The Global Town Teach-In:
Building a New Economy and New Wealth through Democracy Networks,
Green Jobs and Planning and an Alternative Financial System
Time and Day: April 25, 2012, 12 Noon Eastern Standard
Webpage: www.globalteachin.com
Goals
The Global Teach-In is designed to address the general problems associated with the Triple Crisis and the need to address alternative security policies. The “triple crisis” can be defined by: economics (inequality, deindustrialization, mass unemployment, or the privatization and “de-democratization” of public goods), the environment (pollution, increased greenhouse gas emissions, and depletion of species) and reliance on unsustainable energy supplies (diminished stocks of cheap oil, use of oil in hard to get or insecure areas, and substitution of land used to grow food to supply alternative fuels). The need for alternative security policies involves the need to transcend costly “hard power” and traditional military strategies in an era in which growing debt, ecological threats, the opportunity costs of military spending and the rise of asymmetric warfare reveal the limits to the traditional national security model.
Policies and Alternative Institutions
The Global Teach-In will discuss policy and institutional solutions at the global, national and local levels. First, we will discuss how a Green New Deal would expand jobs, investments and research in alternative energy and mass transportation. These will provide a means for reducing carbon emissions, creating new sources of wealth and increasing living standards. Second, we will examine how Green planning can lead to the creation of metropolitan regions where residential and labor markets are more proximate, where housing is sustainable and affordable, where products are designed to be durable and recyclable, and where designs generally reflect user interests and needs. Third, we will examine a variety of ways in which alternative economic institutions have been developed that serve to promote locally anchored and sustainable communities (in terms of ecological impacts and the durability of employment). These ways include institutions and policies such as: cooperatives, community and socially minded banks, sustainable utilities, buy local and green procurement policies, electoral measures mandating clean energy, campaigns to patronize alternative economic institutions, green civilian conversion of defense and petroleum-dependent firms, and more equitable taxation and alternative budgetary policies.
Constituencies
The Global Teach-In has been supported by academic, professional, media, labor, peace and environmental organizations and individuals associated with these. We aim to promote a broad coalition among such groups and political leaders, entrepreneurs, trade unions and interest citizens to foster a dialogue about the need for a new, comprehensive global agenda that can be initiated through a series of related local actions. We will showcase “best practices” and barriers to extending alternative models.
Format and Ambitions
The Global Teach-In will promote local study and action circles prior to the broadcast to facilitate an agenda for questions to guide discussions.
The Event
The April 25th, 2012 broadcast will be followed by discussions within localities about how to address the agenda proposed by the teach-in. The Global Teach-In will promote links and synergies between diverse constituencies and projects to help each locality achieve its objectives. For example, money moved into community banks can fund cooperatives and green technology projects. Alternative utilities and energy can help power new mass transit systems. Electoral measures to mandate alternative or clean energy can build green markets.
The Global Teach-In will take place in multiple locations through face to face meetings linked to an electronic broadcast in the U.S. and Europe including: Ann Arbor, Belfast (UK), Boston, Los Angeles, Madison, New York, San Francisco, Stockholm (Sweden), Washington, D.C. We are also interested organizing other locations and we welcome your suggestions and ideas. Interested parties should contact us at: globalteachin@gmail.com. Thank you for your interest!
Ayanda Kota
Chairperson, Unemployed People’s Movement
Grahamstown,
The centenary celebrations of the African National Congress (ANC) are being used to persuade the people that a movement that has betrayed the people is our government, a government that obeys the people, instead of a government of the elites, for the elites and by the elites. It is a hugely expensive spectacular designed to drug us against our own oppression and disempowerment.
In his Communist Manifesto Karl Marx wrote that “Each step in the development of the bourgeoisie was accompanied by a corresponding political advance of that class…The executive of the modern state is but a committee for managing the affairs of the bourgeoisie”. Here Marx is referring to the ability of the bourgeois to translate economic power into state power, thus reducing our governments to mere managers acting in the interests of capital and not the people. This has happened to governments around the world. But here our politicians are not mere managers. They are, like in Russia or India, a predatory elite with their own class interests and they support capital and repress the people as long as they can get their own share.
Since 1994 there hasn’t been a reorganisation of the economy. The commanding heights of the economy continue to reside in the hands of a tiny elite, most of which is white. Unemployment is sky rocketing. Most young people have never worked. Anyone can see that there is an excessive amount of poverty in South Africa. There are shacks everywhere. In fact poverty reigns supreme in our country. Every year Jacob Zuma promises to create new jobs and every year unemployment grows.
If things were getting better, even if they were getting better slowly, people might be willing to be patient. But things are getting worse every year. Poverty and inequality are getting worse. The government is increasingly criminalising poverty instead of treating it as a political problem. When people try to organise they are always presented as a third force being used to undermine democracy and bring back racism. But it is the ANC that has failed to develop any plans to democratise the economy. It is the ANC that has failed to develop any plans to democratise the media. It is the ANC that disciplines the people for the bourgeoisie. – a role that they are very comfortable to play! It is the ANC that follows the line of the World Bank and the International Monetary Fund. It is our local leaders who taking the leap from their old bosses, stealing from us, treating is with contempt, acting like the former colonial government and oppressing us.
During the struggle our leaders embodied the aspirations of the people. But once they took state power they didn’t need us any more. We were sent home. We are only called out to vote or attend rallies. But all the time our people are evicted from farms, paving way for animals as farms are turned into game reserves under the pretext of tourism. Our people are evicted from cities. Our people are denied decent education. The party has become a mixture of what Marx would call an instrument of power in the hands of bourgeoisie and what Fanon would call a means of private advancement.
Biko wrote that:
“This is one country where it would be possible to create a capitalist black society, if whites were intelligent, if the nationalists were intelligent. And that capitalist black society, black middle class, would be very effective … South Africa could succeed in putting across to the world a pretty convincing, integrated picture, with still 70 % of the population being underdogs.”
We, as the unemployed, belong to the 70% that Biko was talking about. We were happy to see the end of apartheid and we will always fight racism where ever we see it. But we are not free. There has only been freedom for the 30%. How can a person be free with no work, no house and no hope for their life?
R100 million is being spent on the celebration – spent to entertain elites, through playing golf and drinking the most expensive whiskey. Golf players are even receiving massages from young women sponsored by SAB. This is not a people’s celebration. We are absent! How some of us wish that all that money could have been used to build houses, create employment, build sport facilities or schools for kids who continue to learn under trees! Biko was right. As the world celebrates with the ANC today they put across a pretty convincing picture of freedom while everywhere people are broken by the burdens of poverty.
In his Wretched of the Earth, in the chapter called “The Pitfalls of the National Consciousness”, Frantz Fanon wrote:
“The leader pacifies the people. For years on end after independence has been won, we see him, incapable of urging on the people to a concrete task, unable really to open the future to them or of flinging them into the path of national reconstruction, that is to say, of their own reconstruction; we see him reassessing the history of independence and recalling the sacred unity of the struggle for liberation. The leader, because he refuses to break up the national bourgeoisie, asks the people to fall back into the past and to become drunk on the remembrance of the epoch which led up to independence. The leader, seen objectively, brings the people to a halt and persists in either expelling them from history or preventing them from taking root in it. During the struggle for liberation the leader awakened the people and promised them a forward march, heroic and unmitigated. Today, he uses every means to put them to sleep, and three or four times a year asks them to remember the colonial period and to look back on the long way they have come since then.”
I am not opposed to the centenary celebration of the ANC. But if the ANC was a progressive movement they would have organised a celebration in a way that includes the people and supports us to build our power. They could have, for instance, asked people to meet all over the country, discuss how far we have come and far we still have to go, and draw up demands for a new freedom charter for the new era. But this celebration is just a spectacle that we are supposed to watch on TV. It is exactly what Fanon talks about. It is designed to keep us drunk on the memory of the past struggle, so that we must stop struggling and remain in the caves.
In a recent protest in Bloemfontein, police were there in numbers to flush the demonstrators. This has happened in many other demonstrations. The message is very clear: “Go back to your caves!” It is backed up state violence. As Fanon says a party that can’t marry national consciousness with social consciousness will disintegrated; nothing will be left but the shell of a party, the name, the emblem and the motto. He says that:
“The living party, which ought to make possible the free exchange of ideas which have been elaborated according to the real needs of the mass of the people, has been transformed into a trade union of individual interests.”
This is exactly what the party has become. Institution such as parliament and local municipalities have been severely compromised because of individual interests. Corruption is rampant. The Protection of Information Bill (Secrecy Bill), is another illustration of how the selfish interests of individuals ave taken over the party.
A true liberation movement would never have killed Andries Tatane, attacked and jailed activists of social movements. It would never send people to lull – it would encourage people to continue organising and mobilising against injustices and oppression. A progressive leader would know that he or she cannot substitute themselves for the will of the people. A progressive party would never help the government in holding the people down through fascist attacks on the media by the likes of Nceba Faku, Blade Nzimande and Julius Malema to mention but a few. A democratic party would never engage in attacks on protests as we saw most recently with the ANC and ANCYL fascism against the Democratic Left Front in Durban during COP17 Conference.
In the Congo, in Nigeria and across the Arab world people are deserting celebrations of the flag and political leaders as if they really do represent the nation. Some are turning to a politics of religious or ethnic chauvinism. Others are turning to the politics of mass democratic rebellion or a democracy that is truly owned by the people. This is a free exchange of ideas backed up with popular force. We are also seeing this in Europe and North America. Latin America has been in rebellion for many years. Across South Africa more and more people are deserting the party that spends so much money to keep them drunk on the memory of the past struggle, their own struggle, the same struggle that the ruling party has privatised and betrayed. There are occupations, road blockades and protests and the message is loud and clear: Sekwanele! Genoeg! Enough!
The only way to truly honour the struggles of the past is to stand up for what is right now. The struggle continues and will continue until we are all free.
The global financial crisis that started with the bursting of the housing bubble in the U.S. in 2007 imposed both direct and indirect costs on the working and middle class populations. The direct costs are those associated with the bail-out of financial institutions, which will ultimately be borne by the taxpayers; the indirect costs are those associated with the ensuing economic crisis and the deep and prolonged recession that came in its wake, which, again, will be mostly borne by the working class population. While both costs lead to increasing deficits, and over time accumulating debt, of the federal government, they are of vastly unequal magnitudes. The direct cost (i.e., the costs associated with bailing out the financial institutions immediately after the crisis) is much smaller than the indirect cost (i.e., the cost, in terms of rising unemployment and government deficit if one considers the latter a cost, arising due to the recession); the contribution of the bail-out funds to the build-up of sovereign debt, in the US (and Europe), is minuscule compared to the contribution of the indirect cost (the widening gap between tax receipts and government outlays caused by the recession).
Many people on the left, by emphasizing the cost of bailing out financial institutions (and its contribution to sovereign debt build-up), target the wrong, and smaller, costs. There are two senses in which targeting the bail out funds is incorrect. First, the magnitude of those costs are small compared to the indirect costs. Second, if the direct costs had not been incurred, i.e., if the system continued to be organized around capitalist lines and the financial system had not been bailed out, the ensuing recession would have been deeper and hence the indirect costs, ultimately borne by the working and middle class people, even higher.
It is important to be clear that the workings of the financial sector under capitalism imposes enormous costs on the working and middle class people not only because it needs to be bailed out when the system hits the fan, as happened in 2008. The financial sector imposes much larger costs by the sheer magnitude of the externality of its actions on the working class, by the structural refusal to internalize the costs of its speculative activities, by increasing the financial fragility of the system when the bubble is inflating and ushering in the deep and prolonged recession that inevitably arrives when the bubble bursts. The direct cost of bailing out the financial system when the crisis breaks out is small compared to the indirect cost that comes from the externality of its casino-like activities. In fact, if the financial system had not been bailed out, the indirect costs would have been even higher because the recession would have almost certainly turned into a depression (of the magnitude that the world witnessed during the 1930s).
FIGURE 1: Time series plot of changes in the index of house prices in major US cities
Let us study the US economy and try to understand the difference between the direct and indirect costs of the financial crisis of 2008-09. Recall that the the housing bubble in the US started deflating from around late 2006 (Figure 1). The securitization process that had built itself on the shaky foundations of the housing bubble started unraveling within a year, and the financial crisis broke out in real earnest in 2008. The financial system went into panic, credit markets froze (as banks stopped lending to each other and to nonfinancial firms) and this sent shock-waves through the US government and the Federal Reserve circles. Monetary policy had already kicked in at least an year ago, with the Fed slashing short term interest rates and making liquidity available to the financial system (see Figure 2). But this was clearly not enough.
To unfreeze credit markets and deal with the growing panic, the US Treasury department adopted the Troubled Assets Relief Program (TARP) in early October 2008. The conceptualization of the TARP went through two rounds. In the first round, the US Treasury argued that the TARP should buy out the toxic assets (i.e., assets that drew its value from the housing market like mortgage backed securities, the collateraized debt obligations, etc., and were now more or less worthless) from financial institutions to restore confidence in the financial markets and prevent widespread bankruptcies. Very soon it became clear that this strategy would not work because it was impossible to ascertain the “true” value of the toxic assets. In other words, it was not clear at what price the assets should be bought for by the US Treasury. Hence, this strategy was abandoned and in the second round of iteration, TARP was conceptualized as a recapitalization program. This entailed lending money (or other liquid assets like Treasury bills) to financial institutions but in return taking ownership shares of those institutions.
The bail out of the financial institutions that we now talk about is precisely TARP as a method to recapitalize financial institutions, in particular banks, credit market institutions, the automobile industry and the insurance giant AIG, by injecting fresh capital into their balance sheets in lieu of ownership shares. How much money was involved? Initially, TARP was thought to involve $700 billion. But, the Dodd-Frank Wall Street Reform and Consumer Protection Act reduced the maximum authorization for the TARP from $700 billion to $475 billion. The TARP ended on October 3, 2010 and had by then disbursed only a total of $411 billion. Of this, 77%, i.e., $318 billion, has already been recovered through repayments, dividends, interest and other income earnings of the US Treasury.
In fact, the part of TARP funds that was lent to banks has already been recovered with a profit: a total of $245 billion was invested in banks, and it has been recovered with a profit of about $20 billion. It is estimated that the overall cost of TARP, after all recoveries are taken into account, will amount to $70 billion, only about a tenth of the original amount of $700 billion. Hence, it is clear that the overall contribution of the TARP (the bailing-out of the financial system) to the deficit (and outstanding debt) of the US government is not large. The direct cost of the financial crisis, in terms of the funds required to bail out the financial system during the peak of the crisis, is not very large when compared to the indirect cost, to which we now turn.
The indirect cost arose because of the magnification of the effects of a downturn into a deep and prolonged recession, the magnification being caused by the fragility of the financial system. Unemployment rates went through the roof and continues to be at historically high levels despite the official end of the recession in the second quarter of 2009; the labour force participation rates have fallen due to discouraged unemployed workers dropping out of the labour force; the median duration of unemployment has increased to extremely high levels; the share of long term unemployed workers has grown to postwar highs (see Figure 3 and 4 for some details).
While it might be difficult to accurately quantify these losses, it seems clear that they are far higher than the $70 loss that the taxpayer will be saddled with due to the bail out of the financial sector. For instance, some studies suggest that about 7 million workers have been displaced from long-term employment during the Great Recession, only a subset of all workers who have been adversely hit by job losses. These 7 million workers will experience an income loss of about $774 billion over the next 25 years.
In a similar vein, the contribution of the direct investment from TARP to the growth of the fiscal deficit is small compared to the contribution due to the recession. Figure 5 plots the net outlays (i.e., net of interest payments of its debt) of the federal government, the receipts of the federal government and the difference between the two for the period 2006-2011. It can be seen from Figure 5 that the major jump in the deficit occurred between 2007 and 2009, a period during which it increased by about $1252 billion. This increase was the result of an increase in net outlays (i.e., expenditure) by about $788 billion and a fall in receipts of around $463 billion. Even assuming that the total $411 billion disbursed by the US Treasury for the TARP had occurred during that period (which it clearly did not), it is only about a third of the increase of the federal deficit during that period. Thus, close to (or more than) two-thirds of the increase in the federal government deficit was the result of non-bail out costs.
Looking at the plots of the outlays and receipts of the US federal government in Figure 5, we clearly see that the two series have diverged significantly since the start of the Great Recession. Even though net outlays (i.e., expenditures) have flattened out since 2010, receipts (i.e., tax revenues) have not picked up in any major way. Thus, the gap between the two continues to be big, in excess of $1000 billion every year. This huge gap is what lies behind the deficit and mounting debt of the US government, not the $70 billion that will be the net cost of the TARP. It is more or less certain that a similar account would be accurate for Europe also, i.e., the largest portion of the debt of Eurozone governments would be the result of indirect costs and not the direct cost of bailing out the financial sector during the crisis of 2008.
Conclusion
To conclude, let me summarize the argument. It is important to distinguish between the direct costs (i.e., bail out of the financial sector through the TARP) and indirect costs (rise in unemployment and the growth of the government debt due to the deep and prolonged recession) of the financial crisis and focus on the second rather than the first. This is because the second is much larger in magnitude than the first. In fact, it is not even clear that the first can be considered a cost because without bailing out the financial sector via recapitalization (or temporary and partial nationalization), the recession would certainly have been deeper, increasing the burden on the working people. In addition, concentrating on the second cost allows us to focus on the systemic aspect of the costs that the financial sector, in its speculative avatar, imposes on the working and middle class population of a country. This forces us to conceptualize an alternative that is likewise systemic in nature and goes beyond arguing against bail out of financial sector firms.
Deepankar Basu is an Assistant Professor in the Department of Economics, University of Massachusetts.
The recent financial crisis and Great Recession have been analysed endlessly in the mainstream and academia, but this is the first book to conclude, on the basis of in-depth analyses of official US data, that Marx’s crisis theory can explain these events.
Marx believed that the rate of profit has a tendency to fall, leading to economic crises and recessions. Many economists, Marxists among them, have dismissed this theory out of hand, but Andrew Kliman’s careful data analysis shows that the rate of profit did indeed decline after the post-World War II boom and that free-market policies failed to reverse the decline. The fall in profitability led to sluggish investment and economic growth, mounting debt problems, desperate attempts of governments to fight these problems by piling up even more debt – and ultimately to the Great Recession.
Kliman’s conclusion is simple but shocking: short of socialist transformation, the only way to escape the ‘new normal’ of a stagnant, crisis-prone economy is to restore profitability through full-scale destruction of existing wealth, something not seen since the Depression of the 1930s.
About The Author
Andrew Kliman is Professor of Economics at Pace University, New York. He is the author of Reclaiming Marx’s ‘Capital’: A Refutation of the Myth of Inconsistency and many writings on crisis theory, value theory and other topics.
Industrialisation is understood narrowly in the sense of manufacturing and broadly in the sense of the application of modern science and technology to the transformation of raw materials from nature. It is necessary for national development, as the economist Gavin Kitching and others argued decades ago. Industrialisation adds value to unprocessed goods extracted from nature and thus increases society’s income. Often owners of land – peasants – do not earn more – or do not earn much more — than those who work in industry as wage labourers. Industrialisation makes possible the production of a vast range of goods, which are directly used by people: clothes, materials required to build houses, traditional and western medicines, consumer durables, cultural items such as books and music instruments; the different types food that go through the manufacturing process, and so on. And, industry indeed produces the means of production necessary in both farming and industry itself. Industrialisation holds out the possibility of ending want and material suffering. It provides employment to the increasing population, including through forward and backward linkages. It makes it possible to reap scale economies and specialisation in ways not possible in agriculture. In part because of the above, industrialisation increases labour productivity, one of the fundamental indicators of progress, prosperity, and economic development in the society at large. Industrialisation breaks the mutual isolation of producers: this happens as they now work in great numbers in large cities and towns. Their geographical concentration will potentially allow them to fight for justice and equality in society, both on their behalf and on behalf of other oppressed groups. Industrialisation, connected as it is to science, promotes a culture of rational thinking and can potentially undermine the basis for superstitious and obscurantist ideas and practices. Given these and many other advantages of industrialisation, the Left – at least the Marxist left — cannot be opposed to industrialisation (although sections of the postmodern/populist Left are, as industrialisation is seen by them as a sign/carrier of modernity that supposedly destroys an authentic pre-modern culture). The question is: what form of industrialisation should the Left endorse in theory and practice? What happens when, for example, a proposed SEZ (special economic zone) displaces thousands of peasants? Should industrialisation be endorsed under this situation?
To answer this question, one may start with agriculture. Land is the most important means of production in agriculture, at least at the current stage when farming is relatively less capital-intensive. Fertility of land is a product of natural forces as well as human investments. It is normally the case that human investments in land to raise land fertility happen closer to existing centres of population and commerce than away from these. Fertile tracts of land therefore are generally located closer to existing centres of population and commerce. Now, owners of industry need also land. But their need for land is different. They need to locate their factories on: land is not used as an input in the way it is used in farming. And in a market economy, they need land in a specific location: industry tends to be located closer to existing centres of population and commerce for the reason that greater profits are made possible by greater geographical accessibility. Therefore, the fight over industrialisation often becomes a fight between owners of industry and owners of land (including peasants). This fight is over not just an absolute piece of land but over its location.
To be able to understand the on-going struggles over industrialisation, we have to carefully distinguish between industrialisation per se which is necessary in all modern societies from its various historically specific forms, and we need to also distinguish between various forms of struggle over industrialisation.
There is a strong logic to locating industry on the land which is not currently cultivated or irregularly cultivated, in relatively less accessible locations and away from the locations of fertile land on which peasants are currently dependent on or which may soon be used. Why? Firstly, as mentioned above, industry does not need fertile land as an input. Location of a factory on or close to a fertile land destroys natural fertility of soil which is almost impossible to manufacture in industry. It is indeed a great social cost to use a fertile land for industrialisation which does not need it. Secondly, forcing the industry to locate in these areas (e.g. relatively less accessible areas, away from fertile land) will result in the development of new means of transportation and communication (which will also create jobs). Industrialisation in these less accessible locations will also give an impetus to agriculture. It is unfortunate that when industries could be located in more remote locations on land that is relatively less fertile, they are being located on currently cultivated fertile land. This must be fought against. This is one form of struggle over industrialisation.
If, however, a fertile land currently being cultivated must absolutely be used for an SEZ — and whether this must be the case should be democratically decided and not decided by business — several conditions must be laid out. The value of the land as a compensation to the family must be determined in relation to what the value of the land would be after the industries have come up. Under no circumstances must the living standards of the families losing the land and the families losing access to employment on that land (farm labourers, tenants) be allowed to be worse than what they were before the change in the use of the land. Indeed, because industrialisation will make possible greater production of wealth and because this is possible only by displacing the people who currently occupy the land and depend on its use, it must be an absolute precondition of displacement that their material and cultural needs (adequate food, clothes, shelter, education, health care, etc.) are satisfied (including by giving employment to at least a single person from every affected family with a living wage in the industry) and that environmental sustainability of the place and nearby-places is maintained. Investment must be made in the lives of the people who are affected before the investment is made in the SEZ itself. This will not happen automatically. This requires democratically mobilised struggle. This is the second form of struggle over industrialisation.
Peasants as peasants have been involved in heroic battles over dispossession from their land – in Bengal, in northern Orissa, in Maharashtra, and so many other places. This is not the decisive battle against the industrialist class (domestic or foreign), however. The decisive battle against it cannot be, and will not be, fought by peasants as property owners against dispossession, although local and temporary success is possible. The battle against unjust dispossession can only be successfully fought by urban workers in an alliance with peasants and rural workers. Note also that the issue of peasants being separated from land is not a single separable visible act of a group of industrialists, backed by the state. Given, for example, the high costs of farm inputs which come from the industry and given the decreasing prices of farm products from which industry benefits, millions are going into debt, and to clear their debt, peasants are selling their land. Many are leasing their land to better-off farmers, including those who enter into contract with industrialists, domestic and foreign, to produce farm products for industrial processing. There is therefore a potential site of struggle against this insidious form of dispossession from land. The industrialists who set up an SEZ by displacing peasants from land and the industrialists who benefit from high prices of goods sold to peasants which contribute to their economic unviability and separation from land are both members of the same family. The fight against high prices of industrial goods used by peasants is therefore an important part of the fight for a particular form of industrialisation, one that would seek to remove the differences between peasants and industry and the relations of oppression between them.
There is still another form of struggle over industrialisation. Peasants turned into the proletariat in the SEZs, in newly industrialising areas – whether located on fertile land, displacing peasants or in remote locations — will and must fight against the monied class, initially for better wages and working conditions. One may respond by saying that the SEZ framework of industrialisation does not allow for the working class organisation. But then who said that the SEZ must be a necessary form of industrialisation? Or if it does, who said that an SEZ – understood as an industrial cluster — must be one where workers are to be alienated from their democratic right to organise? If business has the right to make money, then surely, and in the interest of democracy, workers have the right to organise to demand a decent life? This is the fourth form of struggle over industrialisation, the struggle that connects workers of different industrial clusters and cities politically and that demands that industrialisation must be of a particular form such that those who do the work must be fully able to meet their social and cultural needs. An SEZ, an industrial project is not based on a one-time act of separating people from their land and livelihood. Much rather, the particular form of industrialisation that is in question is based on a continuous separation: separation of people from the product of their labour, from their blood and sweat. It represents endless money-making at one pole and limitless misery at another. This form of industrialisation does not just produce things that are of potential use. It reproduces an invisible relation of separation of masses from their lives, a relation between them and those who control their lives at work (and outside). So because separation of people from their land creates a ground for the second form of separation, the struggle against the former must be connected to the struggle over the latter, and can only be fully successful if it is connected that way.
Protecting the peasants does not necessarily mean protecting the peasant property. If industrialisation can better the conditions of peasants (i.e. outside of farming), perhaps ‘sacrificing’ their property to make room for industrialisation can be favourably considered. Everyone must be provided with an opportunity to live a life with dignity. Whether it is in industry or farming should, ordinarily, be beside the matter. But there is an ‘if’, as in ‘If industrialisation can better conditions of life of peasants…’. Industrialisation, whether led by state-capital or private capital has not done much for millions of peasants. And it won’t unless it is a site of contestation.
The current struggles around SEZs and displacement appear to be a little narrow. They are often too defensive. The message of these struggles seems to be: ‘don’t take away our land, leave us alone (to our misery)’. The struggle against displacement should be a part of larger family of struggles, i.e. struggles over industrialisation as such. This is because the objects of struggle are objectively inter-connected. The fight against SEZs must be a fight against a particular existing form of industrialisation which leads to double dispossession: political acts of dispossession or primitive accumulation and dispossession through market mechanisms (rising prices of industrial goods leading to debt). A part of the fight should also be within SEZs (and other industrialised areas). Seen in another way, the fight against SEZs and displacement is a fight for a certain form of industrialisation, which, in turn, is a fight for (deepening) democracy and for the satisfaction of social, cultural and ecological needs of those who are displaced to make room for industries, those who lose land because of rising prices of industrial goods, and those who work inside the industrial areas.
Raju J Das is an Associate Professor at York University, Toronto, Canada. Email: rajudas@yorku.ca
Can the Maruti management’s stubbornness be explained only by its unwillingness to allow workers to have their union? This seems doubtful. Unions in India in themselves do not pose such a grave threat for managements. There must be something more to it.
Rather, it reflects a bourgeois resoluteness to bring the long pending demand for institutionalisation of the changes in the labour regime to the centre-stage of policymaking. Changes in the labour regime – casualisation and contractualisation that neoliberalism intensified have not yet been codified completely, which frequently puts managements in legal predicaments, allowing unions to pose ‘legitimate’ demands. A recent Supreme Court judgement which ordered regularisation of contract labourers employed in airports demonstrates the lag between the industrial reality and the legal framework.
In the past decade, the agenda of labour reforms could not be pushed ahead partly because of political compulsions (UPA I was supported by the left parties) and partly due to economic conundrum (the global crisis) in which the UPA regimes found themselves in.
The Maruti management’s determination is not coming from its own competitive need; rather it is representing the general will of the bourgeoisie in India. Not anyone could have acted in this manner. The central role of the automobile sector in the present phase of capitalist development and Maruti’s overwhelming leadership in this particular sector puts it at the helm of the bourgeois class.
At least, it is hard to deny that this sector has been in the forefront of demanding labour reforms. The recent statements from the Automobile Component Manufacturers Association of India (ACMAI) and the Society of Indian Automobiles Manufacturers (SIAM) testify this. These associations have been emphasising that labour reforms are crucial for the growth in the automotive industry.
“The rigidity in labour laws has led companies to increasingly resort to outsourcing and contracting of labour. To be very precise, the need of the hour is flexible labour reforms,” General Motors India vice president P Balendran had said.
SIAM Director General Vishnu Mathur said the law should give “flexibility” on taking disciplinary actions even against a single person.
We write this at a time when our movement is under attack from all quarters, and three of our leaders, namely, Sonu Kumar (the President of MSEU), Shiv Kumar (the General Secretary of MSEU) and Ravinder, have been arrested by the police in a completely unjustified and unlawful manner.
All concerned probably know the way in which processes unfolded over the past few weeks. Our leaders went to the negotiation table with the management of Maruti Suzuki and the Labour Department on the 16th of September. Talks were still going on today, when they broke down because the management stubbornly refused to take back those workers that had been thrown out.
We believe that the management, prepared for this eventuality, had already made suitable arrangements with the police and the administration. That the government and its police have been bought over by the company management is absolutely clear. When talks broke down at about 10:15 pm today, the police spared no time in arresting our leaders. The attempt, clearly, is to cripple our movement when we have refused to back down in the face of all threats and enticements.
It is known to us that Ravinder already has an FIR filed against his name; but Sonu Kumar and Shiv Kumar have never been charged before. However, looking at the foul play that the police are already indulging in, we are sure that our leaders will be charged of crimes they never committed.
This way or that, we will continue our struggle. We appeal to all to condemn such acts by this unholy alliance of the police, the government and the company management. We ask you to stand in our support, in the support of our movement, of our arrested leaders and against injustice.
Rishipal
Executive Member
Maruti Suzuki Employees Union (MSEU)
For the first time in Greece a documentary produced by the audience. “Debtocracy” seeks the causes of the debt crisis and proposes solutions, hidden by the government and the dominant media. The documentary will be distributed free by the end of March without usage rights and broadcasted and subtitled in at least three languages.
The 2008 “financial crisis” in the United States was a systemic fraud in which the wealthy finance capitalists stole trillions of public dollars. No one was jailed for this crime, the largest theft of public money in history.
Instead, the rich forced working people across the globe to pay for their “crisis” through punitive “austerity” programs that gutted public services and repealed workers’ rights.
Austerity was named “Word of the Year” for 2010.
This documentary explains the nature of capitalist crisis, visits the protests against austerity measures, and recommends revolutionary paths for the future.
Special attention is devoted to the crisis in Greece, the 2010 G20 Summit protest in Toronto, Canada, and the remarkable surge of solidarity in Madison, Wisconsin.
We are writing to express to you our solidarity at a time when the pain for those who have died or have disappeared is still raw, and the task of reshaping of life out of the immense wreckage caused by the earthquake, the tsunami and the nuclear reactor meltdowns must appear unimaginable. We also write to think together with you what this moment marked by the most horrific nuclear disaster yet in history signifies for our future, for the politics of anti-capitalist social movements, as well as the fundamentals of everyday reproduction.
Concerning our future and the politics of anti-capitalist movements, one thing is sure. The present situation in Japan is potentially more damaging to people’s confidence in capitalism than any disaster in the “under-developed” world and certainly far more damaging than the previous exemplar of nuclear catastrophe, Chernobyl. For none of the exonerating excuses or explanations commonly flagged in front of man-made disasters can apply in this case. Famines in Africa can be blamed, however wrongly, on the lack of capital and technological “know how,” i.e., they can be blamed on the lack of development, while the Chernobyl accident can be attributed to the technocratic megalomania bred in centrally-planned socialist societies. But neither underdevelopment nor socialism can be used to explain a disaster in 21st century Japan that has the world’s third largest capitalist economy and the most technologically sophisticated infrastructure on the planet. The consequences of the earthquake, the tsunami and, most fatefully, the damaged nuclear reactors can hardly be blamed on the lack of capitalist development. On the contrary, they are the clearest evidence that high tech capitalism does not protect us against catastrophes, and it only intensifies their threat to human life while blocking any escape route. This is why the events in Japan are potentially so threatening and so de-legitimizing for the international capitalist power-structure. For the chain of meltdowns feared or actually occurring stands as a concrete embodiment of what capitalism has in store for us —an embodiment of the dangers to which we are being exposed with total disregard of our well-being, and what we can expect in our future, as from China to the US and beyond, country after country is planning to multiply its nuclear plants.
This is also why so much is done, at least in the US, to minimize the severity of the situation evolving in and around the Fukushima Daiichi plants and to place the dramatic developments daily unfolding in and out of the plants out of sight.
Company men and politicians are aware that the disaster at Fukushima is tremendous blow to the legitimacy of nuclear power and in a way the legitimacy of capitalist production. A tremendous ideological campaign is under way to make sure that it does not become the occasion for a global revolt against nuclear power and more important for a process of revolutionary change. The fact that the nuclear disaster in Japan is taking place in concomitance with the spreading of insurrectional movements throughout the oil regions of North Africa and the Middle East undoubtedly adds to the determination to establish against all evidence that everything is under control. But we know that nothing is further from the truth, and that what we are witnessing is the deepening crisis, indeed the proof of the “unsustainability” of the energy sector — since the ‘70s the leading capitalist sector— in its two main articulations: nuclear and oil.
We think it helps, then, in considering this crisis, to think the Fukushima disaster together with different scenarios that, in their representation on the US evening news seem to have nothing in common with it and with each other.
*Libya: where NATO and the UN are collaborating with Ghedaffi in the destruction of a rebellious youth whose demands for better living conditions and more freedom may jeopardize the regular flow of oil.
*Ivory Coast: where French, UN and Africom (the US military command devoted to Africa) troops have joined ranks to install a World Bank official, handpicked by the EU, to clearly gain control of West Africa’s most important country after Nigeria and create a solid Africom-powered bridge connecting the Nigerian, to the Algerian and Chadian oilfields.
*Baharain: where Saudi Arabian troops are brought in to slaughter pro-democracy demonstrators.
Viewed, in this context, the threat the disaster at Fukushima poses to international capital is not that thousands of people may develop cancer, leukemia, loose their homes, loose their sources of livelihood, see their lands and waters contaminated for thousands of years. The danger is that ‘caving in’ in front of popular mobilizations, governments will institute new regulations, scrap plans for more nuclear plants construction and, in the aftermath, nuclear stocks will fall and one of the main sources of capital accumulation will be severely compromised for decades to come. These concerns explain not only the chorus of shameless declarations we heard in recent weeks (bouncing from Paris and Rome to Washington) to the effect that the path to nuclear power is one with no return, but also the lack of any international logistic support for the populations living in the proximity of the melting reactors. Where are the planes carrying food, medicines, blankets? Where are the doctors, the nurses, and engineers? Where is the United Nations that is so readily fighting in Ivory Coast? We do not need to ask. Clearly, as far as the EU/US are concerned, the guideline is that everything must be done to prevent this nuclear disaster from sinking into the consciousness of people and trigger a worldwide revulsion against nuclear power and against those who knowingly have exposed so many to its dangers.
There is also something else however in the response of the world politicians to this juncture. What we are witnessing, most dramatically, in the response to the tsunami and nuclear disaster in Japan, especially in the US, is the beginning of an era in which capitalism is dropping any humanitarian pretense and refusing any commitment to the protection of human life. Not only, just one month after its inception, the catastrophe that is still unfolding in Japan is already being pushed to a corner of the evening news in the same way as nothing is any longer said about the oil spill in the Gulf of Mexico. We are also repeatedly informed that catastrophes are inevitable, that no energy path is safe, that disasters are something to be learnt from, not a cause for retreat, and, to top it off, that not all is negative, after all, Tokyo’s troubles are Osaka’s gain!
This is the same doctrine that today we are dished out in debates on the financial crisis. Financial experts now all agree that it is impossible to prevent major economic crises, because, however clever government regulations may be, bankers can elude them. As Paul Romer, a finance professor in Stamford University, put in a New York Times interview (3/11/2011): “Every decade or so, any finite system of financial regulation will lead to systemic financial crisis.” That is, those of us who are on pensions or have a few savings or have taken out a mortgage must prepare for periodic losses and there is nothing that can be done about it!
What we see, then, today in Japan, is the moment of truth of a world capitalist system that, after five centuries of exploitation of millions across the planet, and after endless litanies on the fact that science opens a path of constant perfectibility of the human race, has decided that it is not their business to offer solutions to any major human problem, obviously convinced that we have become so identified with capital, and have so lost the will and capacity to construct an alternative to it, that we will not be able to prise its future apart from ours even after it has demonstrated to be totally destructive of our lives. We are reminded here of the response that Mr. Chipman, an official of the Federal Emergency Management Agency (FEMA), gave when asked, thirty years ago, if “American institutions” would survive an all-out nuclear war with the Soviet Union. “I think -–he replied– they would, eventually, yeah. As I say, the ants eventually build another anthill.”
We think is our task to prove Mr. Chipman wrong –to prove that we will not be like the mindless laborious ants who mechanically reconstruct their hill not matter how many times it is destroyed.
We believe it will be a major political disaster if in the months to come we will see business as usual prevail, and the surge of a broad global movement protesting what has been done to the people of Japan and to us all as the current will bring to our shore the radioactivity leaking from the unraveling plants.
We are concerned however that a mobilization in response to the disaster in Japan should not be limited to demanding that no more nuclear plants be constructed and those in existence be dismantled, nor that more investment be directed to the development of ‘clean energy’ technology. Undoubtedly, the Fukushima meltdowns must be the spark for a worldwide anti-nuclear movement. But we think, judging also from our experience in the aftermath of the disaster at Three Mile Island, that this movement will not have any hope of success if the struggle to eliminate nuclear plants or against the existence of nuclear armaments, is approached in the narrow manner characteristic of the anti-nuclear movement of the 1980s, if approached, that is, as a special issue, according to the argument that if we do not eliminate first nuclear power we will not be around to deal with other issues. This, we believe, is a short-sighted argument, as death, genocide and the ecological destruction of the environment come in many forms. Indeed, rather than as exceptions we should see the proposed proliferation of nuclear plants and the callous indifference demonstrated by world politicians to the possible destruction of million of lives under a nuclear regime as symptomatic of a whole relation to capital and the state that is the real threat to people across the planet.
What we need is to approach the question of nuclear power as the prism through which to read our present relation to capital and bring our different struggles and forms of resistance together. Short of that, our political activities will remain powerless, separated and fragmented like the reports about Libya, Ivory Coast and Japan on the networks’ evening news.
A first step in this direction is to establish that Nuclear Power has nothing to do with energy needs, in the same way as nuclear arms proliferation had nothing to do with the alleged threat posed by communism. Nuclear power is not just an energy form, it a specific form of capital accumulation and social control enabling capital to centralize the extraction of surplus labor, police the movements of millions of people, and achieve regional or global hegemony through the threat of annihilation. One of its main objectives is pre/empting resistance, generating the kind of docility and passivity that we have witnessed in response to such capital-made disasters as Katrina, Haiti and today Japan, and that in the past enabled the French and US governments to explode hundreds of atomic bombs in open air and underground tests in the Pacific and use entire population from the Marshall Islands to Tahiti, as guinea pigs.
Nuclear power, therefore, can only be destroyed when social movements come into existence that treat it politically, not only as a destructive form of energy but as a strategy of accumulation and terror– a means of devaluation of our lives– and place it on a continuum with the struggle against the use of the “financial crisis,“ or against the cuts to healthcare and education. To this program, those of us who live in the US must add the demand for reparations for the descendants of the people who have been the victims of US nuclear bombs and nuclear tests. For our struggle must revive the memory of the crimes that have been committed in the past through the use of nuclear power beginning with Hiroshima and Nagasaki.
Between 1948 and 1973, real GDP for the U.S. (measured in 2005 chained dollars) economy grew at a compound annual average rate of about 3:98 percent per annum; between 1973 and 2010, the corresponding growth rate was only 2:72 per cent per annum. While the 25 year period of high growth after the Second World War has, with some justification, earned the epithet of the “Golden Age” of capitalism, the period of relative stagnation since the mid-1970s has been characterized by heterodox economists as a neoliberal capitalist regime (Dum´enil and L´evy, 2004, 2011; Harvey, 2005; Kotz, 2009).
Three characteristics of neoliberal capitalism have attracted lot of scholarly attention. First is the marked trend towards growing financialization of the economy, by which is meant a growing weight of financial activities in the aggregate economy. Figure 1 presents some well-known evidence, for the period 1961-2010, in support of this claim. The top left panel plots the share of value added that is contributed by the FIRE (finance, insurance and real estate) sector in the value added by the total private sector of the U.S. economy: between 1961 and 2008, the contribution of the FIRE sector increased steadily from about 16 per cent to roughly 25 percent. The top right panel gives the share of financial sector profit in total domestic profit income in the U.S. economy, which shows a steady increase since the early 1970s (interrupted briefly in the early 1980s). It is only during the financial crisis in 2007-2008 that this share declined for a brief period; it is noteworthy that the share started a rapid ascent in 2009, and has recovered much of its loss since then. The two figures in the bottom panel provide evidence, for the period 1988-2009, of the growing size of the stock market: both stock market capitalization and total value traded, as a proportion of nominal GDP, has trended up since the late 1980s, providing clear evidence of the growth of financial relative to real activity.
The second notable characteristic of the neoliberal regime has been the veritable explosion of the flow of credit (and the build-up of the stock of debt) in the economy. One important dimension of the growth of credit has been the unprecedented increase in the credit flowing to (working class) households. Figure 2 presents evidence in support of both these claims by plotting the time series of outstanding debt (measured as total credit market liabilities) of three crucial sector of the U.S. economy: the nonfinancial business sector, the household sector, and financial business sector. While the business sectors display an increasing trend since the early 1960s (along with large fluctuations at business cycle frequencies), the household sector debt starts a secular rise since the early 1980s (with almost no business cycle fluctuations), and the financial business sector also displays a secular rise till the onset of the Great Recession. The last chart in Figure 2 plots the time series of the ratio of outstanding household debt and outstanding debt of the nonfinancial business sector. The ratio shows a clear upward trend since the mid-1970s, with household debt increasing from about 85 percent of nonfinancial business debt in the mid-1970s to about 140 percent just prior to the start of the Great Recession.
The third important characteristic of neoliberal capitalism has been stagnation of real wages for the bulk of the working class. In the face of rising productivity, this has entailed a massive redistribution of income away from working class households, leading to widening income and wealth inequality. Figure 3 presents evidence in support of this claim. The top panel plots an index of productivity (measured real output per hour) in the total nonfarm business sector of the U.S. economy. There is an increasing trend in productivity over time, with a marked acceleration in growth since the mid-1990s. This is in sharp contrast to the evolution of real wages of production and nonsupervisory workers plotted in the bottom panel, who comprise about 80 percent of the U.S. workforce. The hourly real wage has barely increased between the early 1970s and the late 2000s; the weekly real wage has in fact declined during this period.
The main question that this paper wishes to explore is the possible connections between the slowdown in economic growth on the one hand and the three characteristics of neoliberal capitalism on the other? Heterodox economists have been interested in this question for at least the last three decades, and the main contribution of this paper is to extend that literature by presenting a theoretical model to address this question. Building on and extending Foley (1982, 1986a), this paper develops a discrete-time Marxian circuit of capital model to analyze the link between financialization, nonproduction credit and economic growth. It is demonstrated that increasing financialization and the growth of household credit (a component of nonproduction credit) can reduce the growth rate of a capitalist economy. Hence, this paper offers a novel explanation, rooted in a Marxian circuit of capital macroeconomic analysis, for the slowdown of the U.S. economy during the neoliberal era.
Having cleared the destructive Chiria mines and the POSCO project in violation of the law, the Environment Ministry has proceeded to grossly violate people’s rights in protected areas – to the detriment of both people and wildlife. On February 8th, it issued new guidelines for the declaration of “critical wildlife habitats” under the Forest Rights Act. These guidelines are in direct violation of the Forest Rights Act and will encourage the kind of brutal forced relocation that harms people, increases conflict with wildlife and leads to more destruction in protected areas. Everyone from the Tiger Task Force through numerous conservationists themselves have pointed out the dangers in the current relocation process.
Once again, we see that the primary interest of this system is not in wildlife, forests, people or even “development”: it is retaining its own power.
The guidelines are in violation of law on the following counts (for a quick summary see table below):
Identification of CWHs: As is admitted by most wildlife organisations and by the government itself, existing national parks and sanctuaries have often been demarcated arbitrarily without consulting either the people of the area or scientists; as a result many are of limited wildlife significance. Therefore the FRA requires that a consultative and scientific process, “case by case, on the basis of scientific and objective criteria” (s. 2(b)) for identification of critical wildlife habitats should be undertaken in all existing protected areas. In order to ensure that this process is actually sound (and not arbitrary again), it should be done by an Expert Committee including experts from the locality and a Tribal Ministry representative. The new guidelines do not satisfy any of these requirements.
Scientific basis:The new guidelines say nothing about which “scientific and objective criteria” are to be used. They also ignore the requirement that critical wildlife habitats should only be established where it can be scientifically proven that the presence of forest dwellers is causing irreversible damage to wildlife and that co-existence is not possible. The only reference to any of this is a vague statement that studies on human impact should be carried out – but this is in Annexure 2, a list of points to be taken into account for financial planning, long after identification is over. Finally, the process of identification is to be carried out by the DFO and a “local scientific institution” in the space of a mere 60 days. The result can only be imagined – exactly as occurred in the case of critical tiger habitats, all existing protected areas will simply be sought to be converted into critical wildlife habitats, followed by pressurising people living inside them to relocate. The guidelines also sneak in the intent of extending CWHs to areas “in and around” protected areas (point 5.6.2) thereby leaving room to extend PA boundaries to larger areas. This is a total perversion of the intent of the law.
Consultation: On consultation, the guidelines are a farce. The identification of the habitat, as said above, will first be carried out by the DFO; whereupon the guidelines say there should be “extensive consultation” with forest dwellers by an Expert Committee. What will happen to the results of this “extensive consultation” and the comments of the people? Nothing. They are never referred to in the guidelines again. Thus this consultation process is actually non-existent.
No Expert Committee:Indeed, the role of the Expert Committee – which is to identify the critical wildlife habitat – has been reduced to “motivating” villagers for relocation, after the two technical members have on their own decided the area to be demarcated as a CWH. In sum, the guidelines reduce the process of identification to an administrative exercise controlled by the Forest Department.
Relocation: In addition to the scientific evidence of irreversible damage from people, the law requires that relocation from a critical wildlife habitat requires the free informed consent of the gram sabha (s. 4(2)(e)), must provide a secure livelihood (s. 4(2)(d)), and can only take place after rights are recognised (s.4(2)(a)), and facilities are complete (s. 4(2)(f)). Every one of these conditions is violated:
Consent of gram sabha: There is no reference in the guidelines to taking the consent of the gram sabha for relocation at any point, except when the section itself is quoted. Instead there is talk of relocating even if “a small number of families agree”, which by implication means that the majority do not do so – and hence the gram sabha could not have consented. This will open the way for individually pressurising families and pushing relocation step by step, once again in violation of the law.
Secure livelihood: The guidelines again say nothing about providing any livelihood at all, leave alone a secure one acceptable to the people. Instead, they say that two “options” will be offered (based on the Project Tiger package) – Rs. 10 lakhs per family or a vague reference to “rehabilitation by the Forest Department.” In fact, the law does nota allow such provision of mere cash compensation, as this is at the root of all the rehabilitation failures of the past. It is also a total violation of people’s rights, since they lose their livelihoods and access to the forest and only get a sum of cash – which itself often doesn’t reach them.
Completion of recognition of rights: Once again there is no reference to this except in Annexure 2, where it is irrelevant. Since rights are hardly being recognised in protected areas and the guideline imposes an absurd 60 day time limit, relocation will now proceed without bothering with people’s rights – making harassment and pressure on forest dwellers more likely.
Completion of facilities: This was intended to protect against hasty relocation without any facilities being provided. In the last year alone, two people have died (in Similipal in Orissa and Achanakmar in Chhattisgarh) after being forcibly relocated from tiger reserves and not provided any proper shelter.There is not a word about this requirement anywhere in the guideline.
Despite some weaknesses and internal inconsistencies, the October 2007 guidelines that this order replaces had covered all these issues. This new set of guidelines completely throws to wind the law and violates all the Act’s provisions on procedures of determining and notification of critical wildlife habitats. Indeed, relocating anyone on the basis of these guidelines would be in direct violation of the law; and hence a criminal offence under section 7 of the Act. Following this policy will only ensure the continuance of the earlier form of forced arbitrary relocation, harming both people and wildlife.
Summary of Violations of Law
Provision
Requirement of Law
What Guidelines Actually Do
s. 2(b)
Decide wildlife habitats on basis of scientific and objective criteria
No criteria specified; left to administrative fiat
s. 2(b)
On a case by case basis
Left to concerned DFO “in consultation” with “local scientific institution”
s. 2(b)
Decide through a process of consultation by an Expert Committee
Identification entirely by DFO and “local scientific institution”, without any consultation; role of Expert Committee is restricted to “sensitising” people to the relocation package after the proposal is sent to MoEF
s. 2(b)
Recognition of rights and other pre-conditions to be met prior to any relocation (s.4(1) and 4(2))
Ignores and therefore violates both
s. 4(2)(a)
Rights have to be recognised first
Completely ignored except irrelevant reference in Annexure 2
s. 4(2)(b),(c)
No relocation unless can be shown that human presence causing irreversible damage and co-existence not possible
Completely ignored
s. 4(2)(d)
Relocation must provide a secure livelihood
Rs. 10 lakh compensation or vague “rehabilitation” mentioned; no reference to providing a livelihood
s. 4(2)(e)
Free informed consent of the gram sabha to be taken in writing
Ignored; no procedure stated, implicitly refers to consent of individual families
s. 4(2)(f)
No relocation until facilities at new site (by implication including livelihood) are complete
Completely ignored
In sum, every provision of the law has been violated.
Jairam Ramesh and the UPA government have shown their true colours with their decision today on the POSCO project. Ignoring the reports of its own advisory bodies and enquiry committees, violating its own orders and the laws of the land, this Ministry has shown that the naked face of corporate greed – not the “rule of law”, the “aam aadmi”, “inclusive growth” or any of these other lies – is what rules this country. The decision today can be summarised in one sentence: “Repeat your lies, give us promises that we all know are false, and then loot at will.”
We repeat: we will not give up our lands, our forests and our homes to this company. It is not the meaningless orders of a mercenary government that will decide this project’s fate, but the tears and blood of our people. Through the road of peaceful demonstrations and people’s resistance we have fought this project, in the face of torture, jail, firings and killings. If this project comes it will come over our dead bodies.
We note the following about today’s decision:
The Orissa government has been asked to give an “assurance” that the people of the area are not forest dwellers under the Forest Rights Act, after which the “final forest clearance” will be granted. The Orissa government has already lied on this count on numerous occasions. Indeed, the majority report of the POSCO Enquiry Committee said “The Committee finds that the government’s own records such as census reports and voters list confirm that there are both other traditional forest dwellers (OTFD) and forest dwelling Scheduled Tribes in the project area and the statement of the District Collector of Jagatsinghpur to the contrary is false” (para II.1, Conclusions and Recommendations). Even the dissenting member agreed that the Act had not been implemented. The same finding had been reached by the subcommittee of the Saxena Committee earlier. After the Ministry’s own enquiry committees have found the Orissa government guilty of lying, what is the meaning of saying the project can proceed if the liars repeat their lies?
This Ministry has earlier made a song and dance of respect for people’s views and environmental laws. Under the Forest Rights Act, the consent of the gram sabhas of the area is an essential requirement, and this was confirmed by the Ministry’s own order. Three different committees – the Saxena Committee, the POSCO Enquiry Committee and the Ministry’s own Forest Advisory Committee – all therefore said the clearance should be withdrawn. The Minister today claims that the project can go ahead if he and the Orissa government decide they want it to. So much for the law and for people’s rights.
On the environment clearance, we recall again the words of the majority Enquiry Committee, which said “Potentially very serious impacts …have not even been assessed, leave alone planned for…. The cavalier and reckless attitude of the concerned authorities to such potentially disastrous impacts is horrendous and shocks the collective conscience of the Committee….There appears to be a pre dominant belief that conditionalities in the EIA/ CRZ clearances are a substitute for comprehensive evaluation and assessment of the environmental impact by the authorities. Imposing vague conditionalities seems to be a way out for the various agencies from taking hard decisions on crucial issues.” Again, it is not us who said this – it is the Ministry’s own Committee! And yet this is exactly what the Minister has chosen to do.
Independent reports and studies by reputed academics have confirmed what we have always said – this project will be of no benefit to anyone except POSCO’s profit margins. But yet we find this being called a project of “strategic importance.” To whom?
Today the veil stands ripped open; the government stands exposed before the nation, a mercenary willing to put its regulations, officials and security forces at the disposal of the highest bidder. Let the UPA and the Central government answer: where is the rule of law today, in the name of which you crush struggles across the country? Where is your much vaunted love for the people and for the environment? What do you stand for if not for corporate greed?
At the end of 2010, tens of thousands of university students have demonstrated in central London and all over university campuses in the UK, against the coalition government’s proposals to raise tuition fees up to 9,000 pounds. Government and Media coverage of the protests has focussed primarily on two factors – the violence of a minority of protestors and the apparent ‘privileged’ profile of a few student protestors. ‘Rich rioting students’ was just one of the headlines describing the demonstrations. A panellist on BBC’s Question Time described protestors as ‘just a bunch of middle class students’. Michael Gove, the Education Minister, defending the planned increase in tuition fees posed the question: ‘Is it fair to ask a miner to subsidise the education of someone who can go and become a millionaire?’ The irony of this analogy can surely not be lost on those who remember how brutally Gove’s Conservative Party, in its previous incarnation, destroyed the heart of British working class mining communities.
One of the most passionate, but misguided, commentaries on the recent student protests comes from Julie Burchill (the Independent, 16 December), who made a plea to the public to ‘spare us these pampered protesters who riot in defence of their privilege’. Focusing on one student, Charlie Gilmour, who has been singled out by almost all the British media because of his connection to a famous rock star, Burchill vents her anger at so called ‘middle class’ protestors at the same time as dismissing university education as a wasteful time of ‘boozing and bullshitting funded by the taxes of people who had the actual gumption to remove themselves from the playpen of education and get a job as soon as legally possible’. She goes on to suggest that for many working class youth, university education has made little difference to their prospects of getting a job.
Burchill is right to question the success of government-sponsored schemes such as widening participation which critics argue has done little to equalise educational outcomes. All the research suggests that while working class students are more likely to attend university than they did 10 years ago the class gap has not necessarily diminished. Working class students are more likely to attend newer universities, to be part-time students and to study for more vocational subjects. But to dismiss university education for the masses as completely irrelevant is surely wrong. Burchill is also wrong to dismiss the current protests as entirely middle class-led. The fact that some students from middle and upper class families join the student protest does not make the whole student protest an action of the privileged few in defence of their privileges. University students, whatever social class their parents are from, historically tend to act together as ‘students’, and for most part for progressive causes as in the case of the 1968 student protests. At first in 1968 too, the governments and media also sought to portray the student protests as work of radical students and small groups of middle class troublemakers.
The protests over the last few weeks have seen large numbers of working class students (some of them school students) protesting because it is they who have the most to lose from the proposed public spending cuts. Further, to get so hung up on the notion of a so-called middle class-led protest serves to support Gove’s and the coalition government’s attempts to create an ideological standpoint, presumably on the side of the ordinary working people, from which position to launch a wholesale attack on all the social and economic achievements of the previous generations, like the universal child benefit, housing benefit, disability benefits and similar other measures.
The current representation of the protestors as middle class serves a deeply ideological and manipulative function of deflecting attention away from the stark realities of the public cuts and their real causes. Many people who oppose the cuts simultaneously accept the argument that there is no alternative but to sacrifice education and other public services in order to save the economy. Further, a large section of the British public and media appear to have accepted the line presented by the government that the total package of cuts worth £128 billion by 2015-16 was ‘unavoidable’ because of previous administration’s careless spending, and almost self-made huge deficits. Until the financial crash of 2008, however, the Labour governments had succeeded in keeping national debt below the 40 percent of GDP target that they set themselves. In 2006/07, public sector net debt was 36.0 percent of the GDP. In 2008, it rose rapidly primarily because of ‘financial interventions’ to bailout of Northern Rock, RBS and other banks, because of lower tax receipts, and because of higher spending on unemployment benefits, all caused by the global recession. The current deficit was caused primarily by the recession not by previous administration’s pre-crash careless spending. It currently stands as 63.7 percent of National GDP, and was projected to peak at 74.9 percent in 2014-15.
Massive cuts to the NHS, local government, and education budgets are not the inevitable solution to national debt. During the Second World War, the UK national debt reached much higher figures of up to 150 percent of the GDP. It is not uncommon for countries to borrow more during the time of serious national and international crises, like wars, or economic upheavals like the one currently affecting the world, and to pay back the debt over a period of time once the economy starts to grow again. In this sense, budget deficits can be an effective way to deal with shocks such as wars, financial crashes and deep recessions. If anything, the problem of low economic activity is the real, and more urgent, issue than the fiscal stability.
David Cameron’s ‘Big Society’ programme offers an ideological justification for the massive public spending cuts which are about much more than just deficit reduction. The pretence of ‘there is no alternative’ offers a means for the Conservative project to radically transform the state and to transfer more services and money from the public to the private sector. If the real intention was to take the British economy out of the crisis, then such massive cuts would not be the answer. There are alternatives: we need to find a fair and sustainable path out of crisis. Budget deficits will more or less automatically heal with the economic recovery. Trying to cut the deficit quickly, in the midst of a serious recession, will damage the economy and extend the crisis. The government instead should concentrate on growth and allow growth to reduce the deficit. Cuts will not reduce the deficit, investment will. Recently, the Confederation of British Industry (CBI) announced that it expects economic growth in 2011 to be much slower than previously predicted. A much weaker consumer spending, resulting from massive unemployment and lower wages in 2011, is described as the main reason for this. Cutting too far and too fast will mean more people out of work, fewer jobs in the economy, lower level of taxation from workers and businesses, and more people on unemployment benefit, which will cost the government more. The real challenge is to introduce constructive ways to restructure the national economy so that it can deliver strong and consistent growth.
The current crisis and the way some other parts of the world economy have been dealing with it successfully, and all social and cultural legacies of this turbulent process have highlighted, like never before, the crucial role of education. The financial and economic crisis has had a particularly strong impact on young people with low levels of education. Investments in education pay large and rising dividends for individuals, but also for economies. On average, a young person with a university degree will generate £77,000 more in income taxes and social contributions over his/her working life than someone with a high-school degree only. Even after taking the cost of university education into account, the net public return from an investment in tertiary education is £56 000 for a male, in generated income taxes and social contributions over his working life. Enhancing tertiary education attainment can therefore help governments increase their fiscal revenues, making it easier to boost their social spending, in areas like, for example education. As the global demand for jobs shifts up the skills ladder, it has become crucial for countries to develop policies that encourage the acquisition and efficient use of these skills to retain both high value jobs and highly skilled labour. Burchill is right to suggest that ‘clever working class youth of this country [have] been socially and spiritually ‘kettled’ – hemmed in, suffocated and stifled’ historically by ‘the privilege and entitlement’ of the likes of elite. But does the answer really lie in cutting away higher education for working class students altogether?
Britain’s total investment in higher education, even before the current cuts of the Coalition government, was 1.3 percent of the GDP which is behind the OECD average of 1.5 percent. Despite the student numbers rising by approximately 25 percent in the last 15 years, the UK has slipped from third to fifteenth position in numbers graduating among industrial countries because investment in higher education has risen much rapidly elsewhere. Within Europe, the UK is already falling behind France, Denmark, Finland, Sweden, Portugal and Netherlands, among others. Other Western governments, most notably the United States and Germany, have viewed the global financial and economic crisis as a sign not to retrench but to invest in their higher education systems as a necessary part of investing in the skills that will be needed for recovery in near future. In the UK, however, it was education that was first in line for cuts in spending: the cutting of the Future Jobs Fund, the cancellation of school building and refurbishment, the abolition of the Education Maintenance Allowance, and now funding cuts in university teaching budgets, fewer university places and a massive increase in university tuition fees. All these draconian measures will ensure that talented people from working class backgrounds will not achieve their full potential. The poorer you are the more scared you are by the prospect of tens of thousands of pounds of debt. It seems this is exactly what the Coalition government wants- to keep education for the rich and privileged. And this is what tens of thousands of students are protesting against. If we want British economy to recover and take its place in a much more competitive world, if we want Britain to be ‘open for business’, we should make higher education available for everyone, regardless of their social class. The more skilled people we have, the more likely companies will be willing to invest in the UK.
Bulent Gokay is a Professor of International Relations, Keele University and Farzana Shain is a Senior Lecturer, Keele University
Much press attention in the last week has been devoted to the Environment Minister’s statements on “democratic forest management” and how the existing forest management system needs to change. Such statements are welcome, for they mark an official admission that India’s forest bureaucracy has impoverished millions and increasingly been an opponent of both forest conservation and forest dwellers.
But what the Ministry says does not at all match what the Ministry does. Not only is the Ministry not moving in the direction of democratic management; it is moving against democratic management, while using the rhetoric of “community control” to hide the actuality of intensified state control.
At a time when state control over forests and forest lands is a major weapon in the assault on people’s resources and livelihoods, this is not an arcane policy issue alone; it is one component in the ongoing intense struggle over deciding how we will use our natural resources and how we will define our society.
A simple comparison throws up what is actually going on (click on links to know more about each issue):
* As per public minutes of Forest Advisory Committee, there is not a single project in which the Ministry has complied with FRA or its own order. In Polavaram, the FRA has been brazenly and publicly violated. In only one project has compliance even been considered – POSCO – but even after non-compliance has been exposed by three different committees, and five years of protest by the people, the forest clearance is still standing. * Meanwhile, there are ongoing attempts to get the order withdrawn.
Throughout this year, including this week, statements by Minister that Joint Forest Management has become a Forest Department proxy and needs “reform.”
* The reality is that there is only one nation-wide law that provides for democratic community control over forests – the Forest Rights Act(PESA provides even more extensive powers in Scheduled Areas). This supersedes all existing schemes. Therefore, if the Ministry is genuinely interested, the first steps for democratic control would be to shut down JFM, put the funds into the NREGA or other systems which permit local institutions to decide their priorities, and direct forest authorities to comply with local powers as provided in the FRA. MoEF would then have to join other Ministries in a coordinated effort towards democratic resource management, which is not MoEF’s domain alone. * What is happening is exactly the opposite. There is repeated talk of “revamping” Joint Forest Management (which has no legal validity), and this translates into giving JFM committees powers that actually belong to democratic institutions. * Even the basic fact that forest guards sit as the secretaries of JFM Committees, and their funds are controlled through the Forest Department, is completely ignored. In short, the Ministry is strengthening its proxies, not democratising them.
Forestry Projects
The Ministry repeatedly claims that the huge amount of money being poured into forestry projects will benefit forest dwellers and be spent in a “decentralised” fashion under “people’s control.”
The money put into forestry includes money from the Compensatory Afforestation Management and Planning Authority (CAMPA) (1,000 crores per year), the proposed Green India Mission (46,000 crores in total), Japanese-funded “external” forestry projects, the National Afforestation Programme and the developing international REDD agreement. In every single one of these programs, funds are being channeled or are proposed to be channeled through JFM and the Forest Department, directly undermining democratic control and driving land grabbing. This is true in the case of CAMPA – despite a direct indictment by a Parliamentary Standing Committee. For details of other programmes see our statements on the proposed Green India Mission and the MoEF approach to REDD. If the Ministry is interested in democracy, why is it channeling funds to the very institutions that undercut democratic control – and this after it has itself said that they do so?
The “forked tongue” approach that has come to characterise the forest bureaucracy and this Ministry is extremely dangerous. It blocks actual change by claiming to be engaging in it; and then it does precisely the opposite, cleverly garbed in the right terms and the right language. In the process, “participation” becomes a code word for devolving huge amounts of money to select individuals and sections of villages in order to create what are essentially state proxies and vested interests. Nor is this confined to the Environment Ministry; we now have a “Integrated Action Plan” for “developing” Maoist areas by putting thousands of crores into the hands of the very officials who have destroyed people’s lives and livelihoods, organised inhuman repression and violated all norms of democracy. In the long run, this approach is a formula for dividing communities, breaking resistance, undermining democracy and destroying resources. It may make sense for the interests of corporations and state machinery; but to the rest of us it is a formula for resource grabbing and destruction.
Implicit almost all discussion of public expenditure and revenue, most virulently in the debate over deficit reduction, is the fallacy of public affordability. This fallacy is manifested, for example, in the argument in the United Kingdom that if university education is available to a large portion of the population, the public sector cannot afford to deliver it without substantial fees, even less to provide support grants to all students.
Because “the public sector cannot afford” to provide university education, it is necessary to ration the public contribution on the basis of need (income or means testing). The same argument is applied in very major area of social expenditure: with an ageing population, “the public sector cannot afford” to pay more than a safety net pension; cannot afford to provide all the drugs and care needed by that ageing population, and so on.
“Affordability” arguments are fallacious. The fallacy is obvious once one considers it from the level of society as a whole. Consider the example of funding of university education. Only a tiny minority of people would argue that primary education should be a matter for individual families to decide and wholly fund themselves. This near-consensus results from the conviction that children have a right to be educated, and that a democratic society requires an educated and informed public. These convictions, not finances, determine the provision of primary education by the public sector: for everyone, regardless of income or status, and if some wish to contract for private education, they may do so. The social consensus on public provision of secondary education is equally broad (for everyone), but number of years provided varies (lower in Britain than most developed countries). Only a few on the far right wing would argue that the pubic sector “cannot afford” to provide primary and secondary education for all, though in practice many right of centre attempt to minimize the expenditure and therefore the quality of provision.
The same principle applies to university education: what is the appropriate coverage and to what level? Here there is no consensus, and those who believe that people have no right to higher education avoid taking that potentially damning position by seeking cover under the affordability argument: “I wish we could provide everyone with a university education, but we cannot afford it. In any case, people gain personally from higher education, so they should pay for it themselves to the extent that they can. The public sector can only afford to help the poor, and if you are poor and clever you will find funding.”
This line of argument is the most superficial mendacity, and would apply equally to primary and secondary education (see my previous comment). The true essence of the affordability of higher education argument is, “People have no right to higher education. If they want it, let them pay for it. If you are poor and clever you might go to university. If you are dumb and rich you certainly will.”
When there is a social consensus that people have a right to a university education if they want one, then reducing public expenditure and raising fees does not save society money. There are two affects: 1) for those with high incomes it shifts expenditure from the public sector to households, and 2) for those on low incomes it reduces provision. It “saves public money” in the same sense that not filling potholes is a financial gain.
Most pernicious is the application of the affordability fallacy to pensions and health. Two core values of democratic societies are that children have a right to education and the old have a right to live their final years in decent conditions with dignity. Given this consensus on the elderly, discussing financial affordability is grotesque. The question is, in light of a country’s economic development and productive resources, what level of decency can and should society provide to everyone past a certain age? Once the level is decided, it merely remains to decide the institutional mechanism by which it will be funded. Considerable empirical evidence indicates that provision of pensions through the public sector has the lowest resource cost. This is primarily because unlike private insurers, the public sector need charge no risk premium. Its revenue is guaranteed, and the growth of that revenue is determined by the growth of the economy as a whole.
Even more obvious is the fallacy of the affordability argument for health care. It is an appalling manifestation of the power of capital in US society that there seems to be no consensus that everyone has a right to be healthy, a principle Franklin Roosevelt included in his “Economic Bill of Rights” speech in January 1944, that every American had “the right to adequate medical care and the opportunity to achieve and enjoy good health”. In almost every other developed country this principle is accepted. When it is accepted, as with education and pensions, the issue is not financial affordability, nor is it coverage (everyone qualifies). The only issue is the level of society’s obligation to itself on health care.
The affordability argument perpetuates a profoundly anti-social and anti-democratic fallacy. Whoever makes it asserts (as Margaret Thatcher did) that there is no society and no obligation to fellow human beings beyond an absolute minimum that the residual of social decency forces upon even the most reactionary Thatcherite or Reaganite. Reducing that residual of social decency is the project of the affordability fallacy. Existence is viewed as a collection of isolated individuals, for whom one has no concern, even if, or especially if, for those whose lives are rendered nasty, brutish and short.
During the recent visit of India’s Finance Minister to Bangladesh, India signed an agreement offering $1-billion credit facility to Bangladesh at a particular interest rate, which many in Bangladesh have found “disgraceful” and “too high”. This line of credit for Bangladesh was the one-time single-largest credit package offered by New Delhi to any other country. And it has been frequently noted that through such lines of credit, India, like other more advanced countries, has been facilitating the overseas expansion of its domestic capital. What is your assessment of the present Indo-Bangladeshi relationship? Don’t you find streaks of sub-imperialism (both in economic and political terms) emerging in this relationship as in the case of India’s relationship with Nepal and Sri Lanka?
Anu Muhammad: The question of India is very important for us. Without locating India and the role of Indian corporate big capital we cannot get rid of overall hegemony of global capitalism. India has the highest number of rich people but contradictorily India also has the highest number of poor people. The current Indian state is not representing Indian people but is representing Indian big capital. India for South Asia is the same as what the US is for the world. It is hegemonic, oppressive and undemocratic. The present India should be characterised with the rise of big capital, unprecedented accumulation of wealth and power in few hands, and its linkages with global monopoly capital. This India can be termed as sub-imperialist within the global capitalist system, and within South Asia it is imperialist. This India has recently increased its military expenditure to a record high level, also building military alliances with the US. They are both now trying to take control of the Bay of Bengal. With the increasing interests of India, China and the US in Bay of Bengal, the possibility for creation of new alliances or conflicts is rather high. Either way, Bangladesh is going to suffer.
Now global corporate bodies including the ADB, the WB or MNCs consider India a regional centre. Therefore, their projects are selected in line with the interest and long-term programme of Indian big capital. For example, the coal that the British company, Asia Energy, wanted to extract, when it attempted to start open-pit mining in Phulbari, was supposed to be exported to India. When the US oil multinational UNOCAL was trying to export gas, the destination was once again India. Now a number of projects have been conceived to build new coal-based power plants in Khulna and Chittagong. It is apparently a joint project, but the result will be different for the two countries. Bangladesh will have carbon emissions and dispossession of farmers that will create social tension and human tragedy, but Indian companies will earn huge profits.
Indian big business has access to huge potential market in Bangladesh, especially after the SAP. India’s presence is very high in every sector in Bangladesh. It is trying to monopolise each of those sectors, started utilising aid or credit, very well-known instruments of imperialist control and influence. Recently, India granted 1 billion USD loan to Bangladesh for building its own transit facilities. This transit is going to change everything in South Asia. Bangladesh is entering into the ambit of India’s military, political and economic domination on a scale not seen before.
I don’t know, how far the military aspect of the domination will go, but economically India is going to have a commanding authority over Bangladesh. India is claiming that Bangladesh is the land of terrorists and they erected fences around border, then how can they feel comfortable in taking their goods through Bangladesh? Yes, it will be used as an excuse. So, they will demand more regional security coordination under India’s control. The security system of Bangladesh will be subordinated to India status and interests.
Indian sub-imperialism behaves similarly with Nepal, Sri Lanka and other smaller countries in the region. In this context, people’s movements of India, Nepal, Bhutan, Sri Lanka, Pakistan, Bangladesh and other neighbouring countries should have a very high level of cooperation and coordination to strengthen united struggles for building a free, democratic and different South Asia not polluted by Indian or big capital’s hegemony.
How do you assess the role and performance of micro-credit? How much has it contributed to the capitalist penetration of rural Bangladesh and its integration in the global network of finance capital?
Anu Muhammad: Micro-credit in different forms has been in practice for long in this region. Dr. Muhammad Yunus (Grameen Bank) and Fazle Hasan Abed (BRAC) could institutionalise it and could attract global attention through its monetary success. Initially, their micro-credit programmes began with the promise of poverty alleviation, gradually its success showed its strength in other areas. Currently, BRAC, Grameen Bank and ASA control more than 80 per cent of the micro-credit market. From micro-credit business these organisations have accumulated a lot of capital and shown that micro-credit can become a corporate success. They have also linked multinational capital with the micro-credit network.
For instance, Grameenphone started its operation by relying on micro-credit, offered borrowers mobile phone as a commodity form of micro-credit, on condition of paying back in installments. Its initial declared aim was to ‘help poor’, ‘alleviate poverty’, now Grameenphone has become the largest company in Bangladesh with 90 per cent of its subscribers being non-poor urban people. Grameenphone is actually an entity of Telenor, Norway. They started with the poor and relied on micro-credit and then at one point migrated to more profitable areas. Grameen Bank has opened many other businesses, has developed joint venture companies with French companies such as Denon and Veolia (a water company), all in the name of poor. Intel and many other companies are coming to Grameen Bank to make use of its wide network through micro-credit.
The same thing is true also for BRAC. BRAC was initially interested more in education, health and other essential public services. With its increasing accumulation of capital through micro-credit, it shifted to the business of textile, printing, education (including setting up of a university). It is also in business with multinational seed company Monsanto. In fact, its focus on education and health care for the poor shifted more towards commercial activity. Thus the micro-credit operation, in its process, has successfully been used as a weapon to make macro business to grow in tandem with global capital.
But question remains, what about the much publicised objective, i.e., poverty alleviation through micro-credit? If we look at the hard facts, compiled from different studies (not sponsored by BRAC or Grameen Bank), we find a new debt trap for the poor people has been created by micro-credit. You cannot find more than 5-10 per cent people who could change their economic conditions through micro-credit. The people who could change their economic conditions were those who had other sources of income. If we closely look into the system of micro-credit it appears clearly as a means to create a debt trap. If you take loan, you have to repay in weekly instalments and it means you have to be active, healthy and working all over the year, which is not possible. In fact, it is impossible for the poor millions, who constantly live in adverse conditions, to keep paying weekly instalments all over the year. If there are any unfavourable circumstances you are bound to be a defaulter. And once you become a defaulter it creates a chain and you have to take loan from another lender/NGO to repay the same. Micro-credit has connected the rural areas and the population with the market but has made done that by pushing them into a chronic debt trap.
Today Dr. Yunus is not talking any more about sending poverty to museum. He has come up with a ‘new’ idea of social business, which is also unclear and seems to be fraudulent. The impact of micro-credit is now well understood by people around, especially millions of victims. However, the IFIs and global corporations seem to be very happy with these experiments, as they find that the poor people can become very useful objects for profitable investment of finance capital. Thus the WB, HSBC, Citibank, and other multinational banks are entering into the micro-credit market. Bangladesh has given a gift to crisis-ridden global capitalism, which has consequently found the market of four billion poor through micro-credit. It is very relevant here to quote the Wall Street Journal, an important part of the global corporate media. It said: “Around the world, four billion people live in poverty. And western companies are struggling to turn them into customers.” (26 October, 2009). Obviously, micro-credit is a very useful instrument to go with this objective.
