10 ways we could curb undeserved executive remuneration and secure equitable distribution of income

Prem Sikka 

16 August, 2024 
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The High Pay Centre reported this week that FTSE100 chief executive salaries has soared

This week, the High Pay Centre reported that the salary of FTSE100 chief executives has soared. The average FTSE100 CEO’s pay increased from £4.42m in 2022 to record £4.98m in 2023, which is an increase of over £500,000 in one year equivalent to 23 years pay for someone on the national minimum wage. The median pay increased from £4.1m to £4.19m. The median pay of the full-time UK worker is just £28,752, unchanged in real terms since 2008.

81% of FTSE 100 companies paid their CEO bonuses in accordance with a Long Term Incentive Payment plan though the same bonuses are rarely given to employees whose brains and brawn generate wealth. The number of CEOs collecting more than £10m has increased from four to nine. These include AstraZeneca CEO collecting £16.85m; Relx, £13.64m; Rolls Royce, £13.61m; BAE Systems, £13.45m and £10.64m at HSBC.

Higher profits may be good news for executives and shareholders, but not necessarily from a social responsibility perspective. Water companies dump raw sewage in rivers and seas, which boosts profits and executive pay whilst creating health hazards for people. HSBC has a long history of egregious business practices. In December 2021, it was fined £64m for “serious weaknesses” in monitoring of money laundering and terrorist financing scenarios. In January 2024, it was fined £57.4m for “serious failings” over its measures to protect customer deposits. In May 2024, £6.28m fine for failing to give due consideration to customers when they fell into arrears or were experiencing financial difficulties. Rolls Royce is facing a £350m lawsuit over bribery and allegation allegations after previously paying a fine of £497m to settle charges of “12 counts of conspiracy to corrupt, false accounting and failure to prevent bribery”. None of these practices disrupt the executive gravy train.

FTSE 100 firms spent £755m on the pay of 222 executives, but that is not enough for some. The claim is that UK executive rewards are much lower than the US standards and unless the UK executive pay rockets the country risks a brain drain. Such claims are never mobilised to support UK workers even though their median pay has fallen significantly behind workers in other European countries. Ministers and newspapers routinely claim that wage rises for workers, even for those on the minimum wage, are inflationary but that logic is never applied to executive pay.

Executive pay is detached from economic growth, productivity and wage levels for workers. Thomas Piketty argued that today’s chief executives are a generation of “super-managers” who, for the first time in history are able to become independently wealthy by running a public company for a handful of years. They do not necessarily produce wealth but get a disproportionate share. Just look at the UK finance industry which routinely hands mega pay packets to directors. Between 1995 and 2015 it made a negative contribution of £4,500bn to the UK economy, and is routinely involved in scandals.

Executives at poorly performing companies collect megabucks even when they are teetering on the edge of bankruptcy. In theory, remuneration committees staffed by non-executive directors are supposed to check misguided rewards but they have shown no inclination to so, especially as their own lucrative appointments depend on the benevolence of executive directors. The Post Office scandal has once again shown the ineffectiveness of non-execs. The remuneration committee continued to approve bonuses even though the company was engaged in illegal prosecution of postmasters.

The High Pay Centre reported that the typical CEO’s pay is equivalent to 120 times the annual pay of the average full-time worker. This fuels inequalities, concentration of wealth and power and damages social fabric. The rich can fund political parties and think-tanks; lobby policymakers and use social media; own TV and radio stations to advance their interests, whilst the rest of the population can’t and is increasingly excluded from social consumption. Inequalities have severe implications for access to good housing, education, food, pension, healthcare, transport, justice, security, democratic institutions and much more. Households on low income have shorter life expectancy, higher stress, infant mortality, health and psychological disorders.

Successive governments have shown little interest in equitable distribution of income. To appease corporate elites they have resorted to voluntary approaches. Voluntary corporate governance codes such as the Cadbury, Greenbury, Hampel and others have failed to check undeserved executive pay. They are content to rely upon non-execs and shareholders. The shareholder-centric model of corporate governance expects geographically dispersed shareholders to check undeserved executive pay. However, shareholders of listed companies have only a short-term interest in companies and are rarely focused on curbs on excessive executive pay or social justice. Some 57.7% of the shares of UK listed companies are held by overseas beneficiaries and they have no incentive to curb social squalor in the UK. The nine shareholders of Thames Water have shown a voracious appetite for dividends, and none for curbing sewage dumping or executive pay. In family-owned large companies, of which BHS is a good example, it is unrealistic to expect members of the family to vote against the pay of another family member. Even if shareholders vote against executive pay, their vote under UK Companies Act 2006 is advisory rather than binding. At Pearson 47.6% of shareholders voted against executive remuneration policy but it made no difference. It is hard to think of any court case where shareholders have sought to enforce Section 172 of the Companies Act 2006, which requires directors to have regard for the interests of employees, and withhold executive pay or demand a more equitable outcome for employees or consumers or other stakeholders.

A different approach based on democracy and stakeholder empowerment is needed. Here are some suggestions:In the case of banks, insurance, water, rail, energy, internet, mobile phones and many other businesses customers can be identified with certainty and should be empowered to shape corporate governance. Unlike shareholders, workers and customers have a long-term interest in the wellbeing of a company and need to be empowered.
Around 35% – 50% of the members of unitary boards of large companies should be elected by workers and/or customers, or companies could choose German style two-tier boards with the supervisory board elected by workers and/or customers.
Executive remuneration contracts should be made publicly available so that all details are clear.
The remuneration of each executive at large company must be the subject of an annual binding vote by stakeholders, including shareholders, employees and customers. This should encourage directors to ensure that workers receive a good share of the wealth created. Customer vote on executive pay would help to curb predatory practices such as profiteering, dumping sewage in rivers and shoddy services.
The vote on fixed executive salary can be the subject of a simple majority vote by all stakeholders, with at least 50% turnout. Bonuses should only be given for extraordinary performance and subjected to extraordinary approval. At least 90% of the stakeholders must support it, on a 50% turnout.
If 20% of the stakeholders vote against the director remuneration policy, the board must receive a warning to mend its way. If the same happens in the next year then the stakeholders should have the option to trigger a resolution at the general meeting on whether the executive and stakeholder directors, with the exception of the managing director and/or chairman, need to stand for re-election. If this resolution is supported by 50% or more of the eligible stakeholders then a meeting to consider re-election of directors must be convened.
Stakeholders should be given the right to cap executive remuneration. This could be in the form of a multiple of pay ratio (e.g. x times the average wage), or an absolute limit (e.g. not exceeding a specified amount) or in any other form that stakeholders see fit.
The Companies Act must provide a framework for claw back of executive remuneration to ensure that directors are held responsible for any trail of destruction left behind.
Golden handshakes, hellos and goodbyes have all become a way of inflating executive remuneration and must be prohibited. Golden handshakes bear no relationship to any notion of performance and are retained by the executives even though the appointment may turn out to be disastrous. The culture of golden handshakes can encourage a job-hopping mentality and lack of motivation to deliver the long-term welfare of a company. Golden goodbyes are often rewards for dismissed CEOs for poor performance. Payments outside of performance benefit only the executives and not any stakeholder. Such payments must be prohibited, as is the case in Switzerland.
In the case of companies with deficits on employee pension schemes, their directors must not receive any increase in remuneration unless they have reached a binding deficit reduction agreement with the Pensions Regulator.

The above suggestions may not prevent all exploitative practices but provide a sound basis for curbing undeserved executive remuneration and securing equitable distribution of income.

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

Image credit: Marc Barrot – Creative Commons

 

The Distasteful Nonsense of Olympism

by Binoy Kampmark / August 17th, 2024

Ekecheiria, also known as the “Olympic Truce,” is a quaint notion dating to Ancient Greece, when three kings prone to warring against each other – Iphitos of Elis, Cleosthenes of Pisa and Lycurgus of Sparta – concluded a treaty permitting the safe passage of all athletes and spectators from the relevant city-states for the duration of the Olympic Games.  The truce had a certain logic to it, given that many of those granted safe passage would have been serving soldiers or soldiers in waiting.

In 1894, the founder of the International Olympic Committee (IOC), Pierre de Coubertin, fantasised about the Games as a peace promoting endeavour which, when read closely, suggests the sublimation of humanity’s warring instincts.  Instead of killing each other, humans could compete in stadia and on the sporting tracks, adoring and admiring physical prowess.  “Wars break out because nations misunderstand each other.  We shall have no peace until the prejudices which now separate the different races shall have been outlived.  To attain this end, what better means than to bring the youth of all countries periodically together for amicable trials of muscular strength and agility.”

Panting over torsos, sinews and muscles, de Coubertin gushingly wrote his “Ode to Sport” in 1912.  Sport was peace, forging “happy bonds between the peoples by drawing them together in reverence for strength which is controlled, organised and self-disciplined.”  It was through the young that respect would be learned for “one another,” thereby ensuring that “the diversity of national traits becomes a source of generous and peaceful emulation.”  Sport was also other things: justice, daring, honour, joy and, in the true spirit of eugenic inspiration, the means to achieve “a more perfect race, blasting the seeds of sickness”.  Athletes would, accordingly, “wish to see growing about him brisk and sturdy sons to follow him in the arena and [in] turn bear off joyous laurels.”

The Olympic Charter also states that Olympism’s central goal “is to place at the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity.”

In the 1990s, the IOC thought it prudent to revive the concept of such a truce.  As the organisation explains, this was done “with a view to protecting, as far as possible, the interests of the athletes and sport in general, and to harness the power of sport to promote peace, dialogue and reconciliation more broadly.”  In 2000, the IOC founded the International Olympic Truce Foundation, adopting the dove as a signature symbol of the Games.  By the London Olympics of 2012, the 193 nations present had signed onto an Olympic Truce.

From such lofty summits, hypocrisy and inconsistency will follow.  The IOC, hardly the finest practitioner of fine principle, has been prone to injudicious standards, rampant corruption and tyrannical stupidity.  The IOC recommendation to ban Russian athletes took all but four days after the attack on Ukraine in February 2022 on the premise that Russia had breached the sacred compact of sporting peace.  In the mix, Belarus, designated as arch collaborator with Russian war aims, was also added.

During the 11th Olympic Summit held on December 9, 2022, the IOC Executive Board noted that the Olympic Games would not “address all the political and social challenges in the world.  This is the realm of politics.”  Having advocated that platitudinous, false distinction, the Executive Board could still claim that the Games “can set an example for a world where everyone respects the same rules as one another.”

The IOC did make one grudging concession: Russian and Belarusian athletes could compete as Individual Neutral Athletes (AINs) subject to meeting eligibility requirements determined by the Individual Neutral Athlete Eligibility Review Panel.  Each athlete’s participation was subject to respecting the Olympic Charter, with special reference to “the peace mission of the Olympic Movement”.

These statements and qualifications, intentionally or otherwise, are resoundingly delusional.  The Games are events of pompous political significance, with athletes often being administrative and symbolic extensions of the nation stage they represent.  Authoritarian regimes have gloatingly celebrated hosting them.  They have been staging grounds for violence, notably in the killing of 12 Israeli athletes at the 1972 Munich Games by the Palestinian terrorist group Black September.

They have also been boycotted for very political reasons.  The United States did so in 1980 for the Moscow Games, along with 64 other nations, in response to the Soviet Union’s invasion of Afghanistan in 1979.  The Soviet Union returned the favour at the Los Angeles Olympics held in 1984, giving President Ronald Reagan a chance, in an election year, to speak of the “winning” American ideal and “a new patriotism spreading across our country.”

In keeping with the erratic nature of such a spirit, it was appropriately hypocritical and distasteful of IOC practice to permit the Israeli athletic contingent numbering 88 athletes to compete at the Paris Games. All this, as slaughter and starvation continued to take place in Gaza (at the time, the Palestinian death toll lay somewhere in the order of 39,000).

Permitting Israel’s participation prompted Jules Boykoff, an academic of keen interest in the Games, to suggest that “the situation is more and more resembling the situation that led the IOC forcing Russia to participate as neutral athletes.”  The body’s “approach to ignore the situation places its selective morality on full display and throws into question the group’s commitment to the high-minded ideals it claims to abide.”

These ideals remain just that, a cover that otherwise permits political realities to flourish.  Predictably, the Paris spectacle, both before and after, was always going to feature the tang and sting of resentment.  Far from being apolitical exponents of their craft, various members of the Israeli Olympic team have been more than forthcoming in defending the warring cause.  Judokas Timna Nelson-Levy and Maya Goshen have been vocal in their defence of the Israeli Defense Forces.

Palestinian participants have also done their bit.  During the opening ceremony, boxer Wasim Abusal wore a shirt showing children being bombed, telling Agence France-Presse that these were “children who are martyred and die under the rubble, children whose parents are martyred and are left alone without food and water.”  Such views are not permitted for Russian or Belarusian athletes, who must compete under the deceptive flag of neutrality.

The organisers of the Paris Games also found it difficult to keep a lid on an occasion supposedly free of political attributes. The Israel-Paraguay football march was marked by scornful boos as the Israeli national anthem was performed.  Reports also note that at least one banner featured “GENOCIDE OLYMPICS”.  Three Israeli athletes also received death threats, according to a statement from the Paris prosecutor’s office.

It’s such instances of political oddities that permit the following suggestion: make all athletes truly amateurish by abolishing their associations with countries.  Most nation states, soldered and cemented compacts of hatred, based upon territory often pinched from previous occupants, are such a nuisance in this regard.  If Olympism is to make sense, and if the ravings of the physique obsessed de Coubertin are to be given shape, why not get rid of the State altogether, thereby making all participants neutral, if only for a few weeks?Facebook

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Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com. Read other articles by Binoy.

 

The End of the World

A review of Nuclear War: A Scenario, by Annie Jacobsen

by Sheila Velazquez / August 16th, 2024

I remember the day World War II ended. I was five. Our tiny apartment was filled with adults in various stages of euphoria, and inebriation. My one-month-old brother slept through it all in a basket on the kitchen sink.

My Uncle Jack was there on leave from the Coast Guard, which, during the war, escorted Navy ships carrying our troops, munitions, and supplies to Europe, protecting them from U-boat attacks. Jack was my hero. Each time he came back, there were gifts for my mother and for me. I still have the Turkish leather trinket box with the harem girl figure on the top.

The room was so small that we kids were sent outside. We felt the excitement and played as hard as our parents partied, long into the night, eventually finding our way back to our beds when we had nothing left. Several times we would hear one of the adults shout, “Never again!”

My memory of the Korean conflict relies mainly on my prayers for Nickie, my schoolgirl crush, the son of the butcher who owned the neighborhood grocery store. He came back a different person. As did my neighbor, Tony, who I did not recognize at first because his face had been completely transformed by plastic surgery.

During this conflict, schools held drives to help the war effort, although because of the post-war industrial boom, they were not as necessary as they had been for WWII. But we kids collected wire coat hangers and aluminum foil peeled from gum wrappers for the cause.

My understanding of war came from these men and women who had served and the images captured by Pathé News that were shown between the feature film and cartoons at the Saturday matinee. I wonder if today’s kids even think about war, or are they too distracted by the trivia created to keep them from serious thought.

I remember the 60s, from moving back to the States from Puerto Rico just before the Cuban Missile Crisis, through the war protests and Chicago convention riots. Actual journalists covered it all. We were outraged. But where is the outrage now?

And now the book report. I recently read Nuclear War: A Scenario, by Annie Jacobsen. Jacobsen draws on interviews with various military leaders and scientists to describe a scenario in which we come to the brink and beyond. Mistakes are made, leaders misspeak, communications are misinterpreted. The insanity of power and testosterone are in full force. Buttons are pushed, and Jacobsen fully lays out the steps that would occur as this doomsday action is set in motion. She documents the failures of our defenses, from ineffective warning systems to outdated equipment. So many things can go wrong, and would.

One of the most startling themes of the book is how if the United States were to retaliate in kind by an attack from another, in her example North Korea, another country, in her example Russia, could detect missiles over the Arctic Circle as being directed at them, leading to exchanges between the United States and both countries.

Nearly seventy times more powerful than the bomb dropped on Hiroshima, Jacobsen lays out a picture of the destruction a one megaton bomb would cause, including how many would die instantly, and the effects at various distances from the bomb site. She writes of the nuclear winter that would destroy the ozone layer and life on earth itself, of the almost nil chance of survival anywhere on the planet, and the pain and suffering of those few who managed to hang on for a short time. As Nikita Khrushchev once noted, following nuclear war, “the living would envy the dead.” Nuclear War is a well-researched and frightening read.

We need new goals similar to the anthems of the 60s, of Peace and Love. All the petty bickering of the day over issues that in the end make no real difference in our lives must be kicked to the curb. We need to get off our phones and stand in the town square, gathering our communities together to force real change that will make the future better for all children and families, across the globe, and to ensure that there is a future.

This book should be required reading for politicians, policymakers and media who control and report on the fate of our planet and the human race. We may only have one chance to get this right.Facebook

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Sheila Velazquez lives and writes in Northwest Massachusetts. Her work is informed by decades of experience with unions, agriculture, public health, politics and her support of populism. She welcomes contact by email: simplelifestyle101@yahoo.com. Read other articles by Sheila.

 

Voting for Genocide

by Paul Larudee / August 17th, 2024

If Jeffrey Dahmer and Ted Kuzinski were the candidates for the Republican and Democratic parties, which one would you vote for?

Donald Trump and Kamala Harris both have more blood on their hands than either of these serial killers, and they promise to kill many more. Both of them supported the latest $20 billion to Israel, to keep the project to eradicate the people of Gaza on schedule. Voting for them means giving them permission and encouragement to keep the rivers of blood flowing, so I won’t do it. I might vote for Jill Stein or the Libertarian candidate, but I’m inclined not to play the game. It’s a personal choice — a symbolic one, you might contend.

But so is yours, if you are voting for a major party candidate. Did you select either of them to be a candidate? Can you think of a better one? Of course you can. In fact, every one of you is probably a better candidate yourself. That’s why your vote is symbolic. You don’t win either way. And either way, your vote says to the party or candidate, “Your support for genocide is not going to keep me from voting for you.”

What can we do about it? As Emma Goldman said, “If voting changed anything, they’d make it illegal.” That was a century ago, and it is more true today — with Citizens United solidifying corporate and special interest (e.g. AIPAC) control of our elections and our electeds — than it was then. Our only influence in government is with issues that have little interest for the powerful, such as women’s reproductive rights, other than to be used by the powerful to manipulate and deceive us into thinking that our vote makes a difference.

As individuals, we must take responsibility for our participation in this rigged game. Are we willing to vote for one mass murderer over another just for the opportunity to play? Daddy, what did you do during the Great Genocide?

Collectively, a voter strike might be in order. Vote None of the Above! Perhaps we need a new movement that defies the system rather than participating in it. Picket the polling stations and tell people not to vote, that doing so sends the message that they support genocide.

I have no illusions how difficult it is to create a mass movement, especially one that seeks to wrest control from those who rule us. But genocide puts special obligations upon us. Individually, at the very least, our integrity is at stake. Are you actually going to participate — and be complicit — in genocide? We all have choices. Let your conscience decide. Make yourself and your descendants proud of you.FacebookRedditEmail

Paul Larudee is a retired academic and current administrator of a nonprofit human rights and humanitarian aid organization. Read other articles by Paul.

Why the Genocide Continues

by David Swanson / August 17th, 2024

According to the New York Times, U.S. officials say there’s no excuse, on the warmakers’ own terms, for the genocide they are arming:

“Israel has achieved all that it can militarily in Gaza, according to senior American officials, who say continued bombings are only increasing risks to civilians while the possibility of further weakening Hamas has diminished…. William J. Burns, the C.I.A. director, is due in Qatar on Thursday. Brett McGurk, President Biden’s Middle East coordinator, has headed to Egypt and Qatar. Amos Hochstein, a senior White House adviser, landed in Lebanon. One of the messages the officials are expected to deliver is that there is little more Israel can accomplish against Hamas.”

But there’s another message they’re delivering:

    the weapons will never stop flowing from the United States to Israel.

According to opinion polls, the majority of U.S. voters want the weapons shipments to stop now and have wanted that for some time.

But there’s another message many of them are delivering:

    OMG it’s so awesome how Kamala tells peace advocates to shut up, she and Walz bring joy to my life like like like like yeah you know?

If Harris were to demand that Biden or Congress or the UN stop the weapons shipments, and were they to stop, I would start campaigning for Harris-Walz to take office in Washington. As long as that doesn’t happen, I’ll support Biden-Harris taking seats in the dock at The Hague.

Unless of course somebody takes a notion to uphold U.S. laws and prosecute them here. Every weapons shipment violates the Conventional Arms Transfer Policy, the Foreign Assistance Act, the Arms Export Control Act, the U.S. War Crimes Act, the Genocide Convention Implementation Act, and the Leahy Law. Just ask former Senator Leahy who says the U.S. government is making a mockery of the law that bears his name.

Biden is still scheduled to be officially president for about as long as the Gulf War took from start to finish, about twice as long as the Spanish-American war, about three times the Falklands war, several times various U.S. wars in Latin America and around the globe, and several times what it took for the U.S. to overthrow the government of Afghanistan prior to failing to grasp the need to leave that place for decades.

Biden’s remaining months are also longer than it has taken for polls to show dramatic turns of opinion against wars, commonly labeled “war fatigue” as though noticing the horror of the mass killing requires sleepiness rather than insight. But the “fatigue” has already been awakened.

Of course, politicians also hear messages from war-profiting bribers of their campaigns, and from weapons-funded stink-tankers. The war machine has a great deal of inertia even when it has no excuse. Peace making has been bizarrely redefined as “anti-Semitism.” Opposition to genocide is now “terrorism.” And all the microphones have been gathered up in a big pile and placed in front of corporations peddling that BS.

But too many people know better. Too many people grew up believing genocide was evil. We’ve been here before, and it didn’t work out well for the forever-war candidate. His losing worked out horribly for everyone, of course, but his winning would likely have done the same.

We need an election in which people insist on not voting for war. We need an election in which people develop too much self-respect to give a flying F-35 what kind of tacos a candidate eats, which candidate you’d like a beer with, which you’d hire as a babysitter, which you’d vote for as prom king or queen.

Why does the killing never end? Panem et circenses.

First published at Let’s Try DemocracyFacebook

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David Swanson is an author, activist, journalist, and radio host. He is director of WorldBeyondWar.org and campaign coordinator for RootsAction.org. Swanson's books include War Is A Lie. He blogs at DavidSwanson.org and War Is a Crime.org. He hosts Talk Nation Radio. Follow him on Twitter: @davidcnswanson and FaceBook. Read other articles by David.

Susan Price (Socialist Alliance, Australia): Capitalism is incompatible with preventing catastrophic climate change

REPEAT OFTEN, EVERYWHERE

By Susan Price

Published 16 August, 2024

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Carbon dioxide levels were around 280 ppm for almost 6000 years of human civilization. Higher concentrations of carbon dioxide in the atmosphere are trapping heat and driving climate change, resulting in more extreme weather events.

This month, Egypt was hit by a heat wave that raised temperatures to 50.9 degrees — the highest temperature ever recorded in the country and the African continent. This was preceded by a heat wave that hit Pakistan and India in late May , making them the hottest places on Earth with air temperatures above 53 degrees.

Deadly heat wave killed 1300 people on their pilgrimage to Mecca in Saudi Arabia. Only a month ago, the country was hit by flash flooding in some areas.

In Europe, heat-related mortality has risen by about 30% in the past two decades. Since the 1980s, Europe has become the fastest warming continent, due in part to the amount of land in the Arctic that is the fastest warming region on Earth, but also to changing weather patterns.

In Australia, 66% of all heat-related deaths occur in areas of socioeconomic disadvantage, based on 2001-18 figures.

Heat waves combined with prolonged drought conditions and increased dry lightning sparked deadly fires in Chile in February, killing more than 100 people. Fires are still burning in Guatemala, Belize and California.

Storms that began in April triggered record-breaking and catastrophic flooding in Brazil’s southernmost state of Rio Grande do Sul. The ongoing climate disaster has affected about two million people, left at least 170 dead and displaced more than 600,000.

While people in the Global North are starting to experience the realities of climate change, the peoples of the Global South have been living with its consequences for decades. Those least responsible for the emergency bear the brunt.

The only way to prevent catastrophic climate change is to radically reduce greenhouse gas emissions and urgently intervene to repair and restore the climate, including drawing down existing carbon dioxide from the atmosphere. In addition, climate financing for mitigation and adaptation measures, and technology transfers from the rich nations to the poorest nations are needed.

The biggest obstacles to such actions are fossil fuel capitalists and the governments that do their bidding. While investment in renewable energy has nearly doubled, profits from fossil fuels are higher than renewables and banks such as JP Morgan are increasing investments in the industry. In fact, since the Paris Agreement on climate was adopted in 2016, the world’s 60 biggest banks have committed A$10.4 trillion to the fossil fuel industry and governments around the world continue to subsidise the fossil fuel industry to the tune of US$7 trillion, or 7.1% of world gross domestic product, according to the IMF.

In Australia this amounted to $14.5 billion in 2023–24, a rise of 31% on the previous year, according to The Australia Institute.

Just 100 fossil fuel corporations account for 71% of global greenhouse gas emissions. The countries of the Global North are responsible for around 90% of cumulative emissions, which are driving climate breakdown. Yet the South suffers 80‒90% of the economic costs and damages inflicted by climate breakdown and around 99% of all climate-related deaths.

As we learnt thanks to the work of the late Mike Davis and others, land-use change, intensive livestock production, wildlife trade and climate change are all linked to the emergence of pathogens with the potential to jump from animals to humans. This occurred with Ebola, HIV and SARS COV-2 – responsible for the COVID-19 pandemic, which took hold 4 years ago and has killed 7.1 million people, according to the World Health Organisation.

For 2023, the total global pharmaceutical market was estimated at around US$1.6 trillion dollars. This is an increase of more than US$100 billion compared to 2022. New York based Pfizer, responsible for one of the COVID-19 vaccines, has about 9% of the global market share.

Countries of the Global North with strong pharmaceutical industries are blocking consensus for a global pandemic treaty. This would provide for nations to give access to pathogen data in exchange for automatic access to vaccines, medications and tests developed using those data. Also in dispute is a requirement that vaccines and drugs developed with government funding be shared more equitably than they were during the COVID-19 pandemic.

Meanwhile, Avian Flu (H5N1), which emerged in 1997 in China and jumped to humans in South East Asia with a mortality rate of 40‒50%, is spreading among animals, impacting the world’s biodiversity. As reported in Nature: “On 25 March, US health officials announced that H5N1 had been detected in dairy cows for the first time. As of 5 June, infections have been confirmed in more than 80 dairy herds in nine states and in three dairy farm workers, all of whom had mild symptoms.”

According to Diana Bell, Professor of Conservation Biology, University of East Anglia, H5N1 “has killed millions of birds and unknown numbers of mammals, particularly during the past three years”. According to the Centre for Disease Control’s Emerging Infectious Diseases journal, 26 countries have reported that at least 48 mammal species have died from the virus since 2020, including 13 species of aquatic mammals, among them sea lions, porpoises and dolphins.

Migratory birds have been found to spread the disease. The first cases of H5 virus were detected in Antarctica in February, resulting in mass deaths of penguins among other species. Meanwhile, different strain of bird flu (H7) has been affecting poultry farms in Australia. One million birds were culled in Victoria and 250,000 at an egg farm in Hawkesbury, New South Wales.

A complete overhaul of poultry and egg production is the only way to stem bird flu. Moving away from factory farming and food production, including ultra-processed foods would have positive impacts on diet and public health.

Protecting biodiversity and avoiding a sixth mass extinction requires radical moves to protect habitat from destruction for mining, grazing and development. But the best that global governments can come up with is the “Thirty by thirty” target for protecting 30% of the Earth’s land and sea by 2030.

Capitalist economies allocate a zero value to the nature all life depends on, treating it as an “externality”. Capitalism has also created regular economic crises, and distorted the development of the world. It has led to a handful of rich countries and a majority of poorer, super-exploited countries. The rich countries are the base for most of the giant global corporations that monopolise key sectors of the economy.

The governments of rich countries maintain powerful militaries to protect their global economic hegemony. These countries have launched a new arms race, which not only risks escalating into nuclear war but also drains public funds needed to address the climate emergency and social needs.

Faced with this existential threat, we must build movements and alliances powerful enough to challenge the power of fossil fuel capital and take popular control over the economic levers of society. This is required to shift from a market-based economic system to a needs-based economy that puts people and nature at its centre. Critical industries, such as energy, transport, agribusiness and the financial institutions that invest in them, need to be brought under social control.

All this points to the urgent need to replace capitalism with an ecosocialist society, which could address gross injustices and repair capital’s rift with nature.

The corporate rich that now rule the world, stole much of their starting capital directly or indirectly through colonial plunder. They destroyed numerous societies around the globe, many of which were organised for thousands of years around Indigenous social values of egalitarianism, cooperation and co-existence with nature.

An ecosocialist future would require a return to these principles, with the benefit of technological advances used for social good. Human creativity needs to be liberated from the drudgery of long working hours. Grassroots democracy must allow communities to have control over their destinies.

The movement in solidarity with Palestine reminds us that people’s political consciousness can develop rapidly in the process of sustained collective struggle. Such movements are schools of direct democracy. They can also give birth to new institutions of popular democracy. Therefore, it is of critical importance to build mass movements around immediate and transitional demands that point a way beyond capitalism.

In the context of the climate emergency, such measures could take the form of a radical Green New Deal. Or the universal adoption of the Fossil Fuel Non-Proliferation Treaty to scale down the fossil fuel industry on a binding annual schedule, while enabling countries of the Global South to access the energy they need for development.

It could also include the demand for the Global North to compensate the Global South for additional mitigation costs that climate change imposes on them — estimated at $192 trillion between now and 2050. This could be paid for by a wealth tax targeting the richest 10% in the Global North.

The Socialist Alliance seeks to build such a movement and to utilise whatever platform and means we can to popularise it, including electoral campaigns. But we understand that only an independent mass movement mobilised beyond the limits of electoral campaigns has the potential to change the system.

Join us in building that movement.

This article is based on Susan Price’s presentation to Ecosocialism 2024. Price is a Socialist Alliance national executive member and a Green Left editor.

 

William I Robinson: The global meaning of Gaza

By William I Robinson

Published 16 August, 2024

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First published at ZNet.

One of the hallmarks of radical social science is to place the “noisy abode” of headlines and the swirl of current events in a larger historical and structural context that give them deeper meaning. The genocide in Gaza and the repression and criminalization of Palestine solidarity on and off U.S. university campuses and around the world tell a larger story of global capitalist crisis. The absolute savagery of the unfolding genocide has touched a raw nerve throughout the world precisely because it brings home the high stakes involved as the dynamics of global crisis play out, from Kenya to Argentina, from France to the United States, from Bangladesh to Nigeria.

Structurally this crisis is one of overaccumulation. Chronic stagnation places mounting pressure on the political and military agents of transnational capital to crack open new spaces of accumulation. At the same time, these agents have to contain rebellion from below brought about by mounting discontent with the global status quo. But the crisis is as much political as it is economic. Rising inequality, impoverishment, and insecurity for working and popular classes after decades of social decay wrought by neoliberalism undermine state legitimacy, destabilize national political systems, jeopardize elite control, and give impetus to the rise of a neofascist Right. The Ukraine and Gaza wars along with the New Cold War between Washington and Beijing are accelerating the violent crackup of the post-WWII international system.

The crisis of social reproduction is particularly acute. The past half century of capitalist globalization has involved a very profound and ongoing restructuring and transformation of world capitalism that has involved a vast new round of primitive accumulation and expulsions around the world. Hundreds of millions of people have been displaced from the countryside of the former Third World and by deindustrialization in the former First World. The ranks of surplus labor, of those structurally excluded and relegated to the margins of existence, now number in the billions. The level of inequality worldwide is unprecedented. One percent of humanity controls 52 percent of the world’s wealth and 20 percent of humanity controls 95 percent while the remaining 80 percent has to make do with just five percent of that wealth. Billions of people cannot survive as social disintegration spreads. Whole regions and countries are collapsing. Millions more face displacement by conflict, climate change, economic collapse, and political, ethnic and religious persecution.

Surplus capital finds its alter ego in surplus labor as crises of overaccumulation expand the two antagonistic poles of this dialectical unity. The process of capitalist development “constantly produces and produces in direct ratio of its own energy and extent, a relatively redundant population of laborers, i.e., a population of greater extent that suffices for the average needs of the self-expansion of capital, and therefore a surplus-population,” famously noted Marx in Capital. “This is the absolute general law of capitalist accumulation” (emphasis in original). Decades of globalization and neoliberalism have relegated great masses of people around the world to marginal existence. In the coming years new technologies based on automation, machine learning and artificial intelligence combined with displacement generated by conflict, economic collapse, and climate change will exponentially increase the ranks of surplus humanity. In this age of global capitalism the system produces an historically unprecedented multiplication of surplus humanity; people who are proletarianized to be sure, but too numerous to be useful to capital as a reserve army, unable to consume, restless and on the move. They must be contained through the global police state whose contingent end game is extermination.

There is no more potent and tragic symbol of the fate of surplus humanity than the genocide now being perpetrated by Israel. The Palestinian proletariat in Gaza ceased serving as cheap labor for the Israeli economy when the blockade was imposed in 2007 and the territory became a vast, open-air concentration camp. Of no use to Israeli and transnational capital, Gazans stand in the way of global capitalist expansion in the Middle East and are entirely disposable. The October 7, 2023, Palestinian resistance attack came just as Israel and Saudi Arabia were to normalize relations, which in turn was supposed to stabilize the Middle East, deepen the Israeli-Arab regional economic integration that has taken off in recent years, and pave the way for a new round of transnational corporate and financial investment throughout the region.

While the attack put a temporary hold on those plans, the Israeli government, even in the midst of the genocide, set about granting licenses to transnational energy companies for gas and oil exploration off Gaza’s Mediterranean coast while Israeli real estate companies advertised for the construction of luxury homes in bombed out Gaza neighborhoods, and others spoke of resuscitating the Ben Gurion Canal Project. Donald Trump’s son in law, Jared Kushner has openly talked about seizing prime beachfront real estate in Gaza. In the larger picture, the siege appears as a form of primitive accumulation through genocide.

Capital’s extermination impulse

If these are the particular historical circumstances that constitute the background to the Gaza war, they also help us understand how the world-historic conjuncture of globalization and crisis can activate capital’s always-latent potential for extermination. Gaza and other such spaces around the world must be cleared for capitalist expansion. The ruling class fear mass uprisings in the face of ongoing and growing popular protest. Gaza is a microcosm and extreme manifestation of ruling class strategies to create new geographies of containment and butchery of surplus populations that stand in the way of transnational capitalist appropriation and expansion.

Gaza as a giant open-air concentration camp may be an extreme case of managing surplus humanity yet such mega-prison geographies are spreading around the world. In 2023, the Salvadoran government inaugurated its draconian mega-prison, Center for the Confinement of Terrorism, the largest in the world, locking up 40,000 prisoners, virtually all of them young, unemployed and impoverished. If Gaza shows us the extermination option, El Salvador provided a model of control over surplus labor based on manipulating insecurity and inducing fear in the face of crime and social violence, themselves the consequence of chronic poverty, unemployment and deprivation.

Mega-prisons as a method of containing surplus humanity has spread very rapidly. After the Salvadoran prison was opened, Brazil, China, Turkey, Thailand, the Philippines, and India, among other countries, announced similar plans for prisons holding tens of thousands of people. Between 2016 and 2021 construction began in Turkey on no less than 137 new prisons. In Sri Lanka the government announced in 2021 plans to build a 200-acre prison complex that would allow 100,000 people to be detained across the country – more than three times the prison population in that year. Egypt announced that year it would soon open a new prison to lock up 30,000 people. While there were already some 200 private for-profit prisons around the world, many of those under construction were to be “public-private partnerships,” with corporations contracted to build and run prisons – for a handsome profit, of course.

Paramilitary insurgencies and multinational military deployments have displaced upwards of seven million people in the Congo in recent years, most of them in the Eastern provinces, with the aim of opening up access to the country’s vast mineral resources, including abundant deposits of gold, diamonds, silver, cobalt, coltan, tin, oil, gas and more. Often reported as ethnic conflict or struggles among local factions for political control, these are proximate causes of transnational wars by capitalists and states to seize resources in which twin dimensions of the global police state merge: militarized accumulation, or accumulating capital and seizing resources through war and conquest, and accumulation by repression, or accumulating capital by mass repression of the working and popular classes.

Borders become less physical markers of territory than axes around which intensive control over those expelled is organized. They are ever more militarized. In the half century of capitalist globalization, no less than 63 border walls have been built worldwide to lock in or keep out surplus humanity. Along with repression meted out by states, transnational migrants are subject to the predation of human traffickers, slavers, drug cartels and other criminal gangs. Borders between national jurisdictions become war zones and zones of death. The US border patrol reported more than 7000 deaths at the Mexico/US border from 1998 to 2023, likely a great underestimate since it does not take into account those whose bodies were not recovered or the many who have died making the long journey through Central America and Mexico. The figures for deaths in the Mediterranean are shocking – more than 20,000 drowned or disappeared from 2014 to 2023.

Gaza, the Congo, and other such hellscapes are real-time alarm bells that genocide may become a powerful tool in the decades to come for resolving capital’s intractable contradiction between surplus capital and surplus humanity. Simply put, political chaos and chronic instability can create conditions quite favorable for capital. It is difficult not to heed the wakeup call as working-class populations abandoned by parties that once represented them turn to ethnonationalist ideologies and charismatic personages, as the global police state perfects its mechanisms of surveillance and repression with the aid of more and more sophisticated technologies, and as our communities continue to be pillaged and scorched, rendering the planet increasingly uninhabitable for vast swathes of the world’s population.

This is the “big picture” behind the intifada of solidarity with Palestine that exploded on and off our campuses in recent months. University administrators viciously attacked our free speech and academic freedom, calling in police and paramilitary forces to violently repressed peaceful student protests. But they were not acting alone. They were responding to the threat represented by the tidal wave of solidarity with Palestine to the interests of transnational corporate capital and the capitalist state, especially a military-industrial-security-intelligence-big tech complex. Research universities are heavily funded by corporations that are in turn intertwined with the state’s military, security, and intelligence agencies. My own campus, the University of California at Santa Barbara, receives multimillion dollar funding from Northup Grumman, Lockheed Martin, Raytheon, General Dynamics, Caterpillar, Hewlett Packard, and so on, in coordination with state agencies. These corporations invest heavily in Israel, including partnering with the Israeli Defense Forces to develop and deploy the military hardware and technology used in the genocide.

The demand by student and faculty protesters that our universities divest from these corporations is a direct threat to the interests of the transnational capitalist class (TCC). It should be no surprise that a consort of multimillionaires and billionaires in New York City instructed Mayor Eric Adams to send police to storm Columbia and other campuses in that city. The CEO of Palantir, Alex Karp, made clear the very high stakes that the TCC believed were at play in the protests. Palantir, a multi-billion-dollar high technology corporation based in Silicon Valley, signed an agreement in early 2024 with the Israeli Ministry of Defense to supply the Israeli Defense Forces with artificial intelligence and other digital technologies that were used in the Gaza genocide. “College campus protests are not a side show. They are the show,” said Karp. “If we lose the intellectual battle, we will not be able to deploy any army in the West, ever.”

William I. Robinson is Distinguished Professor of Sociology at the University of California at Santa Barbara. This is a modified version of an article that appeared in the summer 2024 newsletter of the Global and Transnational Sociology Section of the American Sociological Association.