SpaceX and beyond: How Olivia Steedman is leading OTPP to new frontiers of tech investing

On the lookout for rising stars that are 'solving a profound problem or delivering an unmet need'

Author of the article: Barbara Shecter
Publishing date: June 11, 2021

The Teachers Innovation Platform, known as TIP, made an immediate splash after launching in April 2019 with Olivia Steedman at the helm, choosing Elon Musk’s Space Exploration Technologies Inc. as its first investment. 

PHOTO BY PETER J THOMPSON/NATIONAL POST

Olivia Steedman chuckles when she thinks about the first tech investment she made for the Ontario Teachers’ Pension Plan.

Now the senior managing director of the pension’s ambitious innovation investment platform, in 2017 Steedman was still part of the team that had built Teachers’ into a major force in infrastructure. The field was getting crowded, though, as others had caught on to the value in the asset class, causing return compression and forcing them to adjust their strategy.

“What we decided to do was to take on earlier stage infrastructure risk, kind of like when you’re in equities and you go to venture, you just move a little bit earlier, which for infrastructure meant taking on construction risk and development risk,” Steedman recalled in a recent interview.

In early 2018, they invested in Stem Inc., an artificial intelligence-powered energy storage company based in Silicon Valley and backed by investors including the venture capital arms of General Electric and French energy giant Total SA.

“To be honest, looking back on it, I was initially so focused on the infrastructure element — the project finance piece — the interesting venture-growth element only sank in later,” Steedman said.

We realized the opportunity around direct investing in venture tech companies is a whole new world, a whole new way to get return

OLIVIA STEEDMAN OF OTPP

Still, it whet her appetite for a repeat of the early days of pushing the established pension plan into new areas like they had done with infrastructure. So, when a decision was made to create a new specialized department within the pension giant devoted to investing in later-stage companies using technology to disrupt incumbents and create new sectors, she threw her hat in the ring.

“Quite similar to our initial conversations around infrastructure, we realized the opportunity around direct investing in venture tech companies is a whole new world, a whole new way to get return. And we should be doing more of that,” she recalled

“I was so excited about this idea, I put my hand up and said I can build this for you. I helped build infrastructure, (and) no I don’t have tons of venture tech experience, but I know the organization and I know how to build a team and together we’ll build something great here.”

These days, it’s impossible to miss the venture-growth aspect of Steedman’s investments. The Teachers’ Innovation Platform, known as TIP, made an immediate splash after launching in April 2019 with Steedman at the helm, choosing Elon Musk’s Space Exploration Technologies Inc. as its first investment. That financing round reportedly raised more than US$300 million for SpaceX (Teachers’ stake was not disclosed) and valued Musk’s company at more than US$33 billion, but it also signalled something important about TIP: Its goal was to be big and bold and put Teachers’ on the map when it came to late stage-venture companies looking for a serious partner.

It’s a bold course to bring a massive pension fund into the next frontier of investing. But it’s not entirely uncharted. A few decades ago, it was unusual to see a pension fund investing in real estate, yet pensions including Teachers’ are now among the largest players in the sector. Infrastructure investing, too, was in a nascent stage when Steedman joined the investment group in 2002. With an $880 million portfolio, it represented just one per cent of Teachers’ total portfolio. By 2019, it had ballooned to nearly $17 billion and represented eight per cent of the pension fund’s assets.

Already, TIP has $3.5 billion in investments and posted a 16.3 per cent return in 2020.

“It’s been such as amazing ride,” said Steedman, a civil engineer and chartered accountant by training who got into investing after working in project finance at a large accounting firm, and landed a job at Teachers’ in 2002 as an assistant portfolio manager.

Steedman sums up the common theme among companies in the TIP portfolio this way: they are taking a shot at “solving a profound problem or delivering an unmet need,” she said. It is that investment philosophy that drew her group to SpaceX.

This image courtesy of NASA, shows a SpaceX Falcon 9 rocket, carrying the Crew-2 mission astronauts, lifting off from the Kennedy Space Center in Florida on April 23, 2021. PHOTO BY AUBREY GEMIGNANI/NASA/AFP VIA GETTY IMAGES

Within six weeks of meeting with SpaceX officials, the investment was a go — before the full TIP team was even in place.

“It’s how we need to operate in this new space,” Steedman said, adding that it was immediately clear to the TIP team that the investment “could be the perfect emblem of what we want to do and where we want to play.”

The headline-worthy investment may be a calling card of sorts for Teachers’, but they were attracted to more than just the plans to ferry ordinary citizens on commercial flights into outer space.

SpaceX’s telecommunications satellite launch business was an equal draw, and the combination illustrates a key plank of the TIP investment strategy, Steedman said.

The pension fund is looking to invest in companies that have a platform or anchor business that can support the development of riskier “disruptive” technology and services.

“What was perhaps interesting to SpaceX was that … they know we’re a long-term investor, we follow on (with subsequent investments) in companies,” Steedman said.

“Where we have conviction around something we’re going to be there to support the company.”

Since that initial investment, Steedman has built a team of close to 20 people who work in three TIP offices: Hong Kong, London and Toronto.

Last October, Kelvin Yu, a private equity and venture veteran of Sequoia Capital, Fosun Group and Partners Group, was hired to lead the team in Asia.

Then in January, Rick Prostko, a veteran Silicon Valley venture capitalist who worked at Comcast Ventures and was an early investor in grocery delivery app Instacart Inc., was hired to build a presence in San Francisco and head up TIP’s direct investing business in North America.

Before joining the Canadian pension firm, Prostko had made an investment in Calgary-based Attabotics Inc., a 3D robotics warehouse and supply chain company that caught the attention of Steedman last year. In August, TIP led a US$50 million series C financing round for the company whose logistics, Steedman said, were inspired by an ant colony.

“(It’s) vertical, with robots travelling up, down and around in three dimensions to pick up the goods and deliver them to humans on the edge,” she said. “All of a sudden you can fit really dense large-scale warehouses into a much smaller footprint and therefore you can put them in places closer to the customers.”

Jakob Moore of Attabotics Inc. organizes robot canisters in Calgary. Logistics for the 3D robotics warehouse and supply chain company were inspired by an ant colony. 

PHOTO BY DARREN MAKOWICHUK/POSTMEDIA

Teachers’ hasn’t disclosed a target for the ultimate size of its disruptive tech platform, which accounted for around two per cent of the pension fund’s $221.2 billion in net assets at the end of 2020. In the short term, according to an advertisement for a managing director in London, TIP aims to deploy up to $2 billion each year in markets around the globe, with about three-quarters of that capital destined for direct investments and the rest invested through funds.

Steedman’s goal is to have Teachers’ be the first call when companies that fit the profile are looking for funding and an ongoing relationship. To do this, she is leaning heavily on the pension fund’s reputation as long-term investor with global expertise and connections.

So far, TIP’s investments have come from a mix of referrals and knocking on doors. Steedman said a “funds book” of earlier stage financings that Teachers’ tucked into TIP is part of the pipeline of referrals — providing access both to companies to invest in and potential investment partners among Silicon Valley’s leading venture capital firms. Company founders are also starting to spread the word.

“It’s a whole cocktail of different sources. The vision, and we’ll get there, is to be a known brand in this ecosystem,” she said.

“What we’re trying to do is build our relationships, not just with the founders, but other players in the ecosystem, and in many cases we are partnering with them as well.”

When it comes to targets, TIP’s team is thinking globally, making investments in Asia, Europe and North America.

“What we’re focused on is later stage venture. There may be one or two exceptions but generally you’re not going to see us investing in brand new companies,” Steedman said. “We like to see revenues, we like to see a certain kind of scaling happening before we come in, so typically we’ll invest at the Series B and beyond stages.”

One of the latest deal in the works involves Kitchener, Ont.-based education tech company ApplyBoard, according to sources, but officials at TIP and ApplyBoard declined to comment.

The TIP platform’s “target cheque size” for initial investments is between $25 million to $250 million.

Among its early investments, TIP led the series B financing for Kry, a Sweden-based healthcare company that matches doctors to patients. Already growing when the COVID-19 pandemic hit, the company doubled its customer count and expanded to more than 30 countries, with TIP participating in another round of funding.

Last November, TIP led the series C financing for Pony.ai, an autonomous vehicle company whose earlier investors included Toyota and Sequoia Capital. It obtained licences and permits in California and Beijing, and its competitors include Waymo, established under Google’s parent Alphabet, and China’s Alibaba.

“The reality is, we’re two years into this journey and I think we’ve had a lovely debut,” she said. “But we need to continue to build our brand and have us be top of mind for founders. I think that will come, we can see it coming already, (but) until we are the first name that pops into their head, we need to focus on how we can help these companies scale and grow.”

If we see something that’s beyond our risk appetite, we’ll walk away

OLIVIA STEEDMAN

As happened with infrastructure a few years ago, the tech sector has heated up, leading to some lofty valuations, which can make the investment game tougher.

“On the one hand, the valuation and what’s happened with businesses … have been great but you need to be very careful and very disciplined, Steedman said. “If we see something that’s beyond our risk appetite, we’ll walk away.”

She acknowledged that such choices aren’t always easy — or obvious.

The current environment, she said, is a time to be “super selective” and to come to the table with “well-researched views” on different sectors and situations, something that is a common philosophy across the Teachers’ pension plan. While every investment at TIP is made with a view to making money, there is also a recognition that there will be losers.

“That sort of goes with the territory with earlier stage investing. You are taking more risk so you should expect more bumps in the road and some losses,” Steedman said.

“We do every single deal with an expectation that it’s going to be a very successful outcome but we’re prepared for that.”

She is also focused on finding ways for TIP to participate in upside without overspending by playing up commitments other than cash.

“We see this quite bit with some of our founders … it’s not just money and valuation that they’re looking for. They’re watching the markets as well and they’re seeing things pop and maybe get a bit peaky, and you know, generally speaking they want someone in their cap table who’s going to help them scale and navigate highs as well as possible lows,” she said.

“They want people who are going to be there for the long term and help them deliver on their own ambitions. And that’s what we offer when we’re speaking with founders. We’re here for the long term and we’ll follow on as your business grows and things go well, we’ll be here for you.”

• Email: bshecter@postmedia.com | Twitter: BatPost

GIC, CPPIB AND BOSTON PROPERTIES LAUNCH $2B US OFFICE JOINT VENTURE

2021/07/15 BY CHRISTOPHER CAILLAVET 

CPPIB had teamed with Boston Properties to purchase the Santa Monica Business Park in 2018

Singapore sovereign wealth fund GIC and the Canada Pension Plan Investment Board are headed back stateside, joining with commercial developer Boston Properties to create a co-investment programme targeting acquisitions of US office properties.

The trio are committing an aggregate $1 billion in equity to the programme, with GIC allocating $500 million and CPPIB and Boston Properties chipping in $250 million each. The partnership foresees an initial investment capacity of $2 billion after leverage.

The partners intend to selectively acquire and operate office assets in Boston Properties’ core markets of Boston, Los Angeles, New York, San Francisco and Washington, as well as Seattle, CPPIB said Wednesday in a release.

“We are delighted to expand our relationship with CPP Investments and to begin a new relationship with GIC, two highly respected and experienced real estate investors,” said Boston Properties chief executive Owen Thomas.
First-Offer Privilege

Despite reports that the COVID-19 pandemic could permanently diminish the central role of office properties in work culture, the partners have agreed that, over the next two years, Boston Properties will provide CPPIB and GIC with exclusive first offers to form joint ventures with the US firm to invest in acquisition opportunities.

Boston Properties boss Owen Thomas has some fresh backing for his office ventures

Boston Properties, which is the largest publicly-traded developer, owner and manager of Class A office properties in the US, will act as general partner and provide property management, leasing and other services.

“We firmly believe that top companies need collaborative workspaces to build culture, innovate and win the war for talent,” said Adam Gallistel, managing director of Americas real estate at GIC. “We are confident that Boston Properties will identify assets that serve this need and position our venture to capitalise on an uptick in demand stemming from a return to the office and the reopening of America’s great cities.”

The partners are setting up their $2 billion venture despite average office vacancy rates climbing nearly a full percentage point across the US during the second quarter, according to a report by Cushman & Wakefield. However, rents in major US markets are already on their way back up as tenants leased 15 percent more space from April through June than they had during the preceding three months, the property brokerage said.

Investment brokerage Hodes Weill & Associates advised Boston Properties on the joint venture.
Buying American

Separately and together, GIC and CPPIB have sought investment opportunities in the US real estate market in recent years, with the latter striking a couple of joint venture deals with Boston Properties.

GIC’s Adam Gallistel is ready to invest in more US commercial property

In March, GIC announced a joint venture with New York-listed RPT Realty, hedge fund Zimmer Partners and investment firm Monarch Alternative Capital, targeting the acquisition of over $1.2 billion in retail assets.

CPPIB’s collaborations with Boston Properties have included a project to develop a 1.1 million square foot (102,000 square metre) office campus in San Jose, California in 2019 and a $628 million joint acquisition of a business park in the city of Santa Monica near Los Angeles in 2018.

GIC and CPPIB had also teamed up for a US residential investment in early 2018, when they formed a joint venture with investment firm Cortland Partners with a targeted equity amount of $550 million to acquire and renovate 8,000 to 10,000 multi-family units in the US.

CPPIB expands bet on Colorado fracking by joining new venture


DAVID MILSTEAD

INSTITUTIONAL INVESTMENT REPORTER
PUBLISHED JUNE 10, 2021

With energy prices hitting prepandemic highs, the Canada Pension Plan Investment Board is recommitting to its Colorado oil and gas operations by joining up with a new multibillion-dollar venture that promises to get even bigger.

The CPPIB will sell its Crestone Peak Resources venture to a new company, Civitas Resources Inc., which will be the product of two publicly traded Denver companies – Bonanza Creek Energy Inc. and Extraction Oil & Gas Inc. – with extensive Colorado drilling and fracking operations. The CPPIB will receive shares currently worth roughly US$1-billion and own about 26 per cent of the new company.

The CPPIB has committed around US$1-billion to Crestone since 2015, making it just a tiny part of the Canadian pension plan’s $497.2-billion in assets. But it may be the holding in the CPPIB’s portfolio that brings the debate over energy investing and climate change into sharp relief: Crestone, engaged in hydraulic fracking in communities on the edge of the Denver metro area, has run into significant citizen opposition and environmental criticism.

Cynthia Williams, a professor at York University’s Osgoode Hall Law School, has argued the CPPIB should make investments consistent with the Canadian government’s commitments to carbon-emissions reduction.

As part of the Crestone announcement, Bonanza Creek CEO Eric Greager said Civitas plans to be Colorado’s first carbon-neutral oil and gas producer, based on what are called Scope 1 and Scope 2 emissions – its direct emissions and emissions from the energy it purchases to run its operations, respectively. That does not include all other indirect emissions from its business operations, such as those created when its products are used by consumers (Scope 3 emissions).


Civitas will purchase carbon-offset credits to achieve that goal, Mr. Greager said in an investor call earlier this week, without disclosing how much will be needed to achieve it. “We’re intent on doing absolutely everything we can to reduce operational emissions,” he said. “But even when you’ve gotten as far ... as you can possibly go, our business has a carbon footprint.”

The deal values Crestone at US$1.3-billion, including US$250-million in bank debt. Bonanza Creek will first acquire Extraction, which emerged from a seven-month bankruptcy process in January. Then the combined company, newly dubbed Civitas, will acquire Crestone. The companies hope to close the deal by year-end; the CPPIB will place one person on the nine-member board. Civitas is expected to list on the New York Stock Exchange.

In a statement, Michael Hill, the CPPIB’s head of sustainable energy for the Americas, said Crestone “has demonstrated its commitment to operational strength and efficiency, along with its introduction of innovative sustainability practices.” The new company creates “a stronger platform ... with significant free cash flow and the potential to continue value creation.” On March 31, the CPPIB had $20-billion in direct energy investments, divided equally between its Power & Renewables group and conventional energy.

The combined company will be a dominant player in what’s called the Denver-Julesburg Basin, which is centred in eastern Colorado but stretches into neighbouring states of Wyoming, Nebraska and Kansas. Analyst Phillips Johnston of Capital One Securities Inc. said the deal “cements the notion that the new Civitas Resources is the natural consolidator of the DJ Basin, so it appears a roll-up story in the basin is firmly under way.”

Bonanza Creek had largely stuck to rural areas, avoiding the political challenges that can come from obtaining drilling permits in the cities and towns of the Denver metro area. But both Extraction and Crestone drill extensively in the communities surrounding Colorado’s capital.

That has led to controversy for Crestone. In 2020, The Globe and Mail detailed citizen unhappiness with a number of Crestone safety incidents, including a well-venting accident in September, 2017, that sent gases into a playground, and a fire in December, 2019, that sent seven workers to the hospital.

Even as the companies announced their transaction this week, they also had to acknowledge a fire at a Crestone site on Saturday in Arapahoe County, part of the Denver metro area. In a statement, Crestone said no injuries were reported, and no evacuations were necessary. There are no structures within a mile of the well pad, Crestone said. “Bonanza Creek, Extraction and Crestone Peak are focused on safety as our highest priority and core value,” Mr. Greager told analysts.

An investor presentation on the deal says Crestone should add US$400-million in EBITDA, or earnings before interest, taxes, depreciation and amortization, US$105-million in free cash flow, and production equal to 45 thousand barrels of oil a day to Civitas’ numbers. Crestone has 120,000 acres and 450 drilling locations in Colorado.

The companies expect to generate US$45-million in cost savings, three-quarters of which will come from reducing office space and cutting administrative staff and executives, said Matt Owens, the Extraction CEO who will serve as chief operating officer of the new company.

Leo Mariani, an analyst for KeyBanc Capital Markets, estimates the price paid for Crestone at US$29,000 per flowing barrel, which would make it twice as high as what Bonanza Creek paid for Extraction and for HighPoint Resources Corp., which was acquired in April. Price per flowing barrel is a company’s enterprise value divided by the number of barrels it produces daily.

CPP Investments must stop investing in companies benefiting from Uyghur persecution

PUBLISHED JULY 18, 2021


Container trucks at the Urumqi China-Europe Railway Express Hub in Urumqi, Xinjiang Uyghur Autonomous Region, China, July 14, 2021.

STRINGER/REUTERS

Irwin Cotler is the international chair of the Raoul Wallenberg Centre for Human Rights, an emeritus professor of law at McGill University and a former minister of justice and attorney-general of Canada.

David Kilgour is a lawyer and author who was a member of Parliament for almost 27 years and served as secretary of state (Asia-Pacific). Together with David Matas, he was nominated for the Nobel Peace Prize in 2010 for his work against organ pillaging in China.

Do Canadians want their financial futures built on the suffering of China’s persecuted Uyghur minority?

This question is raised by the practices of the Canada Pension Plan Investment Board (CPP Investments), which has invested billions of dollars of CPP contributions deducted from Canadians’ paycheques into Chinese and multinational companies identified as using Uyghur forced labour.

Forced labour is an integral component of the Chinese government’s systematic persecution of the Uyghurs, recognized as genocide by Canada’s and some European parliaments, as well as the U.S. State Department.


As of Sept. 30, 2020, CPP Investments had invested more than $55-billion in Chinese companies, about 12 per cent of their total assets ($456-billion) at the time. This included investments in major companies blacklisted by the U.S. government because of their business practices or ties to the defence or surveillance technology sectors.

CPPIB, AIMCo commit $2.4-billion to help fund expansion for wireless infrastructure firm BAI Communications

Other large Canadian pension plans, including the Ontario Teachers’ Pension Plan and major public-sector plans in British Columbia, have also invested in companies linked to the Uyghur genocide. However, CPP Investments’ actions are of particular concern, as they make 20 million CPP contributors and beneficiaries from coast to coast complicit in China’s persecution of the Uyghurs.

Last year, the Australian Strategic Policy Institute (ASPI), a non-partisan think tank, presented compelling evidence that Uyghurs moved from their homes in the Xinjiang region to other parts of China are working as forced labour in the supply chains of 82 international brands, including Amazon, Apple, Google, Nike, Samsung, Sony and Volkswagen.

This should be of concern to Canadians who strongly supported members of Parliament when they voted 266-0 in February to recognize that China’s government is conducting a genocidal campaign against Uyghurs and other Turkic Muslims. Subsequent polling by Angus Reid indicated that approximately three-quarters of Canadians agreed that China’s actions constitute genocide. Almost four in five respondents also said respect for human rights and the rule of law should supersede trade and investment opportunities in Canada’s dealings with China.

CPP Investments, which is accountable to Parliament and federal and provincial ministers of finance, has a mandate to invest almost $500-billion of CPP assets “to maximize returns without undue risk of loss.” The purpose, CPP Investments states, is to help provide a foundation upon which Canadians can build their financial security in retirement. But the retirement security of Canadians should not be built on financial returns from genocidal practices.

One of the guiding principles of CPP Investments states: “We at all times meet or exceed the high ethical standards expected of us by the over 20 million CPP contributors and beneficiaries.” As a petition recently posted by Stop Uyghur Genocide Canada states, CPP Investments’ ethical commitments require it to act immediately to 1) divest from all Chinese companies and 2) divest from all multinational companies identified as using Uyghur forced labour in China in their operations or supply chains.

Some might ask why it is necessary to divest from all Chinese companies. China’s government has never ratified International Labour Organization rules against forced labour and does not allow free and independent verification of workplace conditions, so it is impossible to distinguish Chinese companies using forced labour from those that don’t. The only way to avoid reaping returns from such an inhumane practice is to divest from all Chinese companies.

The Chinese government also persecutes the people of Tibet and members of the Falun Gong spiritual movement. Reports indicate it is forcibly removing the organs of political prisoners, including Uyghurs, for transplant. We have witnessed China’s intimidation of Taiwan and its cruel and unjustified imprisonment of Canadians Michael Spavor and Michael Kovrig. And the Inter-Parliamentary Alliance on China has called for sanctions on Chinese and Hong Kong officials for the violation of international law and for human-rights abuses in Hong Kong.

All this raises the question: Is a bullying country that repeatedly violates international norms a good and secure place to invest? The more immediate issue, however, is ensuring that CPP Investments is not investing the pension contributions of Canadians in companies linked to the Uyghur genocide. The time for action is now.
Editor’s note: After the March, 2020, publication of the Australian Strategic Policy Institute report that highlighted the situation in Xinjiang province, CPP Investments undertook a targeted review of its investments in the region in light of the conditions, in addition to its geopolitical and reputational risk assessments, and engaged in dialogue directly with holdings that were implicated.

As of March, 2021, CPP Investments had invested $57.5-billion in Mainland China, including real estate, public equities, private and real estate investment funds, and direct investments, representing 11.6 per cent of the fund’s total assets.

IRWIN COTLER (FORMER LIBERAL JUSTICE MINISTER ZIONIST) 

AND DAVID KILGOUR (FORMER CONSERVATIVE MP, SHILL FOR FALUN GONG CULT)

CONTRIBUTED TO THE GLOBE AND MAIL
INCLUDES CLARIFICATION

Puerto Rico's governor calls lack of statehood "geographic discrimination"


BY CAITLIN YILEK

JUNE 23, 2021 / 8:01 PM / CBS NEWS

Puerto Rico Governor Pedro Pierluisi said the U.S. territory's lack of statehood is a form of discrimination and called on Congress to lay out steps for the island to become a state.

The island's residents, who are U.S. citizens, can vote in presidential primaries but cannot vote for president and do not have a voting member in Congress.

Is statehood the answer to Puerto Rico's problems?

"You're talking about 3.2 million American citizens residing in Puerto Rico and facing what I call geographic discrimination," he said Wednesday in an interview with "Red & Blue" anchor Elaine Quijano. "If they move to Florida, Texas, New York, the Carolinas, they're treated equally. Why? That makes no sense."

"We want to have the same rights. We want to vote for president, have a congressional representation — voting congressional representation — and equal treatment in all the federal programs. It's about time that happens."

Two bills in Congress offer different paths to determine Puerto Rico's future status. One measure would lay the groundwork for statehood if a majority of residents voted in favor of it. The other would provide residents several additional options to choose from, including independence or remaining a U.S. commonwealth.

Hong Kong’s press freedom clampdown echoes around the world

Chief Executive Carrie Lam has been named a media "predator" by an international watchdog.

by ROBERT GERHARDT 

HKFP

25 JULY 2021

Since my last press freedom round-up in early June, much has happened in Hong Kong. Apple Daily closed, the trial of the first person arrested under the National Security Law began, more democratic politicians have resigned their posts and others wait in jail for their court date.

RTHK continues to cancel programming and scrubbing its archive, and threats to the free press arise both through potential new legislation and the effects of the National Security Law, now into its second year

.

Supporters of Apple Daily hold its final edition outside the newspaper’s headquarters in Tseung Kwan O on June 24, 2021. Photo: Studio Incendo.

In the midst of all of these developments, last month I exchanged emails with a journalist acquaintance of mine in Hong Kong.

“[Y]ou really have to be here to get a true feeling of what is happening,” he replied. “Things like issuing statements and the language that you can use take on a different perspective when you are actually living under the national security law.”

The point he makes directly speaks to me, a resident of New York City. I do not live under the pressure that the national security law exerts on those living and working in Hong Kong.

So why do I write about Hong Kong and press freedom around the Asia-Pacific in general? In this day and age, in a connected world, nothing happens in a vacuum. What affects Hong Kong has echoes on other parts of the globe. Methods used to suppress the press in Hong Kong and around Asia mirror those used in other countries.

The closure of Apple Daily sent shivers through the corps of journalists in Hong Kong. While freedom of the press is enshrined in the Basic Law, the closure indicates just how much the national security law has undermined that basic principle.

But Apple Daily is far from the first newspaper or other outlet to shut down.

Jimmy Lai. Photo: Studio Incendo.

In a report last month, Reporters without Borders listed 22 newspapers shut down by governments looking to silence the press. It includes the Cambodia Daily which was forced to shut down in 2017, and numerous outlets in Myanmar that the junta has closed in the wake of the February 1 coup. But the list is not just limited to Asia. Governments in countries including Russia, Turkey, Egypt, Nicaragua, Tajikistan, Burkina Faso, Zambia, Niger, Venezuela, and Hungary have also shuttered news outlets over critical governmental coverage.

Jimmy Lai is also not the first journalist to be arrested and charged under various laws for their work. As of this writing, Reporters Without Borders counts at least 433 journalists in 35 countries behind bars. The number includes six currently in Hong Kong: Wan Yiu-sing, Gwyneth Ho, Claudia Mo, Cheung Kim-Hung, Ryan Law and the previously mentioned Jimmy Lai. All but Lai were arrested since February of this year.

Just on Thursday, four more Apple Daily journalists appeared in court under national security law charges and were refused bail.

In Bangladesh Tanvir Hasan Tanu, Rahim Shuvo, and Abdul Latif Lituar are all being investigated under the country’s Digital Security Act over coverage of Covid-19. They each face three to five years in jail if convicted. Belarusian authorities have been arresting journalists and raiding newsrooms over reports critical of the government of President Alexander Lukashenko. In Cuba journalists have been harassed and detained over coverage of the ongoing protests against the communist government.

Photo: RSF.
Reporters Without Borders also counts 20 journalists killed so far in 2021. Just since my last column, that number has grown by six: Maharram Ibrahimov and Siraj Abyshev in Azerbaijan (both on June 4th), Sulabh Srivastava in India (June 13), Alesksandr Lashkarava in Georgia (July 11), Peter R. de Vries in Holland (July 15), and Reuters’ Pulitzer Prize-winning photojournalist Dani

Earlier this month, the organisation named Hong Kong’s Chief Executive Carrie Lam as one of its 37 Press Freedom Predators for 2021. A blistering report terms her a puppet of Chinese President Xi Jinping who defends his positions on press censorship. It also cites her refusal to recognise the physical violence against journalists by the police during the 2019 protests; her targeting of Apple Daily and its subsequent closing; her “judicial harassment” of Jimmy Lai; and her campaign against Radio Television Hong Kong and subsequent editorial interference.

Of the 37 people listed on the report, 13 are from Asia. Along with Lam there is Gotabaya Rajapaska (Sri Lanka), Hun Sen (Cambodia), Imran Khan (Pakistan), Kim Jong-Un (North Korea), Lee Hsien Loong (Singapore), Min Aung Hlaing (Myanmar), Narendra Modi (India), Nguyen Phu Trong (Vietnam), Prayut Chan-o-Cha (Thailand), Rodrigo Duterte (Philippines), Sheikh Hasina (Bangladesh), and Xi Jinping (China).

The complete list includes world leaders from every continent. All are willing to use every tool at their disposal to silence the press, through enacting or enforcing draconian laws, intimidation by security forces, closing down news outlets, cutting internet access, arbitrary arrests, and in some cases murder.

US President Donald Trump meets the media on April 4. Photo: The White House/Flickr.

Under President Trump the United States was unwilling to work with allies to try and take a stand for journalists. Trump’s constant statements about “fake news” and journalists being “the enemy of the people” did nothing to help. Those complaints were in turn echoed by other world leaders, adding to the harm they caused. His use of the US Justice Department to secretly obtain e-mails and phone numbers from journalists to try and uncover their sources was beyond the pale.

With the protests over the killing of George Floyd in 2020, the United States also saw more then 400 journalists assaulted and 139 arrested in 2020 according to the U.S. Press Freedom Tracker. So far in 2021, 52 journalists have been either arrested or detained and 80 more have been assaulted.

Recent polling by the Reuters Institute for the Study of Journalism at Oxford found that the United States ranks last out of 46 countries for trust in the media. Just 29 per cent of people surveyed said they trusted the media, while 75 per cent of those on the right thought news coverage was biased.

President Biden has vowed to protect the press, and Merrick Garland, the new head of the Justice Department, has implemented new rules that will no longer allow journalists’ records to be seized. But fixing trust in the media, even in the United States, is not going to happen quickly given the politically charged environment and Trump’s continued control of his right-wing base. And whether the Biden administration can take steps on the international stage to protect press freedom around the world remains to be seen.

Photo: Studio Incendo.

Now a new threat has emerged: Pegasus. The spyware programme developed by Israeli company NSO has been found on the phones of journalists, activists, politicians and heads of state around the world. The numbers of more than 180 journalists are among phone numbers that, it is believed, have been identified as people of interest by clients of NSO, although there is no information on whether their phones were in fact bugged.

These are very chilling revelations and show just how far some governments will go to try and silence dissent and how anyone can be a target.

It doesn’t matter where you are. As attacks against journalists continue around the world, world leaders pass and enforce laws against fake news, and spyware gathers data on those who seek the truth, the world becomes a much less safe place. From Hong Kong to New York City these manoeuvres reach across borders.

And until those would silence free speech and the free press face real consequences for their actions, journalists, activists and anyone who speaks truth to power will continue to suffer worldwide.

Pandemic and politics leaves Hong Kong’s poor languishing

On paper, Hong Kong is one of the world's wealthiest cities. But the city is also a poster child for inequality, and the other end of the spectrum tells a different story.

By Yan Zhao

HKFP

 25 JULY 2021

Squeezed into a tiny temporary apartment, Rainbow and her family struggle to make ends meet in Hong Kong, where the number of households in poverty has soared during recent political turmoil and the coronavirus pandemic.

For much of the last year, Rainbow’s electrician husband left their 290 square-foot (27 square-meter) studio flat each morning to look for work. Most days he returns empty-handed.

Rainbow and her daughter play during an interview in their temporary 290 square-foot (27 square-meter) studio flat in Hong Kong. Photo: Anthony Wallace/AFP.

“Before the pandemic, he could regularly work for 20 to 25 days a month, but now he only gets four to five days of work,” the 43-year-old told AFP, asking to use just her nickname.

“The worst was when he couldn’t find any job for a whole month.”

On paper, Hong Kong is one of the world’s wealthiest cities.

Per capita incomes are around US$48,000 — about the same level as Germany — while the government has enviable reserves of around US$116 billion despite a a year of heavy pandemic spending.

The financial hub hosts more than 5,000 billionaires, according to Knight Frank’s annual global Wealth Report, along with another 280,000 people worth US$1 million or more.






But the city is also a poster child for inequality, and the other end of the spectrum tells a different story.

Over the last two years the number of households earning just HK$9,100 ($1,170) or less a month has doubled to more than 149,000, according to a recent government report.

Rainbow’s family now languish in that income bracket, down from HK$25,000 a year ago, a pittance in place that routinely tops global surveys of the most expensive cities to rent or buy property.

She has capped her household’s daily food bill at HK$100 but does her best to make sure her two daughters — aged four and 18 — still eat healthily.

“We adults will eat canned goods, while the kids can eat fresh food,” she said.

‘A severe winter’

Hong Kong entered the pandemic with its economy already deep in recession after months of huge and often violent democracy demonstrations in 2019.

The protests were partly sparked by growing frustration towards the city’s unelected pro-Beijing leaders, who have struggled to tackle inequality or solve the acute housing crisis that makes Hong Kong one of the world’s least affordable places.

A surge in needy families over the time since was especially alarming because Hong Kong has few social safety nets, said Lai Hiu-tung of the Concern for Grassroots’ Livelihood Alliance charity group.

“Most of the relief measures are short-term or one-off,” she told AFP.

Maggie, 35, is from one of hundreds of families who have relied on twice-weekly food relief packages from Lai’s organisation in recent months.

She lost her sales job while pregnant with one of her two daughters and has not managed to find work since.



Her husband, who also works in sales, saw his income plunge 30 percent during the pandemic to just HK$14,000 a month.

“His company policy changed and he got much less in commission fees. The retail sector is going through a severe winter and much less people want to spend money on shopping,” she said.

She and her husband have considered trying to work for food delivery platforms. But competition is tight.

“Too many people are unemployed, it’s not just you who wants an extra job,” she said.

‘Not too bad a job’

Hong Kong’s unemployment rate soared to a 17-year high of 7.2 percent at the beginning of the year, although it has since come down a little.

Critics say Hong Kong’s leader Carrie Lam has prioritised China’s national security driven crackdown on dissent since the democracy protests and lost track of livelihood issues and the economy.

Law enforcement officials were promoted during a recent cabinet reshuffle, including former security chief John Lee who was made Lam’s deputy, a position that traditionally deals with livelihood issues.

Lam defended her administration’s record in recent interviews, arguing she had done “not too bad a job” and saying she planned to “make more effort” on issues like poverty alleviation.

Her five-year term expires next summer and she has said housing will be a priority.

 

The average waiting time for a public housing under has risen to 5.8 years during Lam’s tenure — more than 12 months higher than when she took office in mid-2017.

Rainbow’s family, who have been waiting more than seven years, live in a transitional unit.

In many ways they feel fortunate. Before that, they lived in one of the city’s many abysmal rooftop shacks — tumbledown homes crammed onto the tops of other buildings.

But she says she cannot rest easily watching her meagre savings deplete with each passing week.

“I can’t sleep and feel very unhappy,” she said. “Everyone feels the pressure.”

Meeting Paris emissions targets would bring more energy jobs globally, but not for Canada: study


Tom Yun

CTVNews.ca writer
 Sunday, July 25, 2021

TORONTO -- A new study has found that if the world were to meet the targets set out in the Paris Agreement, there would be eight million more jobs globally by 2050.

But in this scenario, researchers say some fossil fuel-dependant economies such as Canada would actually see fewer energy jobs.

The signatories of the Paris Agreement agreed in 2015 to reduce carbon emission in order to keep the rise in global temperatures to "well below" 2 C above pre-industrial levels, ideally limited to 1.5 C.

But many political leaders around the world, including in Canada, have raised concerns over the jobs that would potentially be lost in the fossil fuel sector as a result of decarbonization policies.

The international team of researchers based in Europe and Canada published their findings in the journal One Earth on Friday. They analyzed the job footprints in 50 countries and found that job losses in the fossil fuel industry would be outweighed by the gains in jobs created in clean energy.

Currently, around 18 million people are directly employed in the energy sector, the researchers estimate. Around 70 per cent are employed in fossil fuel industries, 26 per cent are employed in renewable energy and four per cent are employed in nuclear.

Under current trends, the number of energy jobs is expected to increase to 21 million by 2050. Researchers call this the "reference scenario."

However, if countries were to adequately transition away from fossil fuels in order to meet the Paris targets, researchers project that jobs in the energy sector would grow to 26 million.

In this scenario, 84 per cent of jobs would be in renewables and five per cent would be in nuclear, with only 11 per cent in fossil fuels.

Much of these job gains would come from manufacturing in the solar and wind industries.

"Manufacturing and installation of renewable energy sources could potentially become about one third of the total of these jobs, for which countries can also compete in terms of location," said study author Johannes Emmerling in a news release.

The Middle East, Southeast Asia, Indonesia and the United States could see the biggest job gains, given that these regions have a high potential for renewable energy and their fossil fuel sectors don't employ a large number of people.

But countries like Canada that have a significant number of jobs tied to fossil fuel extraction would actually see fewer jobs if the Paris targets were to be met, compared to the reference scenario, the study states.

"Extraction sector jobs are more susceptible to decarbonization, so there needs to be just transition policies in place," said first author Sandeep Pai in a news release.

Other economies reliant on fossil fuel extraction include Mexico, Australia, South Africa, Nigeria and Angola.

Pai, who recently completed his PhD at the University of British Columbia, says the large number of fossil fuel jobs in these countries also pose a barrier to getting climate policies passed in order to meet the Paris targets.

"In many cases, fossil fuel workers also hold political influence because of their history and high rates of unionization among others, so as we move to low carbon sources, it is important to have a plan in place for the general acceptability of climate policies," said Pai.

The next step for the research team is to study how the transition away from fossil fuels would affect wages, skill levels and educational requirements for workers.​

Monks Wood Wilderness: 60 years ago, scientists let a farm field rewild – here’s what happened

By Richard K. Broughton, originally published by The Conversation
July 22, 2021


In the archive of the UK Centre for Ecology & Hydrology there is a typed note from the 1960s that planted the seed of an idea.

Written by Kenneth Mellanby, director of the Monks Wood Experimental Station, a former research centre in Cambridgeshire, UK, the note describes a four-hectare arable field that lies next to the station and the ancient woodland of the Monks Wood National Nature Reserve. After harvesting a final barley crop, the field was ploughed and then abandoned in 1961.

The note reads:
It might be interesting to watch what happens to this area if man does not interfere. Will it become a wood again, how long will it take, which species will be in it?

So began the Monks Wood Wilderness experiment, which is now 60 years old. A rewilding study before the term existed, it shows how allowing land to naturally regenerate can expand native woodland and help tackle climate change and biodiversity loss.


The Monks Wood Wilderness field (outlined in red) shortly after abandonment in the early 1960s. UK Centre for Ecology & Hydrology, Author provided

How new woodland generates itself

A shrubland of thorn thickets emerged after the first ten to 15 years. Dominated by bramble and hawthorn, its seeds were dropped by thrushes and other berry-eating birds. This thicket protected seedlings of wind-blown common ash and field maple, but especially English oak, whose acorns were planted by Eurasian jays (and maybe grey squirrels too) as forgotten food caches. It’s thought that jays were particularly busy in the Monks Wood Wilderness, as 52% of the trees are oaks.


Jays habitually collect and cache acorns in autumn. Forgotten caches germinate into oak seedlings. UK Centre for Ecology & Hydrology, Author provided

The intermediate shrubland stage was a suntrap of blossom and wildflowers. Rabbits, brown hares, muntjac deer and roe deer were all common, but the protective thicket meant there was no need for fencing to prevent them eating the emerging trees. Those trees eventually rose up and closed their canopy above the thicket, which became the woodland understorey.

The result is a structurally complex woodland with multiple layers of tree and shrub vegetation, and accumulating deadwood as the habitat ages. This complexity offers niches for a wide variety of woodland wildlife, from fungi and invertebrates in the dead logs and branches, to song thrushes, garden warblers and nuthatches which nest in the ground layer, understorey and tree canopy.


The Monks Wood Wilderness in 2021, after 60 years of natural regeneration.
UK Centre for Ecology & Hydrology, Author provided

The Monks Wood experiment benefited from the field lying close to an ancient woodland, which meant an ample supply of seeds and agents for their dispersal – jays, rodents, and the wind. Such rapid colonisation of the land would be unlikely in more remote places, or where deer are superabundant.

But there are many woods in the UK that could expand by allowing adjacent fields to return to nature. This would eventually add up to a significant increase in total woodland cover.


The Monks Wood Wilderness (outlined in red) in 2014, after 53 years of natural regeneration. UK Centre for Ecology & Hydrology, Author provided

Tree planting or natural regeneration?

The UK is one of the least forested places in Europe, with just 13% forest cover compared to an average of 38% across the EU. Only half of the UK’s forest is native woodland, which sustains a wide variety of indigenous species. The rest is dominated by non-native conifer plantations grown for timber.

This situation is gradually changing. The UK government aims to create 30,000 hectares of new woodland each year until 2025, providing new habitat for wildlife and helping reach net zero emissions, as woodland stores more carbon than any other habitat except peatlands.

With the climate and biodiversity crises getting worse each day, there’s an urgent need to expand woodland fast. But how? Tree planting is the usual approach, but it’s costly. Saplings also have to be grown, transported, planted and protected with fencing and plastic tubes – that’s a lot of carbon emissions and potential plastic pollution, as tubes break down into the soil.

What about doing virtually nothing instead? Natural regeneration involves creating woodlands by allowing trees and shrubs to plant themselves under natural processes. It’s free and involves no plastic or nursery-grown saplings, which can introduce diseases. The result is woodland that’s well adapted to local conditions.


Oak seedlings were early pioneers in the regeneration of the woodland. UK Centre for Ecology & Hydrology, Author provided

Allowing the land to naturally regenerate sounds exciting, but planners and ecologists need to know where this approach is likely to work best. How abandoned land turns into woodland is rarely documented, as it usually happens where people have walked away.

The Monks Wood Wilderness fills in this gap in our knowledge as an example of planned natural regeneration that has been monitored over decades, with a second two-hectare field (named the New Wilderness) added in 1996 to expand the experiment.


Shrubland in the New Wilderness field after 25 years, with hawthorns blossoming. UK Centre for Ecology & Hydrology, Author provided

Since the 1990s, the two Wildernesses have been regularly surveyed by scientists counting and measuring trees on foot and tracking tree cover from planes and drones. These surveys documented the development of woodland over 60 years in our recently published study, revealing the patterns of habitat regeneration.

We can now finally answer Mellanby’s 60-year old questions. Within 40 to 50 years, the ploughed field became a closed canopy woodland with almost 400 trees per hectare. And as the canopy grows taller, more plant and animal species are arriving, such as marsh tits and purple hairstreak butterflies – mature woodland specialists that have made a home here as the habitat gradually converges with the ancient woodland nearby.

The Wilderness experiment shows what’s possible when nature is allowed to create rich, native woodland for free. I think Mellanby would be pleased with how it all turned out.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Teaser photo credit: UK Centre for Ecology & Hydrology, Author provided

The case for ecocentric socialism:

 Part 1

By Kamran Nayeri,

 originally published by Our Place in the World
July 22, 2021



“I wish to speak a word for Nature, for absolute freedom and wildness, as contrasted with a freedom and culture merely civil—to regard man as an inhabitant, or a part and parcel of Nature, rather than a member of society. I wish to make an extreme statement, if so I may make an emphatic one, for there are enough champions of civilization: the minister and the school committee and every one of you will take care of that.”

“…[I]n Wildness is the preservation of the World.”—- “Walking” by Henry David Thoreau, May 1862


“I feel so much more at home even in a scrap of garden like the one here, and still more in the meadows when the grass is humming with bees than at one of our party congresses. ”—- Letter to Sophie Liebknecht by Rosa Luxemburg, Breslau Prison, May 2, 1917

1. Introduction

This essay is a response to a question I was asked during a Zoom presentation and discussion about Ecocentric Socialism on May 7, 2021. The meeting was organized thanks to Mr. Farrokh Jafari and Ettehad-e Fadian-e Komonist (Fadian Communist Unity) who invited me. The presentation and discussion followed two earlier meetings they organized. In the first, Mr. Jafari introduced environmentalism and some of the environmental problems we face particularly in Iran. The second meeting was organized after a reading of two of my essays, “The Crisis of Civilization and How to Resolve It: An Introduction to Ecocentric Socialism” (October 2018) and “The Coronavirus Pandemic as the Crisis of Civilization” (March 2020), to discuss them and raise questions. These questions were then shared with me to prepare my presentation for May 7. The most important of these questions was this: “How does Ecocentric Socialism differ from other theories of socialism and ecosocialism?” Although I offered an outline of a response to this question in my Zoom presentation, it was clear that there is much more to be said in more detail. This is the task of this essay.

After an initial opening remark in which I focus attention on the problem of anthropocentrism, I will present textual arguments in Section 2 to demonstrate that anthropocentrism is a hallmark of human civilization for almost 5,000 years.

In Section 3, I will discuss how anthropocentrism arose as the reflection of alienation from nature as some groups of hunter-gatherers began to take up farming about 12,000 years ago in the process that is now called the Agricultural Revolution leading to the establishment of the first city-state civilizations about 5,000 years ago.

In Section 4 (ed. note: this will be Part 2 to be posted subsequently), I will outline the main features of Ecocentric Socialism and how it differs from other socialist and ecosocialist theories including some key policy implications.

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The case for ecocentric socialism: Part 1 - Resilience

The case for ecocentric socialism: Part 2

By Kamran Nayeri, 

originally published by Our Place in the World
July 23, 2021

4. Theory and Practice of Ecocentric Socialism

Ecocentric Socialism distinguishes itself from all other theories of socialism and ecosocialism by a conscious attention to the problem of alienation from nature as manifested in anthropocentrism.

Animistic ecological materialism

For about a decade, I have proposed a rethinking of the theoretical heritage of Marx and Engels that would do away with the dualism inherent in historical materialism by arguing for a theory of history deeply embedded in ecology (For the most recent statement, see Nayeri, 2020, October 2018; also see, Nayeri 2013). Central to my reconsideration is the ecological nature of humans and the scientific understanding of who we are and where we come from so that we can better understand where we are going.

We now know that life itself emerged out of inorganic matter and humanity’s lineage is from mammals, in particular primates, that eventually led to the emergence of the Homo genus over 2.8 million years ago and subsequently Homo sapiens who emerged at least about 300,000 years ago.  That is, society has emerged out of biology which itself emerged out of physical and chemical properties of inanimate objects. It follows that we are not just the sum total of our social relations but instead we are the sum total of our ecological and social relations over at least 2.8 million years.

Humans as “collective organisms”

We are even more embedded in the web of life than we could have imagined only two decades ago. In recent decades, the study of the human microbiome, the collection of all the microorganisms living in association with human cells and organs, has advanced greatly, although our knowledge of their relationships is still at infancy.

“These communities consist of a variety of microorganisms including eukaryotes, archaea, bacteria and viruses. Bacteria in an average human body number ten times more than human cells, for a total of about 1000 more genes than are present in the human genome. Because of their small size, however, microorganisms make up only about 1 to 3 percent of our body mass (that’s 2 to 6 pounds of bacteria in a 200-pound adult).” (National Institute of Health Human Microbiome Project, accessed March 17, 2020)

Although most biologists treat the microbiome as separate from the human body, they also acknowledge its essential role for our wellbeing:

“These microbes are generally not harmful to us, in fact they are essential for maintaining health. For example, they produce some vitamins that we do not have the genes to make, break down our food to extract nutrients we need to survive, teach our immune systems how to recognize dangerous invaders and even produce helpful anti-inflammatory compounds that fight off other disease-causing microbes. An ever-growing number of studies have demonstrated that changes in the composition of our microbiomes correlate with numerous disease states, raising the possibility that manipulation of these communities could be used to treat disease.”  (ibid. emphasis added)

The socialist biologist Michael Friedman also notes:

“Some biologists conceive of our microbiota as a hitherto unrecognized organ or organs fulfilling important physiological functions and networking with other organ systems, while many microbial ecologists propose that we are not ‘individuals,’ but collective organisms comprised of the person (mammal) and its entire microbiome. Many other species are also collective organisms, termed holobionts, tightly bound by evolution ever since the earliest eukaryotic cells arose from fusions of independent prokaryotes (non-nucleated cells, such as bacteria).”  (Friedman, 2018)

Lynn Margulis, the celebrated biologist and evolutionary theorist, with her co-author, Dorion Sagan (Margulis and Sagan, 2002), have argued for a theory of symbiosis which refer to mutual interaction involving physical association between “differently named organisms.” In the “Forward” to their book, the prominent evolutionary biologist Ernest Mayr writes: “At first considered quite exceptional, symbiosis was eventually discovered to be almost universal.”   Donna J. Haraway (216), ecofeminist and a philosopher of the interaction between science, society, and nature, has made symbiosis a foundation of her view of social life.

Thus, in a biological sense, a human maybe considered a “collective organisms,” an organic whole that is greater than the sum of its multiple constituent parts. This view of humanity is much closer to the philosophical holism of Hegel (1817) promoted also by Marx that “the truth is in the whole.”  Indeed, recent research has found a correlation between gut microbiota and personality in adults (Han-Na Kim, et.al. 2018). If microorganisms in humans may affect even our personality, how could they not have an impact on our history as a species?

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The case for ecocentric socialism: Part 2 - Resilience

POST GROWTH: LIFE AFTER CAPITALISM

Post Growth: Excerpt By Tim Jackson, originally published by Resilience.org

May 18, 2021

Ed. note: This piece is an extract from Tim Jackson’s book Post Growth published by Polity Press. You can find out more about the book on their website here.

As a capitalist, I believe it’s time to say out loud what we all know to be true: Capitalism, as we know it, is dead.-Marc Benioff, 2019

Shamed, dishonoured, wading in blood and dripping with filth, thus capitalist society stands.-Rosa Luxemburg, 1915

Our prevailing vision of social progress is fatally dependent on a false promise: that there will always be more and more for everyone. Forged in the crucible of capitalism, this foundational myth has come dangerously unravelled. The relentless pursuit of eternal growth has delivered ecological destruction, financial fragility and social instability.

Who killed capitalism?

Crime scene investigation

The most obvious answer to this question is: no one. Capitalism is alive and well, thank you very much, and living the high life in New York and Dubai and London. Beijing, even. And Davos, certainly. Despite their anxiety, no one at the World Economic Forum was seriously about to give up on capitalism. The introspection was an elaborate show. In fact, the principal outcome from the surprising self-flagellation was an all-too-familiar refrain: capitalism is dead; long live capitalism!

Stakeholder capitalism; capitalism with purpose; ‘woke’ capitalism, as the New York Times amusingly called it. These were to be the new incarnations of an old regime. They were paraded almost daily by those who, sometimes by their own admission, had benefited most from the old regime. (Why should we not entirely trust them? I couldn’t possibly imagine!) But beyond the sometimes distasteful rhetoric, and the unmistakable impression of power clinging on to power, lay the dawning realization that something extraordinary had happened to the foundational narrative on which social progress depends. So the question remains. Who or what was responsible?

For a while now, the most convenient suspect has been the global financial crisis. I’ve lost count of the number of attempts I’ve seen to compare the average growth rate before 2008 with the average growth rate in the years that followed. It’s so easy to conclude that the problems arise from the continuing ‘headwinds’ caused by the crisis. These commentaries miss the point completely. The decline was already happening decades before the crisis struck. The peak in labour productivity growth in most advanced economies was more than half a century ago.

Every now and then, a suspicion has caught hold that the problems are more deeply rooted. In November 2013, five years after the collapse of Lehman Brothers, the former World Bank chief economist and US Treasury Secretary Larry Summers gave a speech to the International Monetary Fund which sent something of a shock wave through the audience. The continuing uncertainties of the post-crisis years were not just temporary after-shocks. ‘The underlying problem may be there forever,’ he said. Low and declining growth may just be the ‘new normal’.

Summers was certainly not the only, or even the first, but he was certainly the most well-known economist to make such a claim. The repercussions were profound. For a while, it became acceptable to ask previously unthinkable questions. What if there just isn’t so much growth to be had anymore? What if sluggish demand is here to stay? The term ‘secular stagnation’ – first coined in the 1930s – was revived to describe a phenomenon that was becoming too obvious to miss: an increasingly visible long-term decline in growth rates, particularly in the mature economies of the West. As the futurist Martin Ford pointed out: ‘There are good reasons to believe that the economic Goldilocks period has come to an end for many developed nations.’ The reputation of the economic system (and of economics itself) certainly took a pretty heavy beating during the financial crisis and has struggled to regain its mojo in the intervening decade or so since. But to attribute capitalism’s woes to that time and that time alone is certainly wrong. The cracks were already visible beneath the shiny surface long before the crisis ‘made them manifest’.

Fargonomics

Another common suspect is the economic shifts that took place in the 1980s. The economics of ‘monetarism’ heralded a radical agenda of privatization and deregulation. Today’s predominantly neoliberal, free market policies stem from that time. They had a profound impact on society. It’s since that time in particular that inequality has risen, debt has expanded, anxiety and suicide rates have multiplied, obesity and lifestyle disease have accelerated.

‘In America, the emblematic core of capitalism, half of the 1980 generation are absolutely worse off than the generation of their parents at the same age,’ reveals Collier. In the intervening decades, capitalism has ‘continued to deliver for some, but has passed others by’.

That’s a kind interpretation. Less kind is Noah Hawley’s black-comedy crime series Fargo. In the second season of the show, set in 1979, a local family in Fargo, North Dakota, goes head to head with the infamous Kansas City Crime Family and comes off worse in the conflict. In the final episode of the season, one of the Kansas gangsters, Mike Mulligan (played by Bokeem Woodbine), arrives at the syndicate’s headquarters expecting promotion for his part in the downfall of the Fargo family. He’s shown to his new office in an unremarkable building and told by his manager that he’ll be ‘working closely with the accounting department, looking for ways to optimize revenue.’ Mike is mystified. ‘This is the future,’ his manager explains. ‘The sooner you realize there’s only one business left in the world – the money business, just ones and zeros – the better off you’re gonna be.’

Hawley’s message is clear, right down to the time the story took place: 1979. It was the year that Ronald Reagan announced his Presidential campaign and Margaret Thatcher came to power in the UK. Monetarism announced an era in which, as the Chicago School economist Milton Friedman infamously declared: the business of business is business. Social responsibility was irrelevant. The ethics of the city became virtually indistinguishable from those of organized crime. Charles Ferguson’s 2010 documentary Inside Job and Adam McKay’s 2015 comedy-drama The Big Short – two films about the financial crisis – make the same point.

It would all have appalled Adam Smith – the founding father of capitalism. But he wouldn’t have been remotely surprised. He knew only too well that self-interest left unchecked undermines the benefits of the market. He once railed deliciously against ‘an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it’. The target of his attack was ‘those who live by profit’ – or in other words, capitalists themselves.

Only the state could counter the dangers of runaway self-interest, Smith realized. Neoliberalism’s fantastic conceit was to neglect this advice completely. Instead, it argued, capital should be freed from government to the greatest extent possible. What ensued was a philosophical abomination. It had nothing to do with the ‘freedom’ of the market and no credibility in either theory or practice. Yet over the last two decades of the twentieth century its ideas became deeply influential across the world. It is quite simply Fargonomics. Its ethics are gangster ethics, the law of the jungle. And it’s created a form of capitalism that has worked exceptionally well for the few but continues to fail for the many.

The voices in Davos reflect a rising awareness of this failure. The assailant was known to us, they seem to imply. We made a mistake in trusting him. We understand now the lesson that Smith tried to teach us. We must reverse the damaging policies of the past and make capitalism work for everyone. Profit with purpose in Benioff’s view. A strengthening of ‘reciprocal obligations’ in Collier’s book. These proposals are clearly important. Revolutionary even, by recent standards. They represent a call for a return to capitalism’s ‘golden age’ – the immediate post-war period – where business was kinder, inequality was lower and the concept of social welfare mattered.

But as the Financial Times columnist Martin Wolf has pointed out, things aren’t that simple. Conditions have changed. ‘The egalitarian western societies of the 1950s and 1960s had a global monopoly of industry and a social solidarity bred by shared adversity,’ he wrote. ‘That past is a foreign country. It can never be revisited.’

It’s a salutary reminder that we cannot rewind history. But perhaps, as Maya Angelou suggested, we can still learn some of its lessons. If neoliberalism was the assailant, why was it allowed to wander free over so many decades, inflicting its pain across society? Why was the damage condoned for so long? What convinced us to buy this misreading of Smith’s vision of the market in the first place?