portugal’s model, today most users that come before panels are in fact caught with either hashish or cannabis, said Nuno Capaz, a sociologist who serves on Lisbon’s dissuasion panel. Between 80 to 85 percent of all people who report to the panels are first-time offenders and deemed to be recreational users, meaning their cases are suspended.

For those who have been repeatedly caught or are identified as addicts, the panels can order sanctions or treatment. Recreational users may face fines or be ordered to provide community service. If an addict refuses treatment, they are required to check in regularly with their “family doctor” — the medical professional in the person’s locality that provides checkups and other services to them under Portugal’s free national healthcare program. Such a close, pre-existing relationship between medical professionals and Portuguese residents is another feature of the model, and one that could be hard to replicate in a country like the US.

“If the person doesn’t show up at the doctor, we ask the police to personally hand them a notification so they know they are supposed to be in a specific place,” said Capaz. “The important part is to maintain the connection to the treatment system.”

The role of police coordinating with health officials to ensure treatment demonstrates the altered relationship between them and drug users over the past decade and a half, and one that contrasts dramatically with how police orient themselves in countries like the US.

“This small change actually makes a huge change in terms of police officers’ work,” said Capaz, referring to decriminalization. “Of course every police officer knows where people hang out to smoke joints. If they wanted to they would just go there and pick up the same guy over and over. That doesn’t happen.”

Working in parallel to government efforts, non-profit groups play a role in providing clean needles and even distributing crack pipes as a way to entice drug users into the network of state service providers.

Ricardo Fuertes, project coordinator at GAT, an outreach organization founded by people living with HIV, works at one of the group’s drop-in centers, nestled in a residential building in Lisbon. The location, he says, is a sign of the decrease in stigma towards drug use.

“It’s very obvious that it’s a place for people who use drugs. It’s very open, but we don’t have complaints,” said Fuertes, referring to the drop-in center. “The general population even comes to get tests done. I think it shows this isn’t a ghetto service.”

But care and outreach providers and the people they help have felt the pinch of Portugal’s economic troubles. In 2011, the country was bailed out by the European Union and the IMF, and later passed austerity measures that imposed considerable cuts on public services.

Related: Here’s How Zero-Tolerance Drug Policies Have Damaged Public Health Worldwide

Goulão said that drug treatment programs have been relatively insulated, but funds for job programs that could help employers pay the wages of drug users were decreased. Fuertes went a bit further, saying that some providers have had to lower costs. He explained that government funding may be allocated only for a year at a time, making long-term planning difficult.

“It’s not easy for many people, and of course people who use drugs are not the exception,” he said. “We see many of our clients facing very difficult situations.”

Portuguese health workers refer to Greece as a cautionary tale. Wracked by a budgetary crisis and the austerity conditions of repeated bailouts, Greece experienced an explosion of HIV transmission rates after budget cuts left health programs drastically underfunded. According to EU figures, only Greece and Latvia experienced larger cuts than Portugal to its public health services between the period of 2005 to 2007 and 2009 to 2012.

And yet Portugal experienced no discernable rise in HIV transmission — the cushion effect in action.

“Usually the focus is on the decriminalization itself, but it worked because there were other services, and the coverage increased for needle replacement, detox, therapeutic communities, and employment options for people who use drugs,” said Fuertes. “It was the combination of the law and these services that made it a success. It’s very difficult to find people in Portugal who disagree with this model.”

In the run-up to the UN General Assembly’s special session, Goulão cautioned that countries had to consider their own domestic environments first in learning from Portugal’s experience.

“We don’t assume that this is the silver bullet, but in my view it has been very important because it introduced coherence into the whole system,” he said. “If our responses are based in the idea that we talking about addiction, that we are talking about chronic disease, talking about a health issue — to have it out of the penal system is a clear improvement. It was really important for our society because it allowed us to drop the stigma.”

Follow Samuel Oakford on Twitter: @samueloakford

 

If the largest appropriators of the planet’s wealth want to pose as grand philanthropists, should NGOs really line up to take their cash?

I am reblogging this from here:

I thought it complemented a blog item I posted here highlighted by Renzo Martens at this year’s Artes Mundi exhibition – “The Institute Of Human Activities”.

the business of charity

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NGOs are no longer seen as the blameless agents of benevolence. By Dinyar Godrej / newint.org

Witness the growth spurt in non-governmental organizations (NGOs) and you would be forgiven for thinking the world becomes a more caring place every day.

These legions of not-for-profit groupings that fan out across the world, intent on ‘capacity building’, ‘reducing poverty’ and ensuring that the ‘voices of the most marginalized’ are heard, surely reflect an acceptance that too many have suffered for too long, and the tide can turn with the right kind of wind behind it.

History, however, teaches us that the exact opposite may be true.

Whereas organized charities go back over 100 years, the term non-governmental organization is more recent, dating to the formation of the United Nations in 1945, when a select club of international non-state agencies were awarded observer status to some of its meetings. The common factor uniting this group, apart from the fact that they were neither government agencies nor businesses in the traditional sense, is that they would have an avowed mission to work for a social good – whether it was as torchbearers for human rights, the environment or just old-fashioned ‘development’ (a new-fangled idea back then).

Fast forward a few decades and we witness an explosion of NGOs. The spur was the rise of neoliberal ideology, eventually enshrined in the Reagan-Thatcher years. Predatory capitalism and the so-called free market were the answer; government needed to be hands-off with regard to all notions of public provision (healthcare, education, the lot).

Increasingly, governments began looking to NGOs to provide cheap services, a role that continues to grow with austerity policies. However, rarely does government funding to NGOs match the scale of the cuts. Aid to ‘developing’ nations also began increasingly to be funnelled via NGOs rather than through government organs – between 1975 and 1985 the amount of aid taking this NGO route shot up by 1,400 per cent.1

With the fragmentation of the Left under the neoliberal attack, much of the energy that could have gone into fighting the power went into forming the NGO – they became repositories of a residual idealism still reeling from the onslaught.

Arundhati Roy describes the transformation achieved:

‘Armed with their billions, these NGOs have waded into the world, turning potential revolutionaries into salaried activists, funding artists, intellectuals and filmmakers, gently luring them away from radical confrontation.’2

Today, 30 new ones are formed every day in Britain; and there are 1.5 million in the USalone.3 Fully 90 per cent of currently existing NGOs have been launched since 1975.4Roy calls them ‘an indicator species’, saying: ‘It’s almost as though the greater the devastation caused by neoliberalism, the greater the outbreak of NGOs.’5

Partnership or challenge?

Along with governments and corporations, the two torrents of power in the global landscape, NGOs are seen as a third force. Indeed, the big international ones – the BINGOs – with budgets of hundreds of millions of dollars are pretty powerful. But are they a countervailing force, striving tirelessly for social justice and the underdog? Poverty alleviation may be the rhetoric, critics argue, but in practice little that is lasting has been achieved on this front by NGO activism.

There is the compromising nature of their funding to consider – today contributions from governmental and intergovernmental aid agencies and from corporate donors often form the largest chunks of their income. Although some BINGOs will still deny it, this influences their outlook, making them increasingly accommodated to the wishes of their donors. Their language becomes all about forming partnerships with these interests, rather than challenging them. Work within the system, and business will transform the lives of the poor – it’s the Bono school of development, but with taxes.

In a recent article Dhananjayan Sriskandarajah, the secretary-general of Civicus, a global network of civil society organizations and activists, wrote: ‘We have become a part of the problem rather than the solution. Our corporatization has steered us towards activism-lite, a version of our work rendered palatable to big business and capitalist states. Not only does this approach threaten no-one in power, but it stifles grassroots activism with its weighty monoculturalism.’6

In a short educational film called ‘Does aid work?’ made by Oxfam (‘produced with the financial assistance of the European Union’) the argument is that increased aid by rich countries will help people lift themselves out of poverty and make it a thing of the past.7 How exactly? By providing health interventions (anti-retroviral drugs for 1.4 million people in the last few years) and education (40 million children being educated). These are excellent things, no doubt about it. But Oxfam fails to mention how a poor, educated person on anti-retrovirals manages to magic themselves out of poverty in a system that is only interested in extracting their labour at the cheapest possible price.

On the other hand its latest report, ‘Even it Up: time to end extreme inequality’, is more to the point, informing us that the world’s richest 85 people have grabbed wealth equivalent to the poorest half of the world’s population.8 It makes an urgent case for progressive taxation, action on tax evasion and for governments to invest in public services. It details some of the violence inequality does, cautiously praises some countries (Brazil, China – but oddly not the more revolutionary Venezuela) for achieving higher wages for workers, and is a model of reasonableness. It makes a series of excellent recommendations – including telling governments to govern in the public interest – but stops short of calling full out for a redistribution of this obscene wealth. Instead it suggests a cap on the income of the richest 10 per cent equivalent to that of the poorest 40 per cent. A fine advocacy document no doubt, but the coalface is elsewhere.

And we have heard such noises before. Indeed, many a campaign to hold transnationals to account has petered out into ‘working with business’ and corporate social responsibility projects. We are at such a pass that some BINGOs actively seek corporate ‘partners’ with the promise to make the latter look good by association (see ‘The company they keep’).

Funding dependency and a hierarchical, corporate culture – many heads of BINGOs come from the business world – are a large part of the problem. According to Sriskandarajah: ‘Our conception of what is possible has narrowed dramatically. Since demonstrating bang for your buck has become all-important, we divide our work into neat projects, taking on only those endeavours that can produce easily quantifiable outcomes. Reliant on funding to service our own sizeable organizations, we avoid approaches or issues that might threaten our brand or upset our donors. We trade in incremental change.’6

Doing it for the donors

NGOs, not just the giants, face huge, entrenched, complex problems; due to donor pressure they are increasingly forced to respond with a discrete project with x number of deliverable outcomes. They reach out to us, too, in this way – ‘your $50 will buy mosquito nets for a family of four’. Social change doesn’t work like that, yet, increasingly, NGOs striving for it are forced to.

On assignment to cover the human cost of the military dictatorship in Burma in 2008, I came into contact with a number of NGOs run by Burmese people operating just across the border in Thailand. I was a bit taken aback by the number of reports thrust into my hands; obviously the funding of reports was popular among donors.

One particular feminist grouping impressed me with the breadth of their concerns. The usual report writing, educational and income-generation activities, were just the tip. Below the radar they were in dialogue with Burmese opposition political groupings, building up everyday feminist values, promoting co-operative social organization within the refugee camps, acting as big sisters to children orphaned by the military, doing their best to shelter other refugees who were in hiding as ‘illegals’ in Thailand. The group was reaching out, undercover, to communities back in Burma and above all keeping alive the flame of active resistance to the military regime, when it would have been all too easy to give up hope.

NGOs come in all stripes:

INGO – International NGO

BINGO – Big international NGO

TANGO – Technical assistance NGO

RINGO – Religious NGO

CONGO – Corporate-organized NGO

DONGO – Donor-organized NGO

GONGO – Government-organized NGO (not really an NGO)

PANGO – Party NGO (set up by a political party, not really an NGO)

Briefcase NGO – NGO set up only to draw donor funds

CBO – Community-based organization

These women seemed able constantly to adapt to new challenges and were respected by the people they worked with. Little of this was fundable. So they also did the conferences and presentations in hotels and labyrinthine project applications that foreign funders required. I couldn’t help thinking that their real achievements were despite what was expected of them.

Most media scrutiny of NGO accountability is of how they use funds, their accountability to donors. But what of their accountability towards the recipients of their interventions?

A common complaint is that the linkages of aid whichNGOs deliver set a predetermined agenda on the kind of services they offer. Historian Diana Jeater writes of her experience: ‘When I first started working in Zimbabwe in the 1980s, I was impressed by how all the NGO workers I met emphasized the need to listen to rural women. I was quickly disillusioned when I realised that “listening” meant “finding out how to present what we want to deliver in ways that make them acceptable to rural women”.’9

More serious are the charges that they NGOize popular resistance movements, acting as unelected spokespersons, deflecting energy away from confrontation with self-help projects and the like, and dividing communities struggling against dispossession. ‘They take sections of people into their fold,’ said one Indian activist, ‘and restrict their concern for these people, while others do not exist. They breed small hopes, solve small issues and take small actions while the movement process is attempting to address the larger issues of displacement facing all our people, NGO beneficiary or not.’10

Indeed, many of the most radical popular movements today refuse any funding fromNGOs, only forming alliances when the NGO could help spread their message.

Do they help?

So, to turn to the question posed at the beginning: do they help?

We could start with Bangladesh, which has the world’s largest national NGOs, effectively operating as a parallel government – they put more money into development activities than the government does. Most of their beneficiaries remain firmly below the poverty line. There is criticism, too, of the market model of development they have followed. This has been over-reliant on microcredit, which produces ‘rational profit-seeking individuals’ rather than community efforts – to say nothing of the debt traps many have found themselves in.

Or we could look at the Philippines, where I had the opportunity to observe first-hand how joined up small radical NGOs were, both with each other and the communities they were reaching out to, unafraid of supporting people’s resistance. Successive governments have actively encouraged NGO participation in government departments and on all kinds of local boards. Has this co-opted them? The successes they have achieved remain localized. They have been able to make no dent in the fundamental problem that has plagued the country – the concentration of wealth and land in just a few hands and continued élite governance. The 25 richest Filipinos continue to grow richer, with assets almost equal to the annual income of the country’s 55 million poorest citizens.11

It is perhaps unrealistic to expect such large structural changes to be delivered by NGOs when governments don’t tackle them either.

When it comes to emergency humanitarian assistance, certain specialist NGOs are the first port of call. Criticism often follows later about duplication of efforts, mishandling of the situation or of not being consultative enough in reconstruction efforts. But no assistance is the worse option in this instance.

On the environmental front we have some of the most activist large NGOs, whose members are unafraid to put their bodies on the line, as well as some of the most corporate friendly and compromised (read about the latter on page 20).

NGOs have achieved much in single-issue campaigning, ranging from the abolition of slavery to the landmines ban and access to HIV medication.

When it comes to defending human rights, whether it be espousing the causes of political prisoners or mounting challenges to the persecution of sexual minorities, they have often invited the ire of governments. It is this kind of work that governments want to shut down when they seek to ban NGOs or to stop them receiving foreign funds.

Sadly, this is not a disinterested field with universal values. Western NGOs can be quicker to condemn human rights abuses in the Majority World than in their own. Human Rights Watch has come under fire for its revolving door with the USgovernment: in 2009 its advocacy director Tom Malinowski, who had previously served as special assistant to Bill Clinton and speechwriter to Madeleine Albright, even justified CIA renditions ‘under limited circumstances’.12 It has also shown bias in its reporting of war crimes committed by Israel and Palestine.13

Even the clumsy, lumbering BINGOs achieve much in material terms, but will they really put their shoulders to the wheel behind the greatest liberation struggle of our times, the struggle of the 99 per cent for greater equality? If the largest appropriators of the planet’s wealth want to pose as grand philanthropists, should NGOs really line up to take their cash? Can they please get beyond donor benevolence – and being delivery vehicles for highly politicized and often harmful aid – to reconnect with people’s struggles for justice?

NGOs are expected to be non-political, but everything they do, operating within highly skewed systems of power, cannot but be political. They might as well get their hands truly dirty.

  1. Ji Giles Ungpakorn, ‘NGOs: enemies or allies?’, International Socialism, October 2004; nin.tl/1xAbhWD

  2. In ‘Capitalism: A Ghost Story’, Outlook, 26 March 2012; nin.tl/1sztS0w 

  3. Paul Vallely, ‘Giving to charity: Are we getting as good as we give?’, The Independent, 10 September 2014; and Wikipedia. 

  4. Dhananjayan Sriskandarajah, ‘NGOs losing the war against poverty and climate change, says Civicus head’, The Guardian, 11 August 2014. 

  5. In ‘Help that hinders’, Le Monde diplomatique, November 2004. 

  6. ‘NGOs losing the war against poverty and climate change, says Civicus head’, The Guardian, 11 August 2014. 

  7. Oxfam website, film posted on 28 April 2010; nin.tl/1rz9A7r 

  8. Posted 29 October 2014; nin.tl/1zNoTTT 

  9. In ‘Zimbabwe: International NGOs and aid agencies – Parasites of the Poor?’, 5 August 2011, African Arguments;nin.tl/1u76L4U 

  10. Dip Kapoor, ‘Social action and NGOization in contexts of development dispossession in rural India: Explorations into the un-civility of civil society’, in NGOization: Complicity, contradictions and prospects, edited by Aziz Choudhry and Dip Kapoor, Zed Books, 2013. 

  11. Sonny Africa, ‘Philippine NGOs: defusing dissent, spurring change’, in NGOization, see 10 above. 

  12. Open letter by Nobel Peace Laureates among others, 12 May 2014, AlterNet; nin.tl/1tDiXIr 

  13. Jonathan Cook, ‘Shock and awe in Gaza’, Counterpunch, vol 21 no 7, 2014. 

Front cover of New Internationalist magazine, issue 478 This special report appeared in the ngos issue of New Internationalist.

 


The Company they keep

by Ian Brown for newint.org

‘We’re at a critical moment for the world’s children,’ warns Justin Forsyth in Save the Children’s 2013 annual report. The chief executive of the British grouping of this international NGO could not be more right. Needless wars, dispossession through climate change, the rise of ugly rightwing politics – the human toll is high. Children and women, as ever, bear the brunt.

‘We face a moment of opportunity, challenge and responsibility,’ Forsyth continues. ‘If we’re going to achieve even more impact for children, we need to work in different, innovative ways.’ Mark Goldring, Oxfam GB’s boss, echoes such sentiments: ‘Our challenge is not only to continue to do this work, but to scale it up.’ CARE International is no less ambitious, determined to focus even more efforts to empower women and girls.

Despite economic recession, these three international NGOs mustered combined funds of $3.2 billion to spend on the poor last year.1 Save the Children UK managed a 20-per-cent jump during 2012-13, bringing its income up to a record $525 million, due in part to corporate donations, up a third from 2012 to $40 million in 2013.

Partners unlimited

Corporate funding of international NGOs is nothing new. CARE USA has collaborated with Coca-Cola for three decades. ‘We are extremely grateful for the trust placed in us by compassionate donors and partners,’ says CARE in its 2013 annual report. As well as Coca-Cola, CARE counts arms manufacturers General Electric and Boeing, and clothing companies Nike and Gap, among its major donors. Oxfam, too, has embraced the corporate agenda and ‘is proud to be at the forefront of partnerships between the business sector and the NGO community’. Save the Children’s message couldn’t be clearer: ‘Teaming up with Save the Children to market a new or existing product could boost your sales, profile and customer base.’

But do such partnerships offer the win-win solution claimed by the NGOs and their corporate funders, or are there losers? Does Erinch Sahan, an Oxfam private-sector adviser, have a point when he blogs: ‘I want to believe that pursuing profits will result in a sustainable world and the end of poverty’? One such partnership involves Save the Children and pharmaceuticals giant GlaxoSmithKline (GSK). Since 2011 Save the Children has benefited from GSK’s initiative to reinvest 20 per cent of the profits it makes in the world’s least developed countries (a fraction of its global $7.5 billion profit in 2013) back into projects which strengthen healthcare infrastructure and support the research and development of child-friendly medicines. Save the Children’s website claims a million children will be helped as a result of a ‘ground-breaking’ deal signed with GSK to improve children’s health in some of the poorest countries of Africa.

‘Teaming up with Save the Children to market a product could boost your sales, profile and customer base’ – Save the Children’s assurance to potential corporate partners

No mention on Save the Children’s website, however, of one of GSK’s less child-friendly products – the antidepressant Paxil (Seroxat/paroxetine). In 2012 the company was fined $3 billion by the US government after pleading guilty to criminal charges, including bribing doctors and encouraging the prescription of Paxil to children, even though the drug was unsuitable and unapproved for this use.2 ‘We would never refrain from speaking out on an issue because we had a partnership with a particular company. That would clearly compromise our values,’ claims Save the Children. When contacted for a response, it admitted it was ‘aware of reports on the historic issues relating to Paxil… but our belief is that the risks are outweighed by the benefits of the partnership.’3

Oxfam’s uncompromising vision of a world where everyone has enough to eat is embodied in the high-profile ‘Behind the Brands’ campaign, which promises to ‘provide people… with the information they need to hold the Big 10 [global food and beverage producers] to account’. One such is Unilever, about whom Oxfam was, until recently, rightly critical: ‘[Unilever’s] record on land rights leaves plenty to be desired’.4 By its own Responsible Sourcing policy, Unilever will not require 80 per cent of its suppliers to consider the rights of women to land ownership until the end of 2017. In the past Greenpeace has accused Unilever of sourcing its palm oil from Indonesian suppliers whose activities included ‘tearing up areas of pristine forest then draining and burning the peatlands’.5 The company was recently fined $120 million by the European Commission for establishing a price-fixing cartel in Europe along with Proctor & Gamble.6

Yet despite all the criticism, ‘Unilever is a vocal advocate for tackling climate change and new business models that benefit poor farmers,’ according to Penny Fowler, head of Oxfam’s private sector team. ‘[W]e will continue to engage with Unilever and other companies because reducing global poverty and inequality is good for business and us all.’ Oxfam currently helps the transnational under its ‘Corporate engagement’ programme ‘to incorporate thousands of smallholder farmers into their [Unilever’s] global supply chain’. But is this really an innovative way of ending poverty or is Oxfam helping a rich company get richer at the expense of poor farmers? Paul Polman, CEO of Unilever, is in no doubt of the benefits to the company, giving thanks to ‘partners who are assisting us to deliver this new business model’.

CARE USA similarly waxes lyrical about working with transnationals. ‘[We] believe that dynamic partnerships are critical to solving global challenges. Our partners are committed to developing and supporting socially responsible initiatives that build stronger communities in the developing world while enhancing business and development goals.’ Committed to donating 1.6 per cent of pre-tax profits to good causes, the Nike Foundation is one such partner, working ‘to unleash the unique potential of adolescent girls to end poverty for themselves and for the world’. Nike calls it ‘the girl effect’.

In 2000 a BBC documentary uncovered child labour and poor working conditions in a Cambodian factory used by Nike. The documentary focused on 7 girls as young as 12 who all worked 7 days a week, often 16 hours a day.7 Nike has been castigated the world over for its use of sweatshops since the 1990s, yet as late as 2013 Nike stated that a third of its contracted factories, or potentially 300,000 workers, still did not meet the company’s own minimum standards for worker treatment.8

Close companions

Is Nike really a ‘compassionate’ donor to be proud of, as CARE would have us believe? Or have all three NGOs become too close to big, unscrupulous corporations, preferring to mount large-scale, high-profile schemes that deliver food and medicine to the needy and greater profit margins to the transnationals, at the expense of grassroots work to tackle the endemic, structural causes of poverty?

Just how close the corporate and international charity worlds have become is evident from a look at those at the top of the NGOs. Alex Cummings is both treasurer of CARE USA and executive vice-president of Coca-Cola. Save the Children’s director of human resources, Paul Cutler, is a former employee of GSK. Oxfam trustee Dame Marjorie Scardino, a Forbes rich-lister, is a non-executive director of Nokia, an Oxfam donor. Connections to powerful political figures are close, too. Save the Children’s $200,000-a-year chief executive Justin Forsyth and Oxfam trustee David Pitt-Watson are both former advisers to New Labour’s controversial prime ministers, Tony Blair and Gordon Brown respectively. Much more worrying, however, is the accusation that large international NGOs are helping to legitimize companies like GSK, Coca-Cola, Nike and Unilever, rather than holding them to account for serious malpractice. With transnationals treating corporate social responsibility schemes as little more than a necessary expense to whitewash their reputations, do NGOs really need to get in on the act?

Ian Brown managed aid programmes for 15 years in Africa, the Middle East and Southeast Asia for Oxfam, the Mines Advisory Group and Terres des homes.

  1. CARE International had revenues of $0.7 billion, Oxfam International $0.6 billion and Save the Children International $1.9 billion. 

  2. ‘Pharma overtakes arms industry to top the league of misbehaviour’, 8 July 2012, The Observernin.tl/gskfine 

  3. Statement from Save the Children to the author, 9 October 2014. 

  4. Behind the Brands, nin.tl/oxfambandj accessed on 8 October 2014. The page was updated by Oxfam and the criticism removed on 9 October 2014. 

  5. ‘Palm Oil: Cooking the climate’, 8 September 2007, Greenpeace International; nin.tl/cookingclimate 

  6. ‘Unilever and Proctor & Gamble in price fixing fine’, 13 April 2011, BBC News. 

  7. BBC Panorama, 15 October 2000. 

  8. Nike Inc; nin.tl/niketargets 

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