It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
You have a very powerful collective organisation at the top of society and then an isolated, atomised mass of people everywhere else… The alternative is to say lets get together and do this ourselves – let’s join in and participate in political movements.
Grace Blakeley
Ben Hayes reports from the latest Arise Festival event ‘Jeremy Corbyn and Grace Blakeley in Conversation’ held to celebrate the launch of Grace’s new book: Vulture Capitalism – Corporate Crimes, Backdoor Bailouts and the Death of Freedom.
Over 2,500 people joined an online forum hosted by Arise: A Festival of Left Ideas between economist Grace Blakeley and MP for Islington North Jeremy Corbyn to discuss her book Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom. Introduced by Arise’s Matt Willgress, attendees to the event reported tuning in from 57 different constituencies and 9 countries across the world.
Blakeley outlined how she sought to ‘challenge some of the biggest false narratives around economics’ with the book, including that socialism is purely defined by large state involvement in the economy and that capitalism can fundamentally be relied upon to deliver freedom. Emphasising the importance of analysing whose interests the state serves to understanding an economy, she pointed to an example of multinational corporation in aerospace manufacturer Boeing, arguing that its ties to the US government and military illustrated how many of those who profit the most from the American economy receive significant help along the way. Blakeley also reflected on the role of culture in maintaining the existing system- pointing out that whilst those in power keep it “through cooperation and class solidarity”, whilst promoting “individualism and division” to the majority- and called for an alternative base of pressure to be built up representing their interests.
Corbyn echoed this critique of the US economy’s relationship to the concept of freedom, and pointed to a domestic example of the post-privatisation water industry as an example of a “toxic” link between the government and large private firms. Praising Vulture Capitalism for “calling into question many of the common economic assumptions”, he called for socialists to build greater clarity on the model that they are seeking to develop. Corbyn also shared the emphasis on the role of culture in both maintaining and changing existing orders, highlighting the potential role of the trade union movement and its profile in wider society to “help build a world of solidarity” instead of “worshipping individual wealth and sharp elbows”.
Questions raised by those watching online covered topics including the government’s promotion of Freeports and Special Economic Zones, the economic policy of a likely Labour government, how the left can get its arguments out in the media, building participation in mass organisations, the 1976 Lucas Plan, international co-operation, democratic reforms, and building a culture of unity.
Blakeley argued that the creation of Freeports and Special Economic Zones illustrated how freedom for capital is prioritised above all else, and also emphasised the importance of understanding imperialism to any serious economic analysis. Calling for the left to throw itself into institutions based on collective interests, she warned that without a movement for positive change rooted in communities the growth of reactionary politics was likely.
Corbyn slammed Freeports as “being based on the illusion of development when in reality they represent an abdication of responsibility”, and called for “a message based on hope”- reflecting on how during his time as Leader of the Labour Party he aimed to make it a “community-based force”. Noting the successes of the social movement model of Brazilian trade unionism in defeating the Bolsonaro government, he raised the possibility of calling ‘People’s Forums’ in developing a sense of shared interest and participation. After commending Blakeley’s book for “giving us a greater understanding of the situation”, he concluded by stating that it was “our job to turn it around”. You can watch the full event below.
You can watch the full event on YouTube here or listen back on the Arise Festival podcast here.
You can buy Grace Blakeley’s book, Vulture Capitalism, here.
It seems that the Harpocrites while extolling their increase in funding development aid, forgot that Afghanistan is nowhere near Africa except perhaps in the dictionary.
All the recent focus on aid levels, however, could hide the fact that Canadian aid also needs to be made more effective, ie, it should be spent on poverty alleviation. Harper has mandated Afghanistan to become the largest recipient of Canada's largesse. This led world-renowned development economist Jeffrey Sachs to complain, "…the money going to Afghanistan and Iraq is really not development aid but security spending."
The G8 countries are spending $120 billion annually to deal with conflicts in Iraq and Afghanistan, but they can't find half that amount to deal with HIV/AIDS, Lewis said.
Meanwhile Harper announces an new policy direction for Canadian aid in order to end any association of HIS government with past, Liberal, governments that pushed for greater aid for Africa.
Answering a question in the House of Commons yesterday, Foreign Affairs Minister Peter MacKay pointed out that "Canada will double its international assistance from 2001 to 2010, with assistance to Africa also doubling in that time frame." Canada plans to increase its Africa funding to $2.1 billion for 2008-09, from $1.05 billion in 2003-04, and African aid makes up 40 per cent of all Canadian foreign aid. What's more, Canada's foreign aid budget is growing by eight per cent per year.
The Prime Minister’s Office was unable to provide documentation to prove his claim. A senior Canadian official said Canada’s aid budget for Africa will amount to $2.1 billion in 2008-09, but DATA, an aid agency co-founded by Bono, estimates Canada will need to increase aid by $479 million this year and next to meet its commitment. Only Japan and Britain are on track to meet their promise, DATA says.
Stronach said the amount set aside by the Conservative government falls $700 million short of that, and Harper is responsible.
Layton said the prime minister has reduced Canada's commitment to foreign aid while telling the world that it wasn't doing so.
"Mr. Harper simply isn't telling the truth and when it comes to life-saving foreign aid, that's despicable," Layton said.
Policy on the run is Harpers foreign affairs specialty. Like last years support for Israels war on Lebanon. Now he goes and does it again.
Prime Minister Stephen Harper signalled a major shift in Canadian aid policy yesterday, saying that Canada's primary focus is moving away from Africa and toward the Western Hemisphere.
"Canada's sole focus and primary focus is not necessarily Africa, but we remain engaged there, we will meet our targets and will move forward with that plan into the future," Mr. Harper told reporters at the G8 summit.
His push to deal with development aid in our Hemisphere bodes ill, premised as it is with hemispheric bilateral agreements in the context of an expanding North American Union. Harper clearly has mixed up the concept of Aid and Trade.
This hemisphere is not in need of development Aid, rather it is in need of Fair Trade. Instead we have Free Trade Zones, which are anti-union tax free havens for American and Canadian manufacturers, and the attempt to import Latin American workers into Alberta as cheap labour for the Tar Sands.
Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) Analysts expect that--as occurred in Mexico--CAFTA will attract foreign direct investment and boost Central American exports in certain sectors, but will provide little benefit to the rural and urban poor of the region.
The Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) includes seven signatories: the United States, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The U.S. Congress approved the CAFTA-DR in July 2005 and the President signed it into law on August 2, 2005. The CAFTA-DR has been approved by the legislatures in the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. Approval is pending in Costa Rica. The export zone created will be the United States' second largest free trade zone in Latin America after Mexico.
The United States is implementing the CAFTA-DR on a rolling basis as countries make sufficient progress to complete their commitments under the Agreement. The Agreement first entered into force between the United States and El Salvador on March 1, 2006, followed by Honduras and Nicaragua on April 1, 2006, Guatemala on July 1, 2006, and the Dominican Republic on March 1, 2007. The U.S. Government continues to work with Costa Rica to ensure timely and full implementation of the Agreement.
in the region, and strengthens protections for U.S. In addition to tariff reduction, CAFTA-DR provides new market access for U.S. consumer and industrial products and agricultural products. It also provides unprecedented access to government procurement in the partner countries, liberalizes the services sectors (see also financial services), protects U.S. investmentspatents, trademarks, and trade secrets. The Agreement covers customs facilitation and provides benefits to small and medium-sized exporters. Provisions are also included that address government transparency and corruption, worker rights, protection of the environment, trade capacity building, and dispute settlement.
At the Summit of the Americas in Quebec City, the Hemisphere's leaders may at last give serious consideration to the establishment of free trade from Argentina to Alaska. But the meeting will also give critics an opportunity to cite economic uncertainty and political instability in much of Latin America as a reason to oppose the trade initiative. With the Andean region from Venezuela to Bolivia in varying degrees of turmoil, and with Argentina on the brink of possible default, trade liberalization is under attack.
The Free Trade Area of the Americas (FTAA) (Spanish: Área de Libre Comercio de las Américas (ALCA), French: Zone de libre-échange des Amériques (ZLÉA), Portuguese: Área de Livre Comércio das Américas (ALCA)) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the American continent. In the latest round of negotiations, officials of 34 nations met in Mexico on November 16, 2003 to discuss the proposal. The proposed agreement was an extension of the North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States. Against the market are positioned Cuba, Venezuela and later Bolivia, Ecuador, and Nicaragua, which entered the Bolivarian Alternative for the Americas in response.
Discussions have faltered over similar points as the Doha round of World Trade Organization (WTO) talks; developed nations seek expanded trade in services and increased intellectual property rights, while less developed nations seek an end to agricultural subsidies and freer trade in agricultural goods. Similar to the WTO talks, Brazil has taken a leadership role among the less developed nations, while the United States has taken a similar role for the developed nations.
Talks began with the Summit of the Americas in Miami on December 11, 1994, but the FTAA came to public attention during the Quebec City Summit of the Americas in 2001, a meeting targeted by massive anti-corporatization and anti-globalization protests. The Miami negotiations in 2003 met similar protests, though perhaps not as large. The last summit was held at Mar del Plata, Argentina in January 2005, but no agreement on FTAA was reached. 26 of the 34 countries present at the negotiations have pledged to meet again in 2006 to resume negotiations.
This Hemisphere is rapidly industrializing which cannot be said for Africa which is being divided up by Imperialist interests including China. It is still in thralls of being hewers of wood and drawers of water for the G8 and G20 countries.
And development Aid is going into the pockets of private capital investment companies known as Vulture Funds, which in more developed countries are also known as Hedge Funds. Vulture Funds encourage ponzi get rich quick schemes.
Real development funding would be directed to villages and people, not governments, as the success of Micro-credit has shown.
Economic growth in Africa has picked up considerably in recent years to an estimated 5.9% in 2007.
But this has not come about as a result of any concerted action by the leaders of wealthy nations, insists, Sir Mark.
"A key driver of this growth has been high commodity prices," he points out, questioning whether the prosperity will last.
In the meantime, "the aid figures in many areas seem pretty disappointing" and global trade talks have stalled, he says.
"Progress is slower than I would have wished, than we all would have wished," he says.
Market access
President Museveni puts it more starkly.
Zambian President Levy Mwanawasa says the West must do more
"Almost all African countries are pre-industrial," he says, paraphrasing the voice of the West: "'You must stay producing the cocoa bean. I will process it for you. Stay in your place. Don't move up the value chain.'
"The G8 countries should not assume they have an advisory role in Africa," he says, insisting African governments are capable of deciding themselves how to bring about development.
"Where we need assistance now - or at least not obstruction - is in two areas: cheap electricity and infrastructure.
Free trade is another key to African development, President Museveni says, insisting that "Western countries have denied us access to their markets - deliberately".
Investigative reporter Greg Palast looks at the battle to end "vulture funds", where companies buy up debts of poor nations cheaply and then sue for the full amount.
At the close of the G-8 Summit in Germany last Friday, leaders of the world’s richest countries reiterated their commitment, first made in 2005, to cancel all of the debt owed by the world’s poorest countries. However, so-called “vulture funds,” or companies that buy up third world debt at rock-bottom prices and then sue the countries for the full value and more, are undermining any promises of debt relief. In February, BBC investigative journalist Greg Palast exposed on Democracy Now! how one vulture fund, Donegal International owned by US resident Michael Sheehan, was trying to collect $40 million dollars from Zambia after buying one of its debts for $4 million dollars. Soon after, Congressman John Conyers and Congressman Donald Payne brought this up with President Bush, and urged him to ensure that the G-8 summit would close the legal loopholes that allow vulture funds to flourish.
“Vulture Capitalism is not just a muckraking book, a collection of juicy scandals. Where a New York Times investigation ends is where Grace Blakeley really begins her work, which is to “look at how capitalism really looks.”
Vulture Capitalism is, at one level, a really good read, for the scandals that it brings together in one volume – like the Boeing 737 MAX debacle, where the pursuit of profits, lack of regulation, and corporate cost-cutting culture resulted in two crashes that killed hundreds of people, or the ways most of the $800 million allocated by Washington for the Paycheck Protection Plan (PPP) to enable workers to get through the COVID 19 pandemic actually ended up with their employers. Among the direct or indirect beneficiaries of the PPP were House Speaker Nancy Pelosi’s husband, Senate majority leader Mitch McConnell’s wife, and Representative Marjorie Taylor Greene, the notorious far-right conspiracy theorist. All owned businesses or were part-owners of enterprises that siphoned off PPP dollars meant for workers.
But don’t get fooled by the title, which was probably the bright idea of the publisher’s marketing department. Vulture Capitalism is not just a muckraking book, a collection of juicy scandals. Where a New York Times investigation ends is where Grace Blakeley really begins her work, which is to “look at how capitalism really looks.” For her, the scandals illustrate not just the doings of corrupt individuals or corporations but the larger, deeper, more encompassing structural corruption that is embedded system of capitalism itself.
Market Versus Plan
Blakeley begins her deconstruction of capitalism by taking up the market-versus-planning debate that continues to animate the economics profession. Neoliberals make out state planning as the greatest enemy of the market, the source of all the inefficiencies, distortions, and screw-ups in what would otherwise be a plain-sailing economic journey. Keynesians say the economy must be managed or “planned” to avoid market failures. Blakeley comes out straightforwardly and declares the debate to be largely a false one. Giant corporations can have a major distorting influence on the market, and their size and resources enable them to plan production not only at a corporate but at a social level. Effective control of the market by a few giants allows them to do large-scale planning even as they compete with each other.
Blakeley is refreshingly an unapologetic Marxist, and Marx could not have articulated his insights on the relationship between the market and planning for a contemporary audience better than her:
Capitalism is a system defined by a tension—a dialectic—between markets and planning, in which some actors are better able to exert control over the system than others, but in which no one actor—let alone individual—can control the dynamics of production and exchange entirely. Capitalism is a system that teeters on the knife edge between competition and coordination; this tension is what explains both its adaptability and rigid inequalities.
So, the real conflict is not between markets and planning, but the ends of planning, with accumulating profit being the goal of planning under capitalism, and—in theory at least—the general interest being the aim of socialist planning.
Making Economics Accessible
Blakeley does not introduce a new theory about the way capitalism works. “Most of the ideas discussed in this book are not new,” she tells us right from the beginning. “My argument is constructed based on the analysis of the work of well-known economists, with which academic readers will already be familiar.” She wants to make their ideas accessible to people. Given the well-deserved reputation of orthodox economics being the contemporary equivalent of the medieval theological preoccupation with how many angels could stand on the head of a pin, this task is not to be sneered at, since the alternative that many opt for is conspiracy theory, which is the default mode of analysis in populist circles on both the Left and the Right.
But making economic theories accessible does not mean making their ideas sound simplistic. Even when it comes to economists Blakeley disagrees with, like Friedrich Hayek, Ronald Coase, and Joseph Schumpeter, she is not dismissive and accords their views the critical analysis they deserve.
In the case of Schumpeter, for instance, the notion of the process of “creative destruction” destroying monopolies may have once been a powerful reflection of the dynamics of early twentieth-century capitalism. But it is a theory that has outlived its usefulness, Blakeley contends, because today’s corporations, with their massive assets, can control the process of technological innovation, buying out or stifling the growth of innovative corporations that may threaten their stranglehold on the market.
Blakeley brings aboard not only political economists to help us understand the dynamics of contemporary capitalism. She draws on the insights of the French thinker Michel Foucault to show that neoliberalism not only seeks to shape the economy but the personalities of people as well. Foucault pointed to the creation of the entrepreneurial self or homo economicus who is engaged mainly in terms of maximizing his self-interest. This self-conceptualization has the effect of undermining the possibility of collective action, resulting in the “destruction of society itself, and its replacement with a structured competition between individual human capitals—but on a fundamentally unequal playing field.”
The State under Capitalism
According to neoliberals, the contradiction between market and planning is a manifestation of the larger conflict between the market and state as the principal organizing principle of the economy. The reality is that both the market and the state serve the interest of capital. For the most part, this is not done in a direct, instrumental fashion like extending benefits and perks to individual capitalists, though there is no lack of cases where government contracts or legislation favors particular business interests, as the cases of Boeing and the PPP debacle illustrate. More important is the fact that the state pursues the “general” and “long-run interest” of the capitalist class. Instead of conceiving the state as an instrument of the capitalist class, one must see the state as an institution or set of structured relations that “organize capitalists into a coherent group, conscious of its interests and able to enact them.”
Blakeley is expressing here the view articulated by the French philosopher Louis Althusser, the Greek-French political economist Nicos Poulantzas, and the American political sociologist James O’Connor: that the state is characterized by its “relative autonomy” from economic power relations because its primal role is to stabilize a mode of production that is marked by sharp social contradictions. Perhaps the best conceptualization of this relationship between the political and the economic was provided by O’Connor who saw the relative autonomy of the state as stemming from the tension between its two functions: that is, it has to balance the needs of capital accumulation that increases the profits of the capitalist class and the system’s need for legitimacy to maintain stability. Welfare spending by the state may cut into capital accumulation, but it is necessary to create political stability. This tension gives rise to a stratum of technocrats to manage the tradeoffs between the two primordial drives of capital accumulation and legitimation. Management of this tension, which expressed itself in, among others, the trade-off between inflation and unemployment, was erected into a “science” by the followers of John Maynard Keynes, but this drew the ire of Hayek and his followers, who regarded the Keynesians tinkering with the market as courting economic inefficiency and subverting political freedom.
But Blakeley puts things in perspective. Keynes’s technocrats may engage in social spending but the purpose is to keep the system stable and preserve the class division between those who benefit from the system because they own the means of production and those who are exploited by it despite their being the beneficiaries of some crumbs from social spending. Proponents of reform capitalism were elated by the massive government stimulus programs during the Covid 19 pandemic, but, as in the case of the PPP—where workers received one dollar for every four allocated by the program, with the rest going to business owners like the Trump fanatic Marjorie Taylor Greene—it was the corporate elite and its allied upper middle entrepreneurial and professional strata that cornered most of the benefits of the U.S. government’s fiscal spending and monetary easing policies.
Needed: Another Book
Vulture Capitalism focuses on the class division between owners and workers central to capitalism and its ramifications throughout the system. There are, however, key dimensions of capitalism that Blakely does not tackle but which are central to understanding how it operates. Among these are the social reproduction of the system, where gender inequality and patriarchal oppression play a decisive role, and the way racism stratifies and differentiates the working class, providing what the great sociologist W.E.B. Dubois called a “psychological wage” that coopts white workers into supporting the system. But there is only so much one can pack into as single volume, so it can only be hoped that Blakeley will come out with another volume that will bring to these and related issues the same clearsighted analysis and engaging style she displays in her current book.
Also deserving of further analysis is democratic planning. The final section of the book presents us with examples of exciting possibilities for progressive planning, such as the detailed plan proposed by the workers of Lucas Aerospace Corporation to turn this British arms manufacturer into a producer of socially useful commodities and the innovative “participatory budgeting” formulated by the city government of Porto Alegre that spread to over 250 other cities in Brazil. Blakeley’s discussion of various democratic and socialist initiatives is a valuable complement to the late sociologist Erik Olin Wright’s book Envisioning Real Utopias.
It would have been useful, however, for Blakeley to draw out lessons from the failure of central planning in the Soviet Union and how democratic planning would be different, since many people associate socialist planning with the Soviet Union. Here, it would also be important to contrast Soviet central planning with Chinese planning, which allowed market forces to develop non-strategic sectors of the economy while restricting foreign investment in sectors considered strategic and prioritizing the transfer of technology from transnational corporations to key industries. True, there are some major problems with China’s technocratic development model, but an annual growth rate of 10 percent over 30 years and the radical reduction of poverty to two percent of the population (according to the World Bank) is not to be ignored, even by partisans of democratic planning, especially since, despite its technocratic bias, the “Chinese Model” is finding so many partisans in the Global South. Indeed, what else can one take away from the Biden administration’s adoption of industrial policy in its effort to catch up with China except Washington’s moving away from neoliberalism and the triumph of planning?
Again, you can only pack so many topics into one volume, but I raise these concerns related to democratic planning in the hope that, whether in articles or in books, Grace Blakeley will apply to them the same analytical acuity and clear exposition she has displayed in analyzing class conflict, the market, and the state in Vulture Capitalism.
In the Introduction to this book, Grace Blakeley says her aim is to show that “capitalism is not defined by the presence of free markets, but by the rule of capital; and that socialism is not defined by the dominance of the state over all areas of life, but by true democracy.” How far does she succeed?
The first premise is amply illustrated – from the huge sums of government money thrown at the under-regulated and cost-cutting American aviation industry, to the state bailouts for the US car industry which allowed Ford and others to continue to pay huge dividends to shareholders. Embracing neoliberalism has certainly not resulted in a smaller state: what has changed under its system is who benefits.
Pandemic piñata
The Covid pandemic underlines this. The US’s “Paycheck Protection Program” saw workers receive just $1 out of every $4 distributed through the initiative. The rest went to business and has mostly never been repaid. Many of the companies involved use tax havens to cut their tax bills. Several members of Congress benefited financially from the scheme, as did lobbyists. Meanwhile, millions of workers lost their jobs or were evicted by companies that received public money.
Likewise in the UK, “dozens of large companies that had accessed government support through the Bank of England’s Covid Corporate Financing Facility went on to lay off workers and pay out dividends to shareholders.”
Similarly, all of France’s top companies received some form of government support and paid out 34 billion euros to shareholders while cutting 60,000 jobs around the world. A recent report noted that “public assistance to the private sector now exceeds the amount paid out in social welfare.”
In Australia, a colossal A$12.5 billion of government money was given to companies that were “largely unaffected “ by the pandemic. All over the world, the same picture emerges.
The precedent for such largesse was set during the financial collapse of 2008. Although the crash is often blamed on corporate greed, in reality the investment banks would never have taken the risks they did without the implicit insurance of the central bank, and behind it the government. The crisis’s global dimension “was driven as much by crooked coordination between powerful actors as it was by unrestrained ‘free market’ capitalism. And when the crisis did hit, once again the state stepped in to shield powerful vested interests from the consequences of their own greed.” Prosecutions in its wake were almost unheard of.
Permanent subsidies and rigged rules
Big corporations expect a government bailout in a crisis, but for many industries public subsidies are a permanent state of affairs. The fossil fuel industry gets a staggering $5.9 trillion of public money worldwide.
In the world of exports, ‘free markets’ don’t really explain the dominance of the companies of the Global North over poorer countries, for all the neoliberal rhetoric about free trade. Attempts by the Global South to use industrialization to escape the cycle of dependency enshrined in their export of raw materials, have repeatedly been thwarted by richer countries, whether by direct political interference – as in the US-sponsored coup in Guatemala in the 1950s – or through Western-imposed trade rules. These prevent governments in poorer countries from protecting their fledgling industries against Western imports, themselves often state-subsidised.
Investor-state dispute settlements (ISDSs) are part of this international architecture, dreamed up – and arguably rigged – by the West. When after a lengthy legal battle, the Ecuadorian courts ordered Chevron to pay $9.5 billion in compensation for a massive toxic waste spillage in the country’s rainforest, the company closed all its Ecuadorian operations and launched an ISDS claim, which overturned the judgment. To add insult to injury, the Ecuadorian government was then ordered to pay $800 million of the company’s legal costs.
Blakeley concludes: “ISDSs are part of a growing body of international law that, with the active support of powerful states, has helped to routinise corporate crime on a mass scale.” They can be used to get compensation for companies whenever a government passes a law to discourage smoking or protect the environment. Canada, Mexico and Germany have all been forced to abandon or dilute environmental regulations and pay compensation to corporate polluters in recent years.
And this is just one mechanism that allows Western capital to penetrate overseas markets on unequal terms. The state-assisted exploitation of less developed countries can be violent and barbarous. “One of the first things the US government did with occupied Iraq was sell off state assets en masse. In doing so, the planners of the 2003 US invasion sought to share the spoils of the invasion with US businesses and introduce the disciplining hand of American capital into Iraqi society.”
Blakeley is hardly the first economist to highlight capitalism’s monopolistic tendencies. But what’s new here is how today’s giant companies use their privileged position not just to corner the market or raise prices, but to establish for themselves as much sovereignty as possible. This applies not just internally, for example in the case of Amazon’s ruthless approach to suppressing trade union organisation, but also externally, as with corporations involved internationally in human rights abuses.
In this sense, modern corporations constitute a form of private government, hierarchically centralised and controlled, and often unconstrained by the national laws of weak governments – in poorer countries especially, but not exclusively. And in many fields, such companies are empowered to act using force – from private armies to outsourced contracts for immigration detention and removal activities.
Democratic alternatives
Blakeley’s focus on economic democracy as an expression of nascent socialism is a lot shorter. The 1976 Alternative Plan for Lucas Aerospace was a significant milestone, but it may be overstating its importance to say “it provided inspiration for workers all over the world for the next several decades.” In any case, as one reviewer pointed out, “it was swatted aside by management.”
However, the author does produce some interesting examples of human cooperation and democratic planning: the New South Wales Builders Labourers Federation which refused to allow its labour to be used for harmful purposes; the Union of Farm Workers’ occupation of land in Andalusia after the death of the fascist dictator Franco in 1975; the Brazilian Workers Party’s experiment in participatory budgeting pioneered in Porto Alegre in 1989, which spread to over 250 cities in Brazil and another 1,500 around the world; the People’s Plan in the Indian state of Kerala in 1996; the post-2008 Better Reykjavik initiative in which 40,000 people pitched ideas to improve Iceland’s capital in an online consultation; the Preston Council experiment in Community Wealth Building; and quite a few others. While the levels of genuine popular participation in these experiments vary considerably and most proved short-lived, they do demonstrate the potential of this kind of democratic planning.
For Blakeley, the 1970-3 Popular Unity government in Chile showed that “it is possible to begin building democratic institutions at scale.” However, it also underlined that full control of the state apparatus is vital, to prevent not just capital strikes and flight, but also the possibility of a violent military coup of the kind that toppled Allende.
Democratising society through activity in trade unions and community campaigns falls some way short of this critical goal. The author’s section on “Democratise the state” says nothing about dismantling its repressive apparatus.
Vulture Capitalism is certainly worth reading for its well-argued critique of contemporary capitalism and the historical alternatives it explores. However, as with many books in this vein, how we proceed from the current mess to a more enduring socialist alternative is less clear.
Mike Phipps’ book Don’t Stop Thinking About Tomorrow: The Labour Party after Jeremy Corbyn (OR Books, 2022) can be ordered here.
Thursday, March 11, 2021
Wing tags severely impair flight in African Cape Vultures
Study urges the use of leg bands for marking individuals instead of wing tags
IMAGE: CAPE VULTURE WITH PATAGIAL (WING) TAG FITTED CORRECTLY TO THE PATAGIUM view more
CREDIT: VULPRO
Conservationists who apply wing tags for identifying Cape Vultures--a species of African vulture that is vulnerable to extinction--are putting the birds' lives further at risk, a new movement ecology study has shown. Researchers from the Max Planck Institute of Animal Behavior in Germany and VulPro NPC in South Africa have demonstrated that Cape Vultures fitted with tags on their wings travelled shorter distances and flew slower than those fitted with bands around their legs. The research emphasises the importance of investigating the effects that tagging methods can have on the behaviour and conservation of species, prompting a shift towards the less invasive method of leg bands in the future study of Cape Vultures.
For over a decade, many conservationists and NGOs have been marking vultures by placing a tag on the wing area known as the patagium. Patagial tags have the advantage that they are large and conspicuous enough for individuals to be identified from far away. Leg bands are smaller in size, fitted around the tarsus of the vultures leg and thus, harder to notice and record the unique number.
"After receiving many grounded and injured vultures from incorrect placement of wing tags, we felt there was an immediate need to find out exactly what these tags were doing to the flight of birds and whether this technique was, in fact, hindering the species rather than protecting them," says senior author Kerri Wolter, CEO of VulPro NPC, a vulture conservation organisation in South Africa.
The study was motivated by recent VulPro NPC research, which highlighted how an incorrect patagial tag could cause injuries and result in the grounding of vultures. To find out how patagial tags affected the birds' flights, researchers from the Max Planck Institute used GPS devices to track 27 Cape Vultures (Gyps coprotheres) marked with either patagial tags or leg bands.
The GPS devices, which were mounted to the birds' backs, recorded the birds' positions as often as every minute for 24 hours a day. These recordings allowed researchers to investigate the birds' flight performance, including occurrence of flight, proportion of time spent flying in a day, daily distance travelled and ground speed.
Individuals equipped with patagial tags covered a much smaller area in comparison to the leg band group. They were less likely to take flight and, when doing so, flew at lower ground speed compared to individuals wearing leg bands.
"Although we did not measure the effects of patagial tags on body condition or survival, our results strongly suggest that patagial tags have severe adverse effects on vultures' flight performance," says first author Teja Curk, a PhD student at the Max Planck Institute of Animal Behavior.
Vultures are scavengers. By feeding on dead animals, they play an important role in the ecosystem due to the services they provide, such as preventing the spread of infectious diseases, recycling organic material into nutrients and stabilising food webs.
"Therefore, restricted flight potential and a reduction in the area covered by these birds, caused by improper tag attachment, can have far-reaching consequences at the ecosystem level," says co-author Kamran Safi, a group leader at the Max Planck Institute of Animal Behavior.
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Original publication Teja Curk, Martina Scacco, Kamran Safi, Martin Wikelski, Wolfgang Fiedler, Ryno Kemp and Kerri Wolter Wing tags severely impair movement in African Cape Vultures Animal Biotelemetry 9(11) 09 March 2021
CAPTION
Cape Vulture with a coloured leg band. By feeding on dead animals, vultures play an important role in the ecosystem due to the services they provide, such as preventing the spread of infectious diseases, recycling organic material into nutrients and stabilising food webs.
CREDIT
VulPro
Monday, January 09, 2023
Why int'l community doesn't buy into "Chinese debt trap" myth
How ironic to see that the United States, though touting the Chinese debt trap fallacy in a high voice, holds its tongue on the topic of doing more to help poorer countries address debt burden.
BEIJING, Jan. 8 (Xinhua) -- Michael Ondaatje, one of Sri Lanka's greatest chroniclers, once said, "In Sri Lanka, a well-told lie is worth a thousand facts."
That seems true in the case of the "Chinese debt trap" myth, for which rumormongers frequently single out China's financing in Sri Lanka's Hambantota Port.
By making a fuss over the Chinese investment and the recipient's debt troubles, and turning a blind eye to the fact that most of the nation's debt comes from the West, the propagators attempted to peddle a "post hoc ergo propter hoc" fallacy and misrepresent the cause of Sri Lanka's economic woes.
The international community doesn't buy into the West's and particularly Washington's accusations of the Chinese debt. Instead, "many countries prefer the engagement with China ... because China is giving them a better option" with respect to their social models and governance, Shakeel Ahmad Ramay, chief executive officer of the Asian Institute of Eco-civilization Research and Development in Pakistan, told Xinhua.
Meanwhile, the Global South is well aware of the ulterior motives of U.S. lies about so-called debt traps, carefully orchestrated to undermine cooperation among developing countries, and to maintain the U.S. hegemony by plundering and manipulating other economies.
"DEBT TRAP" MYTH DEBUNKED
A widely-circulated factoid goes that Chinese banks offered Sri Lanka predatory loans to build Hambantota Port despite unprofitability of the project, and eventually pushed Sri Lanka into default so that the country had to surrender control to a Chinese firm in exchange for debt relief.
All these allegations don't hold water.
A recent report by New York-headquartered Liberation News press agency disclosed that an Indian pundit put forth the term in an article in 2017 without actually doing any research. Soon afterwards, some Western media and politicians worked perversely to hype the debt-trap fallacy with concocted stories.
In one egregious instance, BBC News edited an interview with Deborah Brautigam, a U.S. scholar who has challenged the falsehood, by deliberately omitting all evidence she cited against it to mislead listeners.
In fact, Brautigam, an international political economy professor at Johns Hopkins University, has concluded the debt-trap narrative is just "a lie, and a powerful one" after a lengthy research done in collaboration with Meg Rithmire, an associate professor at Harvard Business School. In an article published in the Atlantic in 2021, the academics argued that Chinese creditors are willing to restructure the terms of existing loans and have never actually seized an asset from any country.
As for the financial plight facing Sri Lanka, data from its Department of External Resources shows that as of 2021, a staggering 81 percent of the country's foreign debt was owned by U.S. and European financial institutions as well as Western allies Japan and India, in sharp contrast with the mere 10 percent owed to Beijing.
"Sri Lanka has 47 percent of its debt in international sovereign bonds, which are the most painful," Kasun Kariyawasam, a Sri Lankan economist, told Xinhua, referring to the plurality of his country's foreign debt owned by Western vulture funds and banks. Empirical evidence proves the claim against China is untrue and based on distorted narratives, he said.
"Sri Lanka could sink into the Indian Ocean and most of the Western world wouldn't notice," Subhashini Abeysinghe, research director at Colombo-based think tank Verite Research, told Brautigam.
Then why did this island country become so prominent in Western politicians' speeches since 2017?
With the Belt and Road cooperation in full swing, "China currently offers an alternative to traditional financing schemes, which has led to more prosperous and realistic development aid." Western countries see this as a threat and create a discourse to deter developing countries from engaging with China, Argentine economist Pablo Levinton told Xinhua.
Sri Lankan Foreign Minister Mohamed Ali Sabry has lately condemned the "Chinese debt trap" narrative as a "Western phrase."
When Sri Lanka went to China in search of funds, China was respectful and never forced Sri Lanka to take money, he said, adding China also provided Sri Lanka with some financial facilities and credit line, as well as some humanitarian assistance. TRUTH ABOUT CHINESE INVESTMENT
The enthusiasm across the Global South in participating in China-proposed development initiatives has rendered the Western anti-China propagation null.
China has signed Belt and Road cooperation documents with 150 countries and 32 international organizations, and the Global Development Initiative has equally won the support of more than 100 countries and international organizations.
There are many reasons why Chinese investment has been welcomed. Fundamentally, Chinese development financing is recipient-driven, as "infrastructure projects are determined by the recipient country, not China, based on their own economic and political interests," the above-mentioned Liberation News report observed.
Furthermore, China often advances loans at fairly low interest rates, and is willing to restructure the terms of existing loans to be more favorable to the borrowing country, or even forgive loans. As seen in the debt of African countries, the amount owed to Western private lenders is three times what they owe to China, and interest rates on private loans are twice those on Chinese loans, according to a study published in July by British charity Debt Justice.
In August 2022, the Chinese government announced it was forgiving 23 interest-free loans in some developing countries, in addition to China's cancellation of more than 3.4 billion dollars in debt and restructuring of around 15 billion dollars of debt in some developing countries between 2000 and 2019.
Many low- and middle-income countries prefer Chinese investment to that from the West, not only because China appears more like a benevolent creditor, but rich countries typically brand developing countries as high risks plus low rewards, and impose onerous conditions that delay project implementation and increase costs.
"Western lending tends to extend its conditions beyond loans ... and tends to invest in financial services and other industries related to the service sector," Sri Lankan economist Kasun Kariyawasam told Xinhua. In comparison, "Chinese loans are more flexible and do not include any non-loan conditions," and the funds commonly flow into "real assets that increase the value of the real economy."
Guided by the principles of sincerity, real results, affinity and good faith, and with a commitment to the greater good and shared interests, China endeavors to strengthen solidarity and cooperation with other developing countries and safeguard the common interests of the developing world, as stated in the report to the 20th National Congress of the Communist Party of China.
From the China-Laos Railway that transformed landlocked Laos into a land-linked hub to Kenya's Mombasa-Nairobi Railway contributing more than 0.5 percent to the African nation's economic growth, China has always upheld the principles of extensive consultation, joint contribution and shared benefits when partnering with other countries and abstains from internal interference.
Kenya is no stranger to the geopolitical games and anti-China narratives alike. Former Kenyan President Uhuru Kenyatta sighed that there are always some people who like to point fingers despite the fact that China has sincerely helped Kenya solve problems and meet its needs with actions.
Having witnessed the completion of the Chinese-built Kipevu Oil Terminal project in the coastal Kenyan city of Mombasa last year, Kenyatta said he was often asked why Kenya and China cooperate so closely, and he responded that is because China and Kenya respect each other and treat each other as equals.
Poll results effectively reflect the Chinese investors' image in the recipients' eyes. A survey released in June by Johannesburg-based think tank The Ichikowitz Family Foundation found that a majority of African youths see China as the most influential and positive foreign player on the continent. The principal reasons they cited for China's positive influence include affordable Chinese products, Beijing's investments in local infrastructure and China's creation of jobs. REAL CULPRIT
In his bestseller "Confessions of an Economic Hit Man," John Perkins suggested that debt trap is nothing new, but in light of its history, the real culprit of virtually every crisis was the United States.
The U.S. dollar as the globe's most dominant currency, Washington's hegemonic status in the international financial system and the spillover effect of U.S. policies, among other elements, have all contributed to the surge in national debt of developing countries.
In a report issued in August, researchers led by Professor Tang Xiaoyang of China's Tsinghua University found that with encouragement from Western financial institutions, the stock of sovereign bonds of all low- and middle-income countries rose by nearly 400 percent to reach 1,737.2 billion dollars from 2008 to 2020. Now interest payments to these Western institutions account for more than 63 percent of the total interest expenses of the bond-issuing countries.
Since the Federal Reserve's seven straight "jumbo" rate hikes in 2022 -- lifting the rates to 4.25-4.5 percent, a 15-year high -- could have dramatically impacted the debt construction or financial stability of these countries, a quite stronger dollar will substantially increase the debtors' repayment burden and eroded their solvency margin.
Under such circumstances, many borrowing countries have to issue new bonds with higher interest rates to repay old debt, sliding into a medium- and long-term vicious circle.
As the U.S. establishment hunted for prey and squeezed poor countries dry, vulture funds, pawns of U.S. interest groups and the Wall Street, have also set debt traps in developing countries to fill up their own pockets. The distressed debt investors typically buy sovereign debt of countries near or in default at deep discounts, then fiercely litigate to claim full payments and employ all possible tactics to bring debtors to heel.
Take Argentina's 15-year scuffle with Wall Street vultures. In 2001, Argentina defaulted on 100 billion dollars of sovereign bonds and offered debt revamps twice in 2005 and 2010, accepted by about 92 percent of the creditors, while a handful of vulture funds shunned the settlement process and hauled Argentina to U.S. courts, which had jurisdiction over the bonds.
Unfortunately, the U.S. federal court in 2014 barred Argentina from repaying other bondholders until it paid the holdout creditors, and forced the country into an agreement in 2016 to pay 4.65 billion dollars, a sum equivalent to nearly 1 percent of Argentina's GDP that year.
To settle a deal alone with NML Capital, a subsidiary of Elliott Management headed by Paul Singer, a mega-donor for the Republican Party, Argentina paid more than 800 million dollars for the bonds the hedge fund spent merely 48 million dollars on -- a return of more than 1,600 percent.
Speaking before the UN General Assembly in 2014, then Argentine President Cristina Fernandez accused vulture funds of practicing "economic and financial terrorism." It's even more horrible that the rogue debt collectors who Fernandez said caused "hunger, misery and poverty" were supported by the U.S. political establishment.
Argentina is by no means the only victim that has fallen prey to traps set by vulture funds.
Pierre Jacquemot, who served as the French ambassador to Kenya and Ghana, said at least 32 African countries encountered legal battles with vulture funds over distressed debt issues. His notion was reinforced in a study by Harry Verhoeven at Columbia University and Nicolas Lippolis at the University of Oxford, which found the rise in African debt due to Chinese lending pales in comparison with the debt burden created by private creditors of other countries in the last decade.
"Western lenders for long have not been put on the spotlight for debt relief because they successfully managed to dupe the world that it's only Chinese lenders that pose a threat to Africa," Uganda-based Vision Group journalist Mubarak Mugabo said.
As a matter of fact, China has extended debt suspension to other developing countries during the pandemic, but private lenders in the West did not, said Tim Jones, head of policy at Debt Justice.
How ironic to see that the United States, though touting the Chinese debt trap fallacy in a high voice, holds its tongue on the topic of doing more to help poorer countries address debt burden.
"Western leaders blame China for debt crises in Africa, but this is a distraction ... The UK and the U.S. should introduce legislation to compel private lenders to take part in debt relief," Jones said.
Should those Western countries truly care about the developing world, demonstrate their sincerity to give unflagging support long craved by the indebted countries or simply more concession on debt relief, instead of playing the old trick of "Chinese debt trap." Or at least, just stay out of the way of those genuinely lending a helping hand.
Clearly, they have neither such noble intention nor honorable deeds in this respect.
